Page 143 - KPJ_2011

2. Summary of significant accounting policies (continued)
2.3 Malaysian Financial Reporting Standards
On 19 November 2011, the Malaysian Accounting Standards Board (“MASB”) issued a new MASB approved
accounting framework, the Malaysian Financial Reporting Standards (“MFRS Framework”).
The Company will be required to prepare mnancial statements using the MFRS Framework in its mrst MFRS
mnancial statements for the year ending 31 December 2012.
The directors are of the opinion that the mnancial performance and mnancial position as disclosed in these
mnancial statements for the year ended 31 December 2011 would not be signimcantly different if prepared
under the MFRS Framework.
2.4 Basis of consolidation
The consolidated mnancial statements comprise the mnancial statements of the Company and its subsidiaries
as at the reporting date. The mnancial statements of the subsidiaries used in the preparation of the consolidated
mnancial statements are prepared for the same reporting date as the Company. Consistent accounting policies
are applied to like transactions and events in similar circumstances.
All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group
transactions are eliminated in full.
Acquisitions of subsidiaries are accounted for by applying the purchase method. Identimable assets acquired
and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair
values at the acquisition date. Adjustments to those fair values relating to previously held interests are treated
as a revaluation and recognised in other comprehensive income. The cost of a business combination is
measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred
or assumed, and equity instruments issued, plus any costs directly attributable to the business combination.
Any excess of the cost of business combination over the Group’s share in the net fair value of the acquired
subsidiary’s identimable assets, liabilities and contingent liabilities is recorded as goodwill on the statement of
mnancial position. The accounting policy for goodwill is set out in Note 2.9.
Any excess of the Group’s share in the net fair value of the acquired subsidiary’s identimable assets, liabilities
and contingent liabilities over the cost of business combination is recognised as income in promt or loss on
the date of acquisition. When the Group acquires a business, embedded derivatives separated from the host
contract by the acquiree are reassessed on acquisition unless the business combination results in a change
in the terms of the contract that signimcantly modimes the cash nows that would otherwise be required under
the contract.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control,
and continue to be consolidated until the date that such control ceases.
2.5 Transaction with non-controlling interest (“NCI”)
NCI represent the portion of promt or loss and net assets in subsidiaries not held by the Group and are presented
separately in promt or loss of the Group and within equity in the consolidated statements of mnancial position,
separately from parent shareholders’ equity. Transactions with NCI are accounted for using the entity concept
method, whereby, transactions with NCI are accounted for as transactions with owners. On acquisition of NCI,
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 NCI is recognised directly in equity.
2.6 Foreign currency
(a) Functional and presentation currency
The individual mnancial statements of each entity in the Group are measured using the currency of the primary
economic environment in which the entity operates (“the functional currency”). The consolidated mnancial
statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency.
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2011 (continued)
ANNUAL REPORT 2011 138