Singapore Airlines 2013 Annual Report Download - page 107

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ANNUAL REPORT 2012/13
2 Summary of Significant Accounting Policies (continued)
(c) Basis of consolidation (continued)
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be
recognised in accordance with FRS 39 either in the profit and loss account or as change to other comprehensive income.
If the contingent consideration is classified as equity, it is not remeasured until it is finally settled within equity.
In business combinations achieved in stages, previously held equity interest in the acquiree are remeasured to fair
value at the acquisition date and any corresponding gain or loss is recognised in the profit and loss account.
The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is
recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree’s
identifiable net assets.
Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of
non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the
acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill. In
instances where the latter amount exceeds the former, the excess is recognised as gain on bargain purchase in the
profit and loss account on the acquisition date.
Transactions with non-controlling interests
Non-controlling interest represents the equity in subsidiary companies not attributable, directly or indirectly, to owners
of the Parent, and are presented separately in the consolidated statement of comprehensive income and within equity
in the consolidated statement of financial position, separately from equity attributable to owners of the Parent.
Changes in the Company’s ownership interest in a subsidiary company that do not result in a loss of control are
accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling
interests are adjusted to reflect the changes in their relative interests in the subsidiary company. Any difference
between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or
received is recognised directly in equity and attributed to owners of the Parent.
(d) Subsidiary, associated and joint venture companies
In the Company’s separate financial statements, investments in subsidiary and associated companies are accounted for
at cost less accumulated impairment losses.
A subsidiary company is defined as an entity over which the Group has the power to govern the financial and operating
policies so as to obtain benefits from its activities, generally accompanied by a shareholding giving rise to the majority
of the voting rights.
An associated company is defined as an entity, not being a subsidiary company or joint venture company, in which the
Group has significant influence, but not control, generally accompanied by a shareholding giving rise to not less than
20% of the voting rights. A list of the Group’s associated companies is shown in Note 24 to the financial statements.