LensCrafters 2010 Annual Report Download - page 126

ANNUAL REPORT 2010> 124 |
Inter–company transactions, balances and unrealized gains and losses on transactions between Group companies are
eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
The individual financial statements used in the preparation of the consolidated financial statements are prepared and
approved by the administrative bodies of the individual companies.
Transactions with non–controlling interest
Transactions with non–controlling interests are treated as transactions with equity owners of the Group. For purchases
from non–controlling interests, the difference between any consideration paid and the relevant share acquired of the
carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non–controlling interests
are also recorded in equity.
When the Group ceases to have control or significant influence, any retained interest in the entity is remeasured to its fair
value, with the change in carrying amount recognized in profit or loss.
Associates
Associates are any entities over which the Group has significant influence but not control, generally with ownership of
between 20 percent and 50 percent of the voting rights. Investments in associates are accounted for using the equity
method of accounting and are initially recognized at cost.
The Group’s share of its associates’ post–acquisition profits or losses is recognized in the consolidated statement of income,
and its share of post–acquisition movements in other comprehensive income is recognized in other comprehensive income.
The cumulative post–acquisition movements are adjusted against the carrying amount of the investment. When the Group’s
share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the
Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the associate.
Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest
in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the
asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the
policies adopted by the Group.
Dilution gains and losses arising in investments in associates are recognized in the consolidated statement of income.
Other companies
Investments in entities in which the Group does not have either control or significant influence, generally with ownership
of less than 20 percent, are originally recorded at cost and subsequently measured at fair value.
Translation of the financial statements of foreign companies
The Group records transactions denominated in foreign currency in accordance with IAS 21 – The effect of changes in
Foreign Exchange Rates.
The results and financial position of all the Group entities (none of which have the currency of a hyper–inflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency as
follows:
assets and liabilities for each consolidated statement of financial position presented are translated at the closing rate (a)
at the date of that consolidated statement of financial position;