Annual Report 2016
79
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2016
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
– continued
Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of
acquisition of the business (see accounting policy above) less accumulated impairment losses, if
any.
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.
The Group’s policy for goodwill arising on acquisition of an associate is described below.
Investments in associates
An associate is an entity over 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 results and assets and liabilities of associates are incorporated in these consolidated financial
statements using the equity method of accounting, except when the investment, or a portion
thereof, is classified as held for sale, in which case it is accounted for in accordance with IFRS 5.
Under the equity method, an investment in an associate is 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 associate. 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 or joint
venture), 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 the associate.
