Content2011 - PETRONAS Gas Berhad

Notes to the Financial Statements
31 MarCh 2011
1. Basis of Preparation (Continued)
1.4 Use of estimates and judgements (Continued)
145 annUaL report 2011
In particular, information about signifi cant areas of estimation uncertainty and critical judgements in applying accounting policies
that have the most signifi cant effect on the amount recognised in the fi nancial statements are described in the following notes:
i) Note 3 : Property, Plant and Equipment;
ii) Note 16 : Deferred Tax; and
iii) Note 32 : Financial Instruments.
2. Signifi cant Accounting Policies
The accounting policies set out below have been applied consistently to all periods presented in these fi nancial statements, and have been
applied consistently by Group entities, unless otherwise stated.
2.1 Basis of consolidation
A subsidiary is an entity controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern
the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities.
The fi nancial statements of the subsidiary are included in the consolidated fi nancial statements from the date that control commences
until the date that control ceases.
All inter-company transactions are eliminated on consolidation and revenue and profi ts relate to external transactions only. Unrealised
losses resulting from inter-company transactions are also eliminated unless cost cannot be recovered.
Acquisitions of subsidiaries are accounted for using the purchase method. The purchase method of accounting involves allocating
the cost of the acquisition to the fair value of the assets acquired and liabilities and contingent liabilities assumed at the date of
acquisition.
The cost of an acquisition is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities
incurred or assumed, and equity instruments issued, plus any costs directly attributable to the acquisition.
Any excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifi able assets, liabilities and
contingent liabilities represents goodwill.
Any excess of the Group’s interest in the net fair value of the identifi able assets, liabilities and contingent liabilities over the cost of
acquisition is recognised immediately in profi t or loss.
Minority interests at the reporting date, being the portion of the net assets of the subsidiary attributable to equity interests that is not
owned by the Company, whether directly or indirectly through the subsidiary, is presented in the consolidated statement of fi nancial
position and statement of changes in equity within equity, separately from equity attributable to the equity shareholders of the
Company. Minority interests in the results of the Group are presented on the face of the consolidated statement of comprehensive
income as an allocation of the total profi t or loss for the year between minority interests and the equity shareholders of the
Company.