Creative 2013 Annual Report Download - page 24

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CREATIVE TECHNOLOGY LTD AND ITS SUBSIDIARIES
plus costs directly attributable to the acquisition. Identiable assets acquired and liabilities and contingent liabilities assumed
in a business combination are measured initially at their fair value on the date of acquisition, irrespective of the extent of
non-controlling interests. Please refer to the paragraph “Intangible assets – Goodwill on acquisitions” for the accounting
policy on goodwill on acquisition of subsidiaries.
Subsidiaries are consolidated from the date on which control is transferred to the Group. They are de-consolidated from the
date on which control ceases.
In preparing the consolidated nancial statements, transactions, balances and unrealised gains on transactions between
group entities are eliminated. Unrealised losses are also eliminated but are considered an impairment indicator of the assets
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Group.
Non-controlling interests are that part of the net results of operations and of net assets of a subsidiary attributable to the
interests which are not owned directly or indirectly by the equity holders of the Company. They are shown separately in
the consolidated income statement, consolidated statement of comprehensive income, statement of changes in equity and
balance sheet. Total comprehensive income is attributed to the non-controlling interests based on their respective interests
in a subsidiary, even if this results in the non-controlling interests having a decit balance.
Please refer to the paragraph “Investments in subsidiaries and associated companies” for the accounting policy on investments
in subsidiaries in the separate nancial statements of the Company.
(b) Transactions with non-controlling interests
Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control over the subsidiary are
accounted for as transactions with equity owners of the Company. Any difference between the change in the carrying amounts
of the non-controlling interests and the fair value of the consideration paid or received is recognised in a separate reserve
within equity attributable to the equity holders of the Company.
(c) Associated companies
Associated companies are entities over which the Group has signicant inuence, but not control, and generally accompanied
by a shareholding giving rise to between and including 20% and 50% of the voting rights. Investments in associated companies
are accounted for in the consolidated nancial statements using the equity method of accounting less impairment losses.
Investments in associated companies are initially recognised at cost. The cost of an acquisition is measured at the fair value
of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly
attributable to the acquisition.
In applying the equity method of accounting, the Group’s share of its associated companies’ post-acquisition prots or losses
are recognised in prot or loss and its share of post-acquisition movements in reserves is recognised in equity directly. These
post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses in
an associated company equals or exceeds its interest in the associated company, including any other unsecured non-current
receivables, the Group does not recognise further losses, unless it has obligations or has made payments on behalf of the
associated company.
Unrealised gains on transactions between the Group and its associated companies are eliminated to the extent of the Group’s
interest in the associated companies. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred. The accounting policies of associated companies have been changed where necessary
to ensure consistency with the accounting policies adopted by the Group.
Dilution gains and losses arising from investments in associated companies are recognised in prot or loss.
NOTES TO THE FINANCIAL STATEMENTS
For the nancial year ended 30 June 2013
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.2 Group accounting (cont’d)
(a) Subsidiaries (cont’d)