2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
2.4
Basis of consolidation and business combinations
(Continued)
(b)
Business combinations
Business combinations are accounted for by applying the acquisition method. Identifiable assets
acquired and liabilities assumed in a business combination are measured initially at their fair values
at the acquisition date. Acquisition-related costs are recognised as expenses in the periods in which
the costs are incurred and the services are received.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at
the acquisition date. Subsequent changes to the fair value of the contingent consideration which
is deemed to be an asset or liability, will be recognised in profit or loss.
The Group elects for each individual business combination, whether non-controlling interest in the
acquiree (if any), that are present ownership interests and entitle their holders to a proportionate
share of net assets in the event of liquidation, 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.
Other components of non-controlling interests are measured at their acquisition date fair value,
unless another measurement basis is required by another FRS.
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 Group has not recorded any goodwill
from the business combination. 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.
2.5
Transactions with non-controlling interests
Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to
owners of the Company.
Changes in the Company’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 Company.
I N N O T E K L I M I T E D
A N N U A L R E P O R T 2 0 1 5
54
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015
