APM AUTOMOTIVE HOLDINGS BERHAD
52
NOTES TO THE
FINANCIAL STATEMENTS
2.
Significant accounting policies (continued)
(a) Basis of consolidation (continued)
(iv) Loss of control (continued)
If the Group retains any interest in the former subsidiary, then such interest is measured at fair value
at the date that control is lost. Subsequently, it is accounted for as an equity accounted investee or
as an available-for-sale financial asset depending on the level of influence retained.
(v) Associates
Associates are entities, including unincorporated entities, in which the Group has significant influence,
but not control, over the financial and operating policies.
Investments in associates are accounted for in the consolidated financial statements using the equity
method less any impairment losses, unless the investment is classified as held for sale or distribution.
The cost of the investment includes transaction costs. The consolidated financial statements
include the Group’s share of the profit or loss and other comprehensive income of the associates,
after adjustments if any, to align the accounting policies with those of the Group, from the date that
significant influence commences until the date that significant influence ceases.
When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that
interest including any long-term investments is reduced to zero, and the recognition of further losses
is discontinued except to the extent that the Group has an obligation or has made payments on
behalf of the associate.
When the Group ceases to have significant influence over an associate, any retained interest in
the former associate at the date when significant influence is lost is measured at fair value and this
amount is regarded as the initial carrying amount of a financial asset. The difference between the fair
value of any retained interest plus proceeds from the interest disposed of and the carrying amount of
the investment at the date when equity method is discontinued is recognised in the profit or loss.
When the Group’s interest in an associate decreases but does not result in a loss of significant
influence, any retained interest is not re-measured. Any gain or loss arising from the decrease
in interest is recognised in profit or loss. Any gains or losses previously recognised in other
comprehensive income are also reclassified proportionately to profit or loss if that gain or loss would
be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.
Investments in associates are measured in the Company’s statement of financial position at cost less
any impairment losses unless the investment is classified as held for sale or distribution. The cost of
the investment includes transaction costs.
(vi) Joint arrangements
Joint arrangements are arrangements of which the Group has joint control, established by
contracts requiring unanimous consent for decisions about the activities that significantly affect the
arrangements’ returns.
Joint arrangements are classified and accounted for as follows:
l
A joint arrangement is classified as “joint operation” when the Group or the Company has rights
to the assets and obligations for the liabilities relating to an arrangement. The Group accounts
for each of its share of the assets, liabilities and transactions, including its share of those held or
incurred jointly with the other investors, in relation to the joint operation.
l
A joint arrangement is classified as “joint venture” when the Group or the Company has rights
only to the net assets of the arrangements. The Group accounts for its interest in the joint
venture using the equity method. Investments in joint venture are measured in the Company’s
statement of financial position at cost less any impairment losses, unless the investment is
classified as held for sale or distribution. The cost of investment includes transaction costs.
