Investor Presentaiton
NOTES TO THE GROUP CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
7
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(a) Principles of Consolidation (continued)
(i) Subsidiaries (continued)
Basis of Consolidation (continued)
Subsequent changes to the fair value of the contingent consideration which is deemed to be an
asset or liability will be recognised in accordance with IFRS 9 in profit or loss. If the contingent
consideration is classified as equity, it is not remeasured until it is finally settled within equity.
In business combinations achieved in stages, previously held equity interests in the acquiree are
restated to fair value at the acquisition date and any corresponding gain or loss is recognised in
profit or loss.
The Group elects for each individual business combination, whether non-controlling interest in the
acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest's
proportionate share of the acquiree's identifiable net assets.
Any excess of the sum of the fair value of the consideration transferred in the business combination,
the amount of non-controlling interest in the acquiree (if any), and the fair value of the Group's
previously held equity interest in the acquiree (if any), over the net fair value of the acquiree's
identifiable assets and liabilities is recorded as goodwill. The accounting policy for goodwill is set out
in Note 7 (r) (i). In instances where the latter amount exceeds the former, the excess is recognised
as gain on bargain purchase in profit or loss on the acquisition date.
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any
non-controlling interests and the other components of equity related to the subsidiary. Any surplus
or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest
in the previous subsidiary, then such interest is measured at fair value at the date that control is lost.
Subsequently it is accounted for as an equity-accounted investee or in accordance with the Group's
accounting policy for financial instruments depending on the level of influence retained.
(ii) Special Purpose Entities
Special Purpose Entities (SPEs) are entities that are created to accomplish a well-defined objective
such as the securitisation of particular assets, or the execution of a specific borrowing or lending
transaction. An SPE is consolidated if the Group is exposed to variable returns from its involvement
in the SPE and has the ability to affect those returns through its power over the SPE based on an
evaluation of the substance of its relationship with the Group.
The following circumstances may indicate a relationship in which, in substance, the Group controls
and consequently consolidates an SPE:
a. The Group has power over the SPE;
b. The Group has exposure to, or rights, to variable returns from its involvement with the SPE; and
The Group has the ability to use its power over the SPE to affect the amount of the Group's returns.
C.
NOTES TO THE GROUP CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
7
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(a) Principles of Consolidation (continued)
(ii) Special Purpose Entities (continued)
The assessment of whether the Group has control over an SPE is carried out at inception and
reassessed at each period end date or if there are changes in the structure/terms of additional
transactions between the group and the SPE.
Information about the Group's securitisation activities is set out in Note 13.
(iii) Fund Management
The Group manages and administers funds on behalf of investors. The financial statements of these
funds are not included in these consolidated financial statements. Information about the Group's
fund management activity is set out in Note 44.
(iv) Fiduciary activities
Assets held in trust or in a fiduciary capacity are not treated as assets of the Group and, accordingly,
are not included in these Group consolidated financial statements. Income earned by the Group
from its fiduciary activities is recognised in accordance with the accounting policies on fee and
commission income.
(v) Transactions with non-controlling interests
Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly,
to owners of the Bank and is presented separately in the Group consolidated statement of
comprehensive income and within equity in the Group consolidated balance sheet, separately from
equity attributable to owners of the Bank.
Changes in the Group's ownership interest in a subsidiary that do not result in a loss of control are
accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling
and non-controlling interests are adjusted to reflect the changes in their relative interests in the
subsidiary. Any difference between the amount by which the non-controlling interest is adjusted
and the fair value of the consideration paid or received is recognised directly in equity and attributed
to owners of the Group.
(vi) Associates
Associates are the entities over which the Group has significant influence but not control, generally
accompanying a shareholding of over 20% of the voting rights, not being a subsidiary or a joint venture.
An associate is equity accounted for from the date the Group obtains significant influence until the
date the Group ceases to have significant influence over the associate.
Under the equity method, the investment in associate is measured in the balance sheet at cost plus
post-acquisition changes in the Group's share of net assets of the associate.
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EMIRATES NBD BANK PJSC - GROUP CONSOLIDATED FINANCIAL STATEMENTS - FOR THE YEAR ENDED 31 DECEMBER 2021
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