SBN HOLDINGS LIMITED Annual Report 2022
148
ANNEXURE D - DETAILED ACCOUNTING
POLICIES
SBN HOLDINGS LIMITED
Annual report 2022
149
The following are the significant accounting policies were applied in the preparation of the group and company financial statements.
Basis of consolidation
Subsidiaries
Separate financial
statements
Consolidated financial
statements
1.
Basis of consolidation
Subsidiaries
Separate financial statements
Common control
transactions
Foreign currency
translations
Group companies
Transactions and balances
Investments in subsidiaries are accounted for at cost less accumulated impairment losses (where applicable) in the separate
financial statements. The carrying amounts of these investments are reviewed annually for impairment indicators and, where
an indicator of impairment exists, are impaired to the higher of the investment's fair value less costs to sell or value in use.
Consolidated financial statements
The accounting policies of subsidiaries that are consolidated by the group conform to the group's accounting policies.
Intragroup transactions, balances and unrealised gains/(losses) are eliminated on consolidation. Unrealised losses are
eliminated in the same manner as unrealised gains, but only to the extent that there is no evidence of impairment. The
proportion of comprehensive income and changes in equity allocated to the group and non-controlling interest are determined
on the basis of the group's present ownership interest in the subsidiary.
Subsidiaries are consolidated from the date on which the group acquires control up to the date that control is lost. Control is
assessed on a continuous basis. For mutual funds the group further assesses its control by considering the existence of either
voting rights or significant economic power.
Туре
Acquisitions
Disposal of a
subsidiary
Partial disposal
of a subsidiary
Initial
measurement of
non-controlling
interest
Description
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the
group. The consideration transferred is measured as the sum of the fair value of the assets given,
equity instruments issued and liabilities incurred or assumed at the acquisition date. The consideration
includes any asset, liability or equity resulting from a contingent consideration arrangement. The
obligation to pay contingent consideration is classified as either a liability or equity based on the
terms of the arrangement. The right to a return of previously transferred consideration is classified
as an asset. Transaction costs are recognised within profit or loss as and when they are incurred.
Where the initial accounting is incomplete by the end of the reporting period in which the business
combination occurs (but no later than 12 months since the acquisition date), the group reports
provisional amounts. Where applicable, the group adjusts retrospectively the provisional amounts to
reflect new information obtained about facts and circumstances that existed at the acquisition date
and affected the measurement of the provisional amounts. Identifiable assets acquired, liabilities and
contingent liabilities assumed in a business combination are measured initially at their fair values at
the acquisition date, irrespective of the extent of any non-controlling interest. The excess (shortage)
of the sum of the consideration transferred (including contingent consideration), the value of non-
controlling interest recognised and the acquisition date fair value of any previously held equity interest
in the subsidiary over the fair value of identifiable net assets acquired is recorded as goodwill in the
statement of financial position (gain on bargain purchase, which is recognised directly in non-trading
and capital related items). When a business combination occurs in stages, the previously held equity
interest is remeasured to fair value at the acquisition date and any resulting gain or loss is recognised in
non-trading and capital related items. Increases in the group's interest in a subsidiary, when the group
already has control, are accounted for as transactions with equity holders of the group. The difference
between the purchase consideration and the group's proportionate share of the subsidiary's additional
net asset value acquired is accounted for directly in equity.
A disposal arises where the group loses control of a subsidiary. When the group loses control of a
subsidiary, the profit or loss on disposal is calculated as the difference between the fair value of the
consideration received (including the fair value of any retained interest in the underlying investee) and
the carrying amount of the assets and liabilities and any non-controlling interest. Any gains or losses in
OCI that relate to the subsidiary are reclassified to profit or loss at the time of the disposal. On disposal
of a subsidiary that includes a foreign operation, the relevant amount in the FCTR is reclassified to
profit or loss at the time at which the profit or loss on disposal of the foreign operation is recognised.
A partial disposal arises as a result of a reduction in the group's ownership interest in an investee
that is not a disposal (i.e. a reduction in the group's interest in a subsidiary while retaining control).
Decreases in the group's interest in a subsidiary, where the group retains control, are accounted for
as transactions with equity holders of the group. Gains or losses on the partial disposal of the group's
interest in a subsidiary are computed as the difference between the sales consideration and the group's
proportionate share of the investee's net asset value disposed of and are accounted for directly in
equity. On the partial disposal of a subsidiary that includes a foreign operation, a proportionate share of
the balance of the FCTR is transferred to non-controlling interest.
The group elects on each acquisition to initially measure non-controlling interest on the
acquisition date at either fair value or at the non-controlling interest's proportionate share of the
investees' identifiable net assets.View entire presentation