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1. Accounting policies and presentation of annual financial statements
continued
1.4 Business combinations
continued
The group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they
have been recognised in the acquiree’s annual financial statements prior to the acquisition. Assets acquired and liabilities
assumed are measured at their acquisition date fair values.
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of (a) fair
value of consideration transferred, (b) the recognised amount of any non-controlling interest in the acquiree and (c) acquisition
date fair value of any existing equity interest in the acquiree, over the acquisition date fair values of identifiable net assets. If
the fair values of identifiable net assets exceed the sum calculated above, the excess amount (ie gain on a bargain purchase) is
recognised in profit or loss immediately.
1.5 Goodwill
Goodwill is carried at cost as established at the date of acquisition less accumulated impairment losses. An impairment loss
recognised for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the
profit or loss on disposal.
For the purposes of impairment testing, goodwill is allocated to each of the group’s cash-generating units that is expected to
benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there
is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying
amount, the impairment loss is allocated first to the carrying amount of any goodwill allocated to the unit and then to the other
assets of the unit pro rata based on the carrying amount of each asset in the unit.
1.6 Investments in subsidiaries
Subsidiaries are entities over which the group has control.
When the company has less than a majority of the voting rights of an investee, it has power over the investee when the voting
rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally.
The company considers all relevant facts and circumstances in assessing whether or not the company’s voting rights in an
investee are sufficient to give it power, including:
Q
The size of the company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders
Q
Potential voting rights held by the company, other vote holders or other parties
Q
Rights arising from other contractual arrangements
Q
Any additional facts and circumstances that indicate that the company has, or does not have, the current ability to direct
the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’
meetings
In the separate annual financial statements of the company, investments in subsidiaries are accounted for at cost and adjusted
for impairment if applicable.
1.7 Interests in joint operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets,
and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an
arrangement which exists when decisions about the relevant activities require unanimous consent of the parties sharing control.
When a group entity transacts with its joint operation, profits and losses resulting from the transactions with the joint operation
are recognised in the group’s consolidated annual financial statements only to the extent of interests in the joint operation
entity that are not related to the group.
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Hyprop Investments Limited
Integrated Report 2015