LensCrafters 2013 Annual Report Download - page 101

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 interests
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% and 50% 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.
Investments in associates are tested for impairment in case there are indicators that their recoverable amount is
lower than their carrying value.
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%, are originally recorded at cost and subsequently measured at fair value. Changes in fair
value are recorded in the consolidated statement of comprehensive income.
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:
(a) assets and liabilities for each consolidated statement of financial position presented are translated at
the closing rate at the date of that consolidated statement of financial position;