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Annual Report 2013
KPJ HEALTHCARE BERHAD
180
2.
Summary of signi cant accounting policies (continued)
2.5
Business combinations
Acquisitions of subsidiaries are accounted for using the acquisition method. The cost of an acquisition is measured as the
aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interests
in the acquiree. The Group elects on a transaction-by-transaction basis whether to measure the non-controlling interests in the
acquiree either at fair value or at the proportionate share of the acquiree’s identi able net assets. Transaction costs incurred are
expensed and included in administrative expenses.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent
changes in the fair value of the contingent considerationwhich is deemed to be an asset or liability, will be recognised in accordance
with MFRS 139 either in pro t and loss or as a change to other comprehensive income. If the contingent consideration is classi ed
as equity, it will not be remeasured. Subsequent settlement is accounted for within equity. In instances where the contingent
consideration does not fall within the scope of MFRS 139, it is measured in accordance with the appropriate MFRS.
When the Group acquires a business, it assesses the nancial assets and liabilities assumed for appropriate classi cation and
designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition
date. This includes the separation of embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition date fair value
and any resulting gain or loss is recognised in pro t or loss.
Business combinations involving entities under common control are accounted for by applying the merger method. The assets
and liabilities of the combining entities are re ected at their carrying amounts reported in the consolidated nancial statements
of the controlling holding company. Any difference between the consideration paid and the share capital of the ‘acquired’ entity
is re ected within equity as merger reserve/de cit. The pro t or loss re ect the results of the combining entities for the full year,
irrespective of when the combination takes place. Comparatives are presented if the entities had always been combined since the
date the entities had come under common control.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised
for non-controlling interests over the net identi able assets acquired and liabilities assumed. If this consideration is lower than fair
value of the net assets of the subsidiary acquired, the difference is recognised in pro t and loss. The accounting policy for goodwill
is disclosed in Note 2.9(a).
Notes to the
Financial Statements
For the financial year ended 31 December 2013
(continued)