NOTES TO FINANCIAL STATEMENTS
December 31, 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
BUSINESS COMBINATIONS –The acquisition of subsidiaries from a common controlling shareholder is accounted
for using the merger accounting method. Under this method, the Company has been treated as the holding company
of the subsidiaries for the financial years presented rather than from the date of acquisition of the subsidiaries.
The acquisition of subsidiaries from a party other than a common controlling shareholder is accounted for using
the acquisition method. The consideration for each acquisition is measured at the aggregate of the acquisition date
fair values of assets given, liabilities incurred by the Group to the former owners of the acquiree, and equity interests
issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss
as incurred.
Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent
consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are
adjusted against the cost of acquisition where they qualify as measurement period adjustments (see below). The
subsequent accounting for changes in the fair value of the contingent consideration that do not qualify asmeasurement
period adjustments depends on how the contingent consideration is classified. Contingent consideration that is
classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted
for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent
reporting dates at fair value, with change in fair value recognised in profit or loss.
Where a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are
remeasured to fair value at the acquisition date (i.e. the date the Group attains control) and the resulting gain or loss,
if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date
that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such
treatment would be appropriate if that interest were disposed of.
The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under
the FRS are recognised at their fair value at the acquisition date, except that:
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and measured in accordance with FRS 12
Income Taxes
and FRS 19
Employee Benefits
respectively;
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of an acquiree’s share-based payment awards transactions with share-based payment awards transactions of
the acquirer in accordance with the method in FRS 102
Share-based Payment
at the acquisition date; and
t
Assets (or disposal groups) that are classified as held for sale in accordance with FRS 105
Non-current Assets
Held for Sale and Discontinued Operations
are measured in accordance with that Standard.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share
of the entity’s net assets in the event of liquidation may be initially measured either at fair value or at the non-
controlling interests’ proportionate share of the recognised amounts of the acquiree’s identifiable net assets. The
choice of measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests
are measured at fair value or, when applicable, on the basis specified in another FRS.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete.
Those provisional amounts are adjusted during the measurement period (see below), or additional assets or liabilities
are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition
date that, if known, would have affected the amounts recognised as of that date.
YANLORD LAND GROUP LIMITED
ANNUAL REPORT 2015
70
