NOTES TO FINANCIAL STATEMENTS
December 31, 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased
to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the
carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-
generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
ASSOCIATE AND JOINT VENTURES – 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.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to
the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement,
which exists only when decisions about the relevant activities require unanimous consent of the parties sharing
control.
The results and assets and liabilities of associates or joint ventures are incorporated in these consolidated financial
statements using the equity method of accounting. Under the equity method, an investment in an associate or a joint
venture 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 or joint venture.
When the Group’s share of losses of an associate or a joint venture exceeds the Group’s interest in that associate or
joint venture (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 or joint venture.
Investment in an associate or a joint venture is accounted for using the equity method from the date on which the
investee becomes an associate or a joint venture. On acquisition of the investment in an associate or a joint venture,
any excess of the cost of the investment over the Group’s share of the net fair value of the identifiable assets and
liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the investment.
Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of the
investment, after reassessment, is recognised immediately in profit or loss in the period in which the investment is
acquired.
The requirements of FRS 39 are applied to determine whether it is necessary to recognise any impairment loss with
respect to the Group’s investment in an associate or a joint venture. When necessary, the entire carrying amount
of the investment (including goodwill) is tested for impairment in accordance with FRS 36
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 recognised forms part of the carrying amount of the investment. Any reversal
of that impairment loss is recognised in accordance with FRS 36 to the extent that the recoverable amount of the
investment subsequently increases.
YANLORD LAND GROUP LIMITED
ANNUAL REPORT 2015
78
