2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.9
Impairment of non-financial assets (continued)
Impairment losses of continuing operations are recognised in profit or loss.
A previously recognised impairment loss is reversed only if there has been a change in the estimates
used to determine the asset’s recoverable amount since the last impairment loss was recognised. If
that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase
cannot exceed the carrying amount that would have been determined, net of depreciation, had no
impairment loss been recognised previously. Such reversal is recognised in profit or loss unless the
asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.
2.10 Subsidiaries
A subsidiary is an investee that is controlled by the Group. The Group controls an investee when it is
exposed, or has rights, to variable returns from its involvement with the investee and has the ability
to affect those returns through its power over the investee.
In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost
less impairment losses.
2.11 Associates
An associate is an entity over which the Group has the power to participate in the financial and
operating policy decisions of the investee but does not have control or joint control of those policies.
The Group account for its investments in associates using the equity method from the date on which
it becomes an associate.
On acquisition of the investment, any excess of the cost of the investment over the Group’s share of
the net fair value of the investee’s identifiable assets and liabilities is accounted as goodwill and is
included in the carrying amount of the investment. Any excess of the Group’s share of the net fair
value of the investee’s identifiable assets and liabilities over the cost of the investment is included
as income in the determination of the entity’s share of the associate’s profit or loss in the period in
which the investment is acquired.
61
HG METAL MANUFACTURING LIMITED
ANNUAL REPORT 2015
NOTES TO THE
FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
