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BLUE LABEL INTEGRATED ANNUAL REPORT 2014
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS
CONTINUED
For the year ended 31 May 2014
1.
SIGNIFICANT ACCOUNTING POLICIES (continued)
Basis of consolidation (continued)
Associates (continued)
The Group’s share of post-acquisition profit or loss is recognised in the income statement, and its share of
post-acquisition movements in other comprehensive income is recognised in other comprehensive income
with a corresponding adjustment to 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 legal or constructive
obligations or made payments on behalf of the associate.
The Group determines at each reporting date whether there is any objective evidence that the investment in
the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference
between the recoverable amount of the associate and its carrying value and recognises the amount adjacent
to share of profit/(loss) from associates in the statement of comprehensive income.
Profits and losses resulting from upstream and downstream transactions between the Group and its associate
are recognised in the Group’s financial statements only to the extent of unrelated investor’s interests in the
associates. Unrealised losses are 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.
Dilution gains and losses arising in investments in associates are recognised in the statement of
comprehensive income.
Joint ventures
Under IFRS 11, investments in joint arrangements are classified as either joint operations or joint ventures
depending on the contractual rights and obligations of each investor. The Group has assessed the nature of its joint
arrangements and determined them to be joint ventures. Joint ventures are accounted for using the equity method.
Under the equity method of accounting, interests in joint ventures are initially recognised at cost and
adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses and movements in
other comprehensive income. When the Group’s share of losses in a joint venture equals or exceeds its
interests in the joint venture (which includes any long-term interests that, in substance, form part of the
Group’s net investment in the joint venture), the Group does not recognise further losses, unless it has
incurred obligations or made payments on behalf of the joint venture.
Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the
Group’s interest in the joint ventures. Unrealised losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred. Accounting policies of the joint ventures have been
changed where necessary to ensure consistency with the policies adopted by the Group.
The Company financial statements account for investments in joint ventures at cost less any accumulated
impairment.