2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.11 Non-current assets (or disposal groups) classified as assets held for sale
Non-current assets (or disposal groups) are classified as assets held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use. This condition is regarded as met only when
the sale is highly probable and the asset is available for immediate sale in its present condition subject only to terms
that are usual and customary.
Immediately before classification as held for sale, the measurement of the non-current assets is brought up-to-date in
accordance with applicable MFRS. Then, on initial classification as held for sale, non-current assets (other than
investment properties, deferred tax assets, employee benefits assets, financial assets and inventories) are measured in
accordance with MFRS 5 that is at the lower of carrying amount and fair value less costs to sell. Any differences are
included in the profit or loss.
2.12 Subsidiaries
A subsidiary is an entity over which the Group has all the following:
(i) Power over the investee (such as existing rights that give it the current ability to direct the relevant activities of
the investee);
(ii) Exposure, or rights, to variable returns from its investment with the investee; and
(iii) The ability to use its power over the investee to affect its returns.
In the Company’s separate financial statements, investments in subsidiaries 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 profit or loss.
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 as disclosed in
Note 2.5
.
2.13 Investments in associates
An associate is an entity in which the Group has significant influence. Significant influence is the power to participate
in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
The considerations made in determining significant influence are similar to those necessary to determine control over
subsidiaries.
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 identifiable 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 identifiable 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 profit 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.
220
KPJ Healthcare Berhad annual report
2014
Notes to the
Financial Statements
For the financial year ended 31 December 2014 (continued)
