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58 WILLAS-ARRAY ELECTRONICS (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2013
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
INVESTMENTS IN SUBSIDIARIES
Investments in subsidiaries are carried at cost less any impairment in net recoverable value that has been recognised
in profit or loss.
GOODWILL
Goodwill arising on an acquisition of a business is carried at cost less accumulated impairment losses, if any, and is
presented separately in the consolidated statement of financial position.
For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups
of cash-generating units) that is expected to benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually or more frequently
when there is indication that the unit may be impaired. For goodwill arising on an acquisition in a reporting
period, the cash-generating unit to which goodwill has been allocated is tested for impairment before the end of
that reporting period. If the recoverable amount of the cash-generating unit is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the
other assets of the unit on a pro rata basis based on the carrying amount of each asset in the unit. Any impairment
loss for goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in
subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination
of the amount of profit or loss on disposal.
INVESTMENTS IN ASSOCIATES
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest
in a joint venture. 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 results and assets and liabilities of associates are incorporated in the consolidated financial statements using
the equity method of accounting. Under the equity method, investments in associates are initially recognised in the
consolidated statement of financial position at cost and adjusted thereafter to recognise the Group’s share of the
profit or loss and other comprehensive income of the associates. When the Group’s share of losses of an associate
exceeds the Group’s interest in that associate (which includes any long-term interests that, in substance, form part of
the Group’s net investment in the associate), the Group discontinues recognising its share of further losses. Additional
losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made
payments on behalf of that associate.