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All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the group are
eliminated on consolidation.
Changes in the group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying
amount of the group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries.
Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received
is recognised directly in equity and attributed to the owners of the company.
1.3 Business combinations
The group accounts for business combinations using the acquisition method. The consideration transferred for the acquisition of a business
is the fair value of assets transferred, the liabilities incurred and the equity issued by the group. The consideration transferred includes the
fair value of any asset or liability resulting from a contingent arrangement. If the contingent arrangement is classified as equity, then it is not
remeasured and settlement is accounted for in equity. Subsequent changes in the fair value of other contingent arrangements are recognised
in profit or loss. Acquisition-related costs, apart from costs directly related to the raising of debt and/or equity, are expensed as incurred.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value at
acquisition date. The group recognises any non-controlling interest, at the non-controlling interest’s proportionate share of the subsidiary’s net
assets on an acquisition-by-acquisition basis. When a business combination is achieved in stages, the group’s previously held equity interest in
an entity is remeasured to its acquisition date fair value and the resulting gain or loss recognised in profit or loss.
The excess of the consideration transferred, the amount of any non-controlling interest in the entity and the acquisition date fair value of any
previous equity interest in the business over the fair value of the group’s share of the identifiable net assets acquired is recorded as goodwill. If
this is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss as a bargain purchase gain.
The company carries its investments in subsidiaries at cost less accumulated impairment losses.
1.4 Business combinations under common control
For business combinations involving entities under common control of the group, the group has accounted for the difference between the book
value of the transferred assets as a result of unbundling and the fair value of the consideration transferred as an adjustment to equity.
1.5 Puttable non-controlling interests
Put options held by non-controlling interests in the group’s subsidiaries entitle the non-controlling interest to sell its interest in the subsidiary to
the group at predetermined values and on contracted dates. In such cases, the group consolidates the non-controlling interest’s share of the
equity in the subsidiary and recognises the fair value of the non-controlling interest’s put option, being the present value of the estimated future
purchase price, as a financial liability in the statement of financial position. In raising this liability, the non-controlling interest is derecognised and
any excess or shortfall is charged or realised directly in retained earnings in the statement of changes in equity.
The unwinding of the present value discount on these liabilities is recorded within finance charges in the statement of profit or loss using the
effective interest rate method. The financial liability is fair valued at the end of each financial year and any changes in the value of the liability
as a result of changes in assumptions used to estimate the future purchase price are recorded directly in retained earnings in the statement of
changes in equity.
1.6 Revenue
Revenue comprises amounts earned from customers for goods and services and excludes value added tax. Revenue is net of returns and
allowances, trade discounts and volume rebates.
Bidcorp Limited Annual integrated report 2016 |
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Financial overview