Singapore Airlines 2014 Annual Report Download - page 114

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NOTES TO THE FINANCIAL STATEMENTS
31 March 2014
SINGAPORE AIRLINES
2 Summary of Significant Accounting Policies (continued)
(e)฀ Subsidiary,฀associated฀and฀joint฀venture฀companies฀(continued)
On acquisition of the investment, any excess of the cost of the investment over the Group’s share of the net fair value
of the investee’s identifiable assets and liabilities is accounted as goodwill and is included in the carrying amount of
the investment. Any excess of the Group’s share of the net fair value of the investee’s identifiable assets and liabilities
over the cost of the investment is included as income in the determination of the entity’s share of the associated or
joint venture company’s profit or loss in the period in which the investment is acquired.
Under the equity method, the investment in associated or joint venture companies are carried in the statement of
financial position at cost plus post-acquisition changes in the Group’s share of net assets of the associated or joint
venture companies. The profit or loss reflects the share of results of operations of the associated or joint venture
companies. Distributions received from associated or joint venture companies reduce the carrying amount of the
investment. Where there has been a change recognised in other comprehensive income by the associated or joint
venture companies, the Group recognises its share of such changes in other comprehensive income. Unrealised gains
and losses resulting from transactions between the Group and the associated or joint venture companies are eliminated
to the extent of the interest in the associated or joint venture companies.
When the Group’s share of losses in an associated or joint venture company equals or exceeds its interest in the
associated or joint venture company, the Group does not recognise further losses, unless it has incurred obligations or
made payments on behalf of the associated or joint venture company.
After application of the equity method, the Group determines whether it is necessary to recognise an additional
impairment loss on the Group’s investment in associated or joint venture company. The Group determines at the end
of each reporting period whether there is any objective evidence that the investment in the associated or joint venture
company is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the
recoverable amount of the associated or joint venture company and its carrying value and recognises the amount in
profit or loss.
The most recently available audited financial statements of the associated and joint venture companies are used by the
Group in applying the equity method. Where the dates of the audited financial statements used are not co-terminous
with those of the Group, the share of results is arrived at from the last audited financial statements available and
unaudited management financial statements to the end of the accounting period. Where necessary, adjustments are
made to bring the accounting policies in line with those of the Group.
Upon loss of significant influence or joint control over the associated or joint venture company, the Group measures
the retained interest at fair value. Any difference between the fair value of the aggregate of the retained interest and
proceeds from disposal and the carrying amount of the investment at the date the equity method was discontinued is
recognised in profit or loss.
The Group accounts for all amounts previously recognised in other comprehensive income in relation to that associated
or joint venture company on the same basis as would have been required if that associated or joint venture company
had directly disposed of the related assets or liabilities.
When an investment in an associated company becomes an investment in a joint venture company or an investment
in joint venture company becomes an investment in an associated company, the Group continues to apply the equity
method and does not remeasure the retained interest.