Huawei 2014 Annual Report Download - page 67

65Consolidated Financial Statements Summary and Notes
from intra-group transactions are eliminated
in full in preparing the consolidated financial
statements. Unrealised losses resulting from
intra-group transactions are eliminated in the
same way as unrealised gains but only to the
extent that there is no evidence of impairment.
Non-controlling interests represent the equity in
a subsidiary not attributable directly or indirectly
to the Company, and in respect of which the
Group has not agreed any additional terms with
the holders of those interests which would result
in the Group as a whole having a contractual
obligation in respect of those interests that
meets the definition of a financial liability. For
each business combination, the Group can elect
to measure any non-controlling interests either
at fair value or at the non-controlling interests'
proportionate share of the subsidiary's net
identifiable assets.
Non-controlling interests are presented in the
consolidated statement of financial position
within equity, separately from equity attributable
to the equity holders of the Company.
Non-controlling interests in the results of
the Group are presented on the face of the
consolidated statement of profit or loss and
the consolidated statement of profit or loss and
other comprehensive income as an allocation of
the total profit or loss and total comprehensive
income for the year between non-controlling
interests and the equity holders of the Company.
Changes in the Group's interests in a subsidiary
that do not result in a loss of control are
accounted for as equity transactions, whereby
adjustments are made to the amounts of
controlling and non-controlling interests within
consolidated equity to reflect the change in
relative interests, but no adjustments are made
to goodwill and no gain or loss is recognised.
When the Group loses control of a subsidiary,
it is accounted for as a disposal of the entire
interest in that subsidiary, with a resulting gain
or loss being recognised in profit or loss. Any
interest retained in that former subsidiary at the
date when control is lost is recognised at fair
value and this amount is regarded as the fair
value on initial recognition of a financial asset
(see note 1(n)) or, when appropriate, the cost
on initial recognition of an investment in an
associate or joint venture (see note 1(f)).
(f) Associates and joint ventures
An associate is an entity in which the Group
has significant influence, but not control or
joint control, over its management, including
participation in the financial and operating policy
decisions.
A joint venture is an arrangement whereby the
Group and other parties contractually agree
to share control of the arrangement, and have
rights to the net assets of the arrangement.
An investment in an associate or a joint venture
is accounted for in the consolidated financial
statements using the equity method. Under
the equity method, the investment is initially
recorded at cost, adjusted for any excess of the
Group's share of the acquisition-date fair values
of the investee's identifiable net assets over the
cost of the investment (if any). Thereafter, the
investment is adjusted for the post acquisition
change in the Group's share of the investee's net
assets and any impairment loss relating to the
investment (see note 1(l)). Any acquisition-date
excess over cost, the Group's share of the post-
acquisition, post-tax results of the investees
and any impairment losses for the year are
recognised in the consolidated statement of
profit or loss, whereas the Group's share of the
post-acquisition post-tax items of the investees'
other comprehensive income is recognised in
the consolidated statement of profit or loss and
other comprehensive income.