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2.
Summary of significant accounting policies (cont’d.)
2.4 Basis of consolidation
2.4.1 Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity
when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control
is transferred to the Group. They are deconsolidated from the date that control ceases.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of
the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any
asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.
The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair
value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net
assets. Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquirer’s previously held equity interest in the acquiree is
remeasured to fair value at the acquisition date through profit or loss.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in
accordancewithMFRS 139 either in profit or loss or as a change to other comprehensive income. Contingent consideration
that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets
acquired is recognised as goodwill. If the total of consideration transferred, non-controlling interest recognised and
previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a
bargain purchase, the difference is recognised directly in the income statement.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated.
Unrealised losses are also eliminated. Where necessary, amounts reported by subsidiaries have been adjusted to
conform with the Group’s accounting policies.
2.4.2 Transactions with non-controlling interests
Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group
and are presented separately in profit or loss of the Group and within equity in the consolidated statements of financial
position, separately from parent shareholders’ equity. Transactions with non-controlling interests are accounted for
using the entity concept method, whereby, transactions with non-controlling interests are accounted for as transactions
with owners. On acquisition of non-controlling interests, the difference between the consideration and book value of the
share of the net assets acquired is recognised directly in equity. Gain or loss on disposal to non-controlling interests is
recognised directly in equity.
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017
[ ]
AirAsia Berhad
REPORTS AND FINANCIAL STATEMENTS
252