Singapore Airlines 2016 Annual Report Download - page 120

Notes to the Financial Statements
31 March 2016
2 Summary of Significant Accounting Policies (continued)
(e) Subsidiary, associated and joint venture companies (continued)
Under the equity method, the investment in associated and joint venture companies are carried in the statement of financial position at
cost plus post-acquisition changes in the Group’s share of the net assets of the associated or joint venture companies. The profit and loss
account reflects the share of the 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.
Aer 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 dierence 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 the loss of significant influence or joint control over the associated or joint venture company, the Group measures the retained
interest at fair value. Any dierence 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.
If the Group’s ownership interest in an associated or joint venture company is reduced, but the Group continues to apply the equity method,
the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been recognised in other comprehensive
income relating to that reduction in ownership interest if that gain or loss would be required to be reclassified to profit or loss on the
disposal of the related assets or liabilities.
When an available-for-sale investment becomes an investment in an associated company, the changes in fair value previously recognised
in fair value reserve are reversed through other comprehensive income to bring the investment back to its original cost.
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