Singapore Airlines 2009 Annual Report Download - page 100

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NOTES TO THE FINANCIAL STATEMENTS
31 March 2009
2 Accounting Policies (continued)
(d) Subsidiary, associated and joint venture companies (continued)
A joint venture company is a contractual arrangement whereby two or more parties undertake an economic
activity that is subject to joint control, where the strategic fi nancial and operating decisions relating to the
activity require the unanimous consent of the parties sharing control. A list of the Group’s joint venture
companies is shown in Note 24 to the fi nancial statements.
The Group’s share of the results of the joint venture companies is recognised in the consolidated fi nancial
statements under the equity method on the same basis as associated companies.
The most recently available audited fi nancial statements of the associated and joint venture companies are
used by the Group in applying the equity method. Where the dates of the audited fi nancial statements used
are not co-terminous with those of the Group, the share of results is arrived at from the last audited fi nancial
statements available and unaudited management fi nancial 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.
(e) Intangible assets
(i) Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost
of the business combination over the Group’s interest in the net fair value of the identifi able assets,
liabilities and contingent liabilities. Following initial recognition, goodwill is measured at cost less
any accumulated impairment losses. Goodwill is reviewed for impairment, at least annually or more
frequently if events or changes in circumstances indicate that the carrying value may be impaired.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Group’s cash-generating units, or groups of cash-generating
units, that are expected to benefi t from the synergies of the combination, irrespective of whether
other assets or liabilities of the Group are assigned to those units or groups of units.
The cash-generating unit (or group of cash-generating units) to which goodwill has been allocated is
tested for impairment annually and whenever there is an indication that the cash-generating unit may
be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated
goodwill, with the recoverable amount of the cash-generating unit. Where the recoverable amount
of the cash-generating unit (or group of cash-generating units) is less than the carrying amount,
an impairment loss is recognised in the profi t and loss account. Impairment losses recognised for
goodwill are not reversed in subsequent periods.
Where goodwill forms part of a cash-generating unit (or group of cash-generating units) and part of
the operation within that unit is disposed of, the goodwill associated with the operation disposed of
is included in the carrying amount of the operation when determining the gain or loss on disposal of
the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values
of the operation disposed of and the portion of the cash-generating unit retained.