Singapore Airlines 2010 Annual Report Download - page 99

ANNUAL REPORT 2009/10
97
2 Summary of Significant 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 financial 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 financial statements.
The Group’s share of the results of the joint venture companies is recognised in the consolidated financial statements
under the equity method on the same basis as associated companies.
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.
(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 identifiable 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 (“CGU”), or groups of CGUs, that are expected to
benefit 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 CGU (or group of CGUs) to which goodwill has been allocated is tested for impairment annually and
whenever there is an indication that the CGU may be impaired, by comparing the carrying amount of the CGU,
including the allocated goodwill, with the recoverable amount of the CGU. Where the recoverable amount of
the CGU (or group of CGUs) is less than the carrying amount, an impairment loss is recognised in the profit and
loss account. Impairment losses recognised for goodwill are not reversed in subsequent periods.
Where goodwill forms part of a CGU (or group of CGUs) 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 CGU retained.