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Annual Report 2013
KPJ HEALTHCARE BERHAD
186
2.
Summary of signi cant accounting policies (continued)
2.13 Investments in associates (continued)
On acquisition of an investment in associate, any excess of the cost of investment over the Group’s share of the net fair value of the
identi able assets and liabilities of the investee is recognised as goodwill and included in the carrying amount of the investment.
Any excess of the Group’s share of the net fair value of the identi able assets and liabilities of the investee over the cost of
investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the
Group’s share of the associate’s pro t or loss for the period in which the investment is acquired.
An associate is equity accounted for from the date on which the investee becomes an associate.
Under the equity method, on initial recognition the investment in an associate is recognised at cost, and the carrying amount is
increased or decreased to recognise the Group’s share of the pro t or loss and other comprehensive income of the associate
after the date of acquisition. When the Group’s share of losses in an associate equal or exceeds its interest in the associate, the
Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the
associate.
Pro ts and losses resulting from upstream and downstream transactions between the Group and its associate are recognised
in the Group’s nancial statements only to the extent of unrelated investors’ interests in the associate. Unrealised losses are
eliminated unless the transaction provides evidence of an impairment of the asset transferred.
The nancial statements of the associates are prepared as of the same reporting date as the Company. Where necessary,
adjustments are made to bring the accounting policies in line with those of the Group.
After application of the equity method, the Group applies MFRS 139 Financial Instruments: Recognition and Measurement to
determine whether it is necessary to recognise any additional impairment loss with respect to its net investment in the associate
or joint venture. When necessary, the entire carrying amount of the investment is tested for impairment in accordance with MFRS
136 Impairment of Assets as a single asset, by comparing its recoverable amount (higher of value in use and fair value less costs
to sell) with its carrying amount. Any impairment loss is recognised in pro t or loss. Reversal of an impairment loss is recognised
to the extent that the recoverable amount of the investment subsequently increases.
In the Company’s separate nancial statements, investments in associates and joint ventures are accounted for at cost less
impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is
included in pro t or loss.
2.14 Financial assets
Financial assets are recognised in the statement of nancial position when, and only when, the Group and the Company become a
party to the contractual provisions of the nancial instrument.
When nancial assets are recognised initially, they are measured at fair value, plus, in the case of nancial assets not at fair value
through pro t or loss, directly attributable transaction costs.
The Group and the Company determine the classi cation of their nancial assets at initial recognition, and the categories include
loans and receivables and available-for-sale nancial assets.
Notes to the
Financial Statements
For the financial year ended 31 December 2013
(continued)