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2. Summary of significant accounting policies (continued)
2.9 Intangible assets - Goodwill (continued)
Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating
unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount
of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this
circumstance is measured based on the relative fair values of the operations disposed of and the portion of
the cash-generating unit retained.
Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and
liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and
translated in accordance with the accounting policy set out in Note 2.6.
2.10 Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired.
If any such indication exists, or when an annual impairment assessment for an asset is required, the Group
makes an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For
the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately
identimable cash nows (cash-generating units (“CGU”)).
In assessing value in use, the estimated future cash nows expected to be generated by the asset are discounted
to their present value using a pre-tax discount rate that renects current market assessments of the time value
of money and the risks specimc to the asset. Where the carrying amount of an asset exceeds its recoverable
amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a
CGU or groups of CGUs are allocated mrst to reduce the carrying amount of any goodwill allocated to those
units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of
units on a pro-rata basis.
Impairment losses are recognised in promt or loss except for assets that are previously revalued where the
revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other
comprehensive income up to the amount of any previous revaluation.
An assessment is made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is
reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount
since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased
to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined,
net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in promt
or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation
increase. Impairment loss on goodwill is not reversed in a subsequent period.
2.11 Non-current assets (or disposal groups) classified as assets held for sale
Non-current assets (or disposal groups) are classimed as assets held for sale and stated at the lower of
carrying amount and fair value less cost to sell if their carrying amount is recovered principally through a sale
transaction rather than through a continuing use and a sale is considered highly probable.
2.12 Subsidiaries
A subsidiary is an entity over which the Group has the power to govern the mnancial and operating policies so
as to obtain benemts from its activities, generally accompanying a shareholding of more than one half of the
voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible
are considered when assessing whether the Group controls another entity.
Subsidiaries are consolidated using the acquisition method of accounting except for Johor Specialist
Hospital Sdn Bhd and Ipoh Specialist Hospital Sdn Bhd which were consolidated using the merger method
of accounting. The subsidiaries were consolidated prior to 1 April 2002 in accordance with Malaysia
Accounting Standard 2 “Accounting for Acquisitions and Mergers”, the generally accepted accounting
principles prevailing at that time.
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2011 (continued)
141 ANNUAL REPORT 2011