Tainui Group Holdings
Annual Report
2013
51
(b) Transactions with non‑controlling interests
The Group treats transactions with non‑controlling interests as transactions with equity owners of the Group.
For purchases from non‑controlling interests, the difference between any consideration paid and the relevant
share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on
disposals to non‑controlling interests are also recorded in equity.
When the Group ceases to have control or significant influence, any retained interest in the entity is
re‑measured to its fair value, with the change in carrying amount recognised in profit or loss. The fair
value is the initial carrying amount for the purposes of subsequently accounting for the retained interest
as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other
comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the
related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income
are reclassified to profit or loss.
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate
share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss
where appropriate.
(c) Associates
Associates are all entities over which the Group has significant influence but not control, generally evidenced
by holding of between 20% and 50% of the voting rights. Investments in associates are accounted for in the
consolidated financial statements using the equity method of accounting, after initially being recognised
at cost. The Group’s investment in associates includes goodwill (net of any accumulated impairment loss)
identified on acquisition (refer to note 6).
The Group’s share of its associates’ post‑acquisition profits or losses is recognised in the statement of
comprehensive income, and the Group’s share of post‑acquisition revaluation in property, plant and equipment
is recognised in reserves. The cumulative post‑acquisition movements are adjusted against the carrying
amount of the investment. Dividends receivable from associates are recognised as a reduction in the carrying
amount of the investment.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any
other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or
made payments on behalf of the associate.
Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the
Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred. Accounting policies of associates have been changed
where necessary to ensure consistency with the policies adopted by the Group.
(d) Joint ventures
The proportionate interests in income of a jointly controlled operation have been incorporated in the financial
statements under the appropriate headings.
The Group’s interests in jointly controlled entities are accounted for by proportionate consolidation. The Group
combines its share of joint ventures’ individual income and expenses, assets and liabilities on a line by line
basis with similar items in the Group’s financial statements.
The Group recognises the portion of gains or losses on the sale of assets by the Group to the joint venture that
is attributable to the other venturers. The Group does not recognise its share of the profits or losses from the
joint venture that result from the Group’s purchase of assets from the joint venture until it sells the assets to an
independent party. However, a loss on the transaction is recognised immediately if the loss provides evidence
of a reduction in the net realisable value of current assets, or an impairment loss.
Joint ventures’ accounting policies have been changed where necessary to ensure consistency with the
policies adopted by the Group.
(e) Functional and presentation currency
Items included in the financial statements of each of the subsidiaries’ operations are measured using
the currency of the primary economic environment in which it operates (‘the functional currency’). The
consolidated financial statements are presented in New Zealand dollars, which is the Company’s functional
currency and the Group’s presentation currency.
2.5 Revenue recognition
Revenue comprises the fair value of the sale of goods and services, net of Goods and Services Tax (GST),
rebates and discounts and after eliminating sales within the Group. Revenue is recognised as follows:
