Basic HTML Version
Glorious Property
96
Annual Report 2011
Notes to the Consolidated Financial Statements
(Continued)
31 December 2011
2 Summary of Significant Accounting Policies
(Continued)
(b) CONSOLIDATION
(Continued)
(ii) Associates
Associates are all entities over which the Group has significant influence but not control, generally accompanying
a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the
equity method of accounting and are initially recognised at cost. The Group’s investment in associates includes
goodwill (net of any accumulated impairment loss) identified on acquisition.
The Group’s share of its associates post-acquisition profits or losses is recognised in the consolidated statement of
comprehensive income, and its share of post-acquisition movements in other comprehensive income is recognised
in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying
amount of the investment. When the Group’s share of losses in an associate equals or exceeds its interest in the
associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has
incurred obligations or made payments on behalf of the associate.
Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s
interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure
consistency with the policies adopted by the Group.
(iii) Jointly controlled entities
Jointly controlled entities are joint ventures whereby the Group and other parties undertake an economic activity
which is subject to joint control and none of the participating parties has unilateral control over the economic
activity. Investments in jointly controlled entities are accounted for using the equity method of accounting and
are initially recognised at cost. The Group’s investments in jointly controlled entities include goodwill (net of any
accumulated impairment) identified on acquisition.
The Group’s share of its jointly controlled entities’ post-acquisition profits or losses is recognised in the consolidated
statement of comprehensive income, and its share of post-acquisition movements in other comprehensive income
is recognised in other comprehensive income. The cumulative post-acquisition movements are adjusted against the
carrying amount of the investment. When the Group’s share of losses in a jointly controlled entity equals or exceeds
its interest in the jointly controlled entity, including any other unsecured receivables, the Group does not recognise
further losses, unless it has incurred obligations or made payments on behalf of the jointly controlled entity.
Unrealised gains on transactions between the Group and its jointly controlled entities are eliminated to the extent
of the Group’s interest in the jointly controlled entities. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred. Accounting policies of jointly controlled entities have
been changed where necessary to ensure consistency with the policies adopted by the Group.