LensCrafters 2012 Annual Report Download - page 189

| 103 >CONSOLIDATED FINANCIAL STATEMENTS - NOTES
The financial statements were prepared using the historical cost convention, with the
exception of certain financial assets and liabilities for which measurement at fair value is
required.
The consolidated financial statements have been prepared on a going concern basis.
Management believes that there are no financial or other indicators presenting material
uncertainties that may cast significant doubt upon the Group’s ability to meet its obligations
in the foreseeable future and in particular in the next 12 months.
CONSOLIDATION PRINCIPLES
Subsidiaries
Subsidiaries are any entities over which the Group has the power to govern the financial
and operating policies (as defined by IAS 27 - Consolidated and Separate Financial
Statements), generally with an ownership of more than one half of the voting rights. The
existence and effect of potential voting rights that are currently exercisable or convertible
are considered when assessing whether the Group controls another entity. Subsidiaries
are fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
The Group uses the acquisition method of accounting to account for business combinations.
The consideration transferred for the acquisition of a subsidiary is measured as the fair
value of the assets transferred, the liabilities incurred and the equity interests issued by
the Group.
The consideration transferred includes the fair value of any asset or liability resulting from
a contingent consideration arrangement.
Acquisition-related costs are expensed as incurred. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis,
the Group recognizes any non-controlling interest in the acquiree at the non-controlling
interest’s proportionate share of the acquiree’s net assets.
The excess of the consideration transferred, the amount of any non-controlling interest
in the acquiree and the acquisition date fair value of any previous equity interest in the
acquiree over the fair value of the Group’s share of the identifiable net assets acquired is
recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary
acquired in the case of a bargain purchase, the difference is recognized directly in the
consolidated statement of income.
In business combinations achieved in stages, the Group remeasures its previously held
equity interest in the acquiree at its acquisition date fair value and recognizes the resulting
gain or loss, if any, in operating income reflecting the Group’s strategy to continue growing
through acquisitions.
1. CONSOLIDATION
PRINCIPLES,
CONSOLIDATION
AREA AND
SIGNIFICANT
ACCOUNTING
POLICIES