41
SUNMOON FOOD COMPANY LIMITED
ANNUAL REPORT 2015
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
2.2
Basis of consolidation
(Continued)
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as
equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are
adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount
by which the non-controlling interests are adjusted and the fair value of the consideration paid or received
is recognised directly in equity and attributed to owners of the Company.
When the Group loses control of a subsidiary it derecognises the assets and liabilities of the subsidiary
and any non-controlling interest. The profit or loss on disposal is calculated as the difference between (i)
the aggregate of the fair value of the consideration received and the fair value of any retained interest and
(ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any
non-controlling interests.
Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted
for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would
be required if the relevant assets or liabilities were disposed of. The fair value of any investments retained
in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition
for subsequent accounting under FRS 39
Financial Instruments: Recognition and Measurement
or, when
applicable, the cost on initial recognition of an investment in an associate or joint venture.
In the separate financial statements of the Company, investments in subsidiaries and associates are carried
at cost, less any impairment loss that has been recognised in profit or loss.
2.3
Business combinations
Business combinations from 1 January 2010
The acquisition of subsidiaries is accounted for using the acquisition method. The consideration transferred
for the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given,
liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the
acquiree. Acquisition-related costs are recognised in profit or loss as incurred. Consideration also includes
the fair value of any contingent consideration. Contingent consideration classified as a financial liability is
re-measured subsequently to fair value through profit or loss.
Where a business combination is achieved in stages, the Group’s previously held interests in the acquired
entity are re-measured to fair value at the acquisition date (i.e. the date the Group attains control) and the
resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree
prior to the acquisition date that have previously been recognised in other comprehensive income are
reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.
