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NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS
CONTINUED
For the year ended 31 May 2015
104
BLUE LABEL INTEGRATED ANNUAL REPORT 2015
1.
SIGNIFICANT ACCOUNTING POLICIES continued
Basis of consolidation continued
(d)
Associates continued
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
associates are recognised in the Group’s financial statements only to the extent of unrelated investors’
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.
The Company financial statements account for investments in associates at cost less any accumulated
impairment.
(e)
Joint arrangements
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.
The Group determines at each reporting date whether there is any objective evidence that the
investment in the joint venture 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 joint ventures in the statement of
comprehensive income.
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.