FGV Annual Report 2012

25 F i n a n c i a l S t a t e m e n t s 2 0 1 2 P e n y a t a K e w a n g a n 3 SIGNIFICANT ACCOUNTING POLICIES (continued) (d) Associates (continued) The Group’s share of its associates’post-acquisition profits or losses after tax and non-controlling interests is recognised in profit or loss, and its share of post-acquisition movements in respective reserves, other than movements in non-controlling interests recorded in the associates’own consolidated financial statements, is recognised in the respective reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any long-term interest which in substance is net investment, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The Group recognises the portion of gains or losses on the sale of assets by the Group to the associates that is attributable to the other shareholders. The Group does not recognise its share of profits or losses from the associates that result from the purchase of assets by the Group from the associates until it resells the assets to an independent party. However, if a loss on the transaction provides evidence of a reduction in the net realisable value of current assets or an impairment loss, the loss is recognised immediately. The Group recognises its share of profits or losses from the associates that results from the purchase of assets by the other associates or jointly controlled entities of the Group. Where necessary, in applying the equity method, appropriate adjustments are made to the associates’ financial statements to ensure consistency with the Group’s accounting policies. In the Company’s financial statements, investments in associates are shown at cost. Where an indication of impairment exists, the carrying amount of the investments in associates is assessed and written down immediately to its recoverable amount (Note 3(g)). On disposal of the associates, the difference between net disposal proceeds and its carrying amount is charged/credited to profit or loss. (e) Jointly controlled entities Jointly controlled entities are all those corporations, partnerships or other entities over which there is contractually agreed sharing of control by the Group with one or more parties where the strategic financial and operating decisions relating to the entities require unanimous consent of the parties sharing control. The Group’s interest in the jointly controlled entities accounted for in the consolidated financial statements by the equity method of accounting. Equity accounting is discontinued when the Group ceases to have joint control over the jointly controlled entity or when a jointly controlled entity is classified as an asset held for sale. Equity accounting involves recognising the Group’s share of the post acquisition results of jointly controlled entities in profit or loss and its share of post acquisition movements within the respective reserves. The cumulative post acquisition movements are adjusted against the carrying amount of the investment. The Group recognises the portion of gains or losses on the sale of assets by the Group to the jointly controlled entities that is attributable to the other venturers. The Group does not recognise its share of profits or losses from the jointly controlled entities that result from the purchase of assets by the Group from the jointly controlled entities until it resells the assets to an independent party. However, if a loss on the transaction provides evidence of a reduction in the net realisable value of current assets or an impairment loss, the loss is recognised immediately. The Group recognises its share of profits or losses from the jointly controlled entities that results from the purchase of assets by the associates or other jointly controlled entities of the Group. Where necessary, in applying the equity method, appropriate adjustments are made to the jointly controlled entities financial statements to ensure consistency with the Group’s accounting policies. In the Company’s financial statements, investments in jointly controlled entities are shown at cost. Where an indication of impairment exists, the carrying amount of the investments in jointly controlled entities is assessed and written down immediately to its recoverable amount (Note 3(g)). On disposal of the jointly controlled entities, the difference between net disposal proceeds and its carrying amount is charged/credited to profit or loss.