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HG METAL MANUFACTURING LIMITED
ANNUAL REPORT 2014
NOTES TO THE
FINANCIAL STATEMENTS
for the financial year ended 31 December 2014
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.3 Standards issued but not yet effective (cont’d)
With the exception of FRS 115, the directors expect that the adoption of the other standards above
will have no material impact on the financial statements in the period of initial application.
FRS 115 was issued in November 2014 and establishes a new five-step model that will apply to
revenue arising from contracts with customers. Under FRS 115, revenue is recognised at an amount
that reflects the consideration to which an entity expects to be entitled in exchange for transferring
goods or services to a customer. The principles in FRS 115 provide a more structured approach
to measuring and recognising revenue. The new revenue standard is applicable to all entities and
will supersede all current revenue recognition requirements under FRS. Either a full or modified
retrospective application is required for annual periods beginning on or after 1 January 2017 with
early adoption permitted. The Group is currently assessing the impact of FRS 115 and plans to adopt
the new standard on the required effective date.
2.4 Basis of consolidation and business combinations
(a)
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company
and its subsidiaries as at the end of the reporting period. The financial statements of the
subsidiaries used in the preparation of the consolidated financial statements are prepared
for the same reporting date as the Company. Consistent accounting policies are applied to
like transactions and events in similar circumstances.
All intra-group balances, income and expenses and unrealised gains and losses resulting
from intra-group transactions and dividends are eliminated in full.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group
obtains control, and continue to be consolidated until the date that such control ceases.
Losses within a subsidiary are attributed to the non-controlling interest even if that results
in a deficit balance.
