Notes to the Financial Statements
(Cont’d)
For the year ended 30 April 2015
(In Singapore Dollars)
ANNUAL REPORT 2015
48
BUILDING ON OUR EXTENSIVE NETWORK
2.
Summary of significant accounting policies (cont’d)
2.10
Joint ventures and associate (cont’d)
Under the equity method, the investment in associate or joint ventures are carried in the balance sheet
at cost plus post-acquisition changes in the Group’s share of net assets of the associate or joint ventures.
The profit or loss reflects the share of results of the operations of the associate or joint ventures. Distributions
received from joint ventures or associate reduce the carrying amount of the investment. Where there
has been a change recognised in other comprehensive income by the associate or joint venture, the
Group recognises its share of such changes in other comprehensive income. Unrealised gains and losses
resulting from transactions between the Group and associate or joint venture are eliminated to the extent
of the interest in the associate or joint venture.
When the Group’s share of losses in an associate or joint venture equals or exceeds its interest in the
associate or joint venture, the Group does not recognise further losses, unless it has incurred obligations or
made payments on behalf of the associate or joint venture.
After application of the equity method, the Group determines whether it is necessary to recognise an
additional impairment loss on the Group’s investment in associate or joint venture. The Group determines
at the end of each reporting period whether there is any objective evidence that the investment in the
associate or joint venture is impaired. If this is the case, the Group calculates the amount of impairment
as the difference between the recoverable amount of the associate or joint venture and its carrying value
and recognises the amount in profit or loss.
The most recent available audited financial statements of the associated company or joint ventures are
used by the Group in applying the equity method. Where the dates of the audited financial statements
used are not co-terminous with those of the Group, the share of results is arrived at from the last audited
financial statements available and unaudited management financial statements to the end of the
accounting period. Consistent accounting policies are applied for like transactions and events in similar
circumstances.
Upon loss of significant influence over the associate or joint venture, the Group measures and recognises
the retained investment at its fair value. Any difference between the carrying amount of the associate
or joint venture upon loss of significant influence and the fair value of the aggregate of the retained
investment and proceeds from disposal is recognised in profit or loss.
If the Group’s ownership interest in an associate or joint venture is reduced, but the Group continues to
apply the equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had
previously been recognised in other comprehensive income relating to that reduction in ownership interest
if that gain or loss would be required to be reclassified to profit or loss on the disposal of the related assets
or liabilities.
In the Company’s separate financial statements, investments in associated company or joint ventures are
accounted for at cost less impairment losses. Details of the associated company and joint ventures are set
out in Note 40.
