61
waikato-tainui
annual report 2014
Inter‑company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised
losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
(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 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 proportionate interests in income of a jointly controlled operation have been incorporated in the financial statements under
the appropriate headings.
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 in 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.
