KIM HENG OFFSHORE & MARINE HOLDINGS LIMITED
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Notes to the financial statements
3 Significant accounting policies (Cont’d)
3.1 Basis of consolidation (Cont’d)
(iii) Acquisitions from entities under common control
Business combinations arising from transfers of interests in entities that are under the control of the
shareholder that controls the Group are accounted for as if the acquisition had occurred at the beginning
of the earliest comparative year presented or, if later, at the date that common control was established;
for this purpose comparatives are restated. The assets and liabilities acquired are recognised at the
carrying amounts recognised previously in the Group controlling shareholder’s consolidated financial
statements. The components of equity of the acquired entities are added to the same components
within Group equity and any gain/loss arising is recognised directly in equity.
(vi) Loss of control
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary and the
other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control
is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such
interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an
equity-accounted investee or as an available-for-sale financial asset depending on the level of influence
retained.
(v)
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements.
(vi) Subsidiaries in the separate financial statements
Investments in subsidiaries are stated in the Company’s statement of financial position at cost less
accumulated impairment losses.
3.2 Foreign currency
(i)
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group
entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated
in foreign currencies at the end of the reporting date are retranslated to the functional currency at
the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference
between amortised cost in the functional currency at the beginning of the year, adjusted for effective
interest and payments during the year, and the amortised cost in foreign currency translated at the
exchange rate at the end of the year.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value
are retranslated to the functional currency at the exchange rate at the date that the fair value was
determined. Non-monetary items in a foreign currency that are measured in terms of historical cost are
translated using the exchange rate at the date of the transaction. Foreign currency differences arising
on retranslation are recognised in profit or loss.
