FGV Annual Report 2013

Felda Global Ventures Holdings Berhad 252 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 22 INVESTMENT IN SUBSIDIARIES (Cont’d.) (b) Incorporation and acquisition of subsidiaries (Cont’d.) (ii) The effects of the acquisition of FHB is as follows: (Cont’d.) The gain on fair value remeasurement of the existing interest in FHB was recorded as follows: RM’000 Fair value of 49% equity interest in FHB 2,113,958 Less: Carrying value of equity interest (1,867,356) Add: Share of FHB’s other reserves 16,678 Gain on fair value remeasurement 263,280 The negative goodwill on acquisition is as follows: RM’000 Purchase consideration for 51% equity interest 2,200,000 Fair value of existing 49% equity interest 2,113,958 4,313,958 Provisional fair value of net assets acquired (4,379,008) Negative goodwill (65,050) The Group recognised the non-current controlling interest in FHB at the non-controlling interest’s proportionate share of the recognised amounts of FHB’s identifiable net assets. Prior to the completion of the acquisition on 27 December 2013, the financial results of FHB had been equity accounted for as share of results of associates in the statement of comprehensive income. The effects of the post-acquisition results on the statement of comprehensive income is not material to the Group’s results for the financial year ended 31 December 2013. Based on FRS 3 “Business Combinations” the Group has a period of one year from the acquisition date to complete the purchase price allocation (“PPA”) and has taken this option. No contingent liabilities were recognised as the legal cases were deemed to be remote and there is a 5 year indemnity on a proportionate basis provided by the seller as part of the acquisition of FHB.