PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2014 AND 2013
Expressed in thousands of US Dollars, unless otherwise stated
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
c. Principles of consolidation continued
i. Subsidiaries continued
i.2. Acquisition
The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred
to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration
arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value at the acquisition date.
The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net
assets. Non-controlling interest is reported as equity in the consolidated statements of financial position, separate from the owner of the parent’s entity.
Acquisition-related costs are expensed as incurred. If the business combination is achieved in stages, the Group will remeasure its previously held equity interest
in the acquiree at its acquisition date and recognise the resulting gain or loss, if any, in profit or loss.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or a
liability are recognised in profit or loss. Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.
The excess of the consideration transferred, the amount of any non-controlling interests in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s
share of the identifiable net assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been
reviewed, in the case of a bargain purchase, the difference is recognised directly in profit or loss.
ii. Changes in ownership interest in subsidiaries without change of control
Transactions with non-controlling interests that do not result in a loss of control are accounted for as equity transactions. The difference between the fair value of 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.
iii. Disposal of subsidiaries
When the Group loses control of a subsidiary, the Group derecognises the assets including any goodwill and liabilities of the subsidiary at their carrying amounts at the date when control is lost. Amounts previously
recognised in other comprehensive income are also reclassified to profit or loss, or transferred directly to retained earnings if required under other SFAS.
Any investment retained in the former subsidiary is recognised at its fair value. The difference between the carrying amount of the investment retained at the date when the control is lost and its fair value is recognised in
profit or loss.
iv. Associates and joint ventures
Associates are entities over which the Group has significant influence, but not control, generally accompanied by a shareholding giving rise to voting rights of 20 and above but not exceeding 50. Investment in associates are
accounted for in the consolidated financial statements using the equity method less impairment losses, if any. A joint venture is a joint arrangement in which the parties that share joint control have rights to the net assets of
the arrangement. Joint ventures are accounted for using the equity method less impairment losses, if any.
161
AdARo ENERgy 2014 ANNuAl REPoRT
PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 510
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2014 AND 2013
Expressed in thousands of US Dollars, unless otherwise stated
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
c. Principles of consolidation continued
