Sustainability and Governance Report
Notes to the FINANCIAL STATEMENTS
[No.
2. Summary of significant accounting policies (cont'd)
2.9 Subsidiaries
A subsidiary is an investee that is controlled by the Group. The Group controls an investee when it is exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over the investee.
In the Company's balance sheet, investments in subsidiaries are accounted for at cost less impairment losses.
2.10 Associates
An associate is an entity over which the Group has the power to participate in the financial and operating policy decisions of the investee but does not have control or joint
control of those policies.
The Group accounts for its investment in associate using the equity method from the date on which it becomes an associate.
On acquisition of the investment, any excess of the cost of the investment over the Group's share of the net fair value of the investee's identifiable assets and liabilities
represents goodwill and is included in the carrying amount of the investment. Any excess of the Group's share of the net fair value of the investee's identifiable assets and
liabilities over the cost of the investment is included as income in the determination of the entity's share of the associate's profit or loss in the period in which the investment
is acquired.
Under the equity method, the investment in associate is carried in the balance sheet at cost plus post-acquisition changes in the Group's share of net assets of the
associate. The profit or loss reflects the share of results of the operations of the associate. Distributions received from associate reduce the carrying amount of the
investment. Where there has been a change recognised in other comprehensive income by the associate, the Group recognises its share of such changes in other
comprehensive income. Unrealised gains and losses resulting from transactions between the Group and associate are eliminated to the extent of the interest in the associate.
When the Group's share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the associate.
After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group's investment in associate. The
Group determines at the end of each reporting period whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group
calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in profit or loss.
The financial statements of the associate are prepared as of the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting
policies in line with those of the Group.
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