NOTES TO THE FINANCIAL STATEMENTS
FOR THE FInAncIAL yEAR EnDED 30 JunE 2016
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
b)
Basis of consolidation (cont’d)
When a change in the Company’s ownership interest in a subsidiary results in a loss of control over the
subsidiary, the assets and liabilities of the subsidiary including any goodwill, non-controlling interest and
other components of equity related to the subsidiary company are derecognised. Amounts recognised in
other comprehensive income in respect of that entity are also reclassified to profit or loss or transferred
directly to retained earnings if required by a specific FRS.
Any retained equity interest in the previous subsidiary company is remeasured at fair value at the date that
control is lost. The difference between the carrying amount of the retained interest at the date control is
lost, and its fair value recognised in profit or loss.
c)
Subsidiaries
Subsidiaries are entities controlled by the Group. 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.
In the Company’s statement of financial position, investment in subsidiaries are accounted for at cost
less accumulated impairment losses. On disposal of the investment, the difference between disposal
proceeds and the carrying amounts of the investments are recognised in profit or loss.
d)
Goodwill
Goodwill is initially measured at cost and is subsequently measured at cost less any accumulated
impairment losses.
The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill
might be impaired.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units
expected to benefit from the synergies of the combination. Cash-generating units to which goodwill
has been allocated are 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 the
carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of
any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the
carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in
subsequent periods.
On disposal of a subsidiary, associated company or a jointly controlled entity, the attributable amount of
goodwill is included in the determination of the profit or loss on disposal.
68
ISOTEAM LTD.
ANNUAL REPORT 2016
