PSA International Pte Ltd Annual Report 2010
N otes to the Financial Statements
Year ended 31 December 2010
FRS 27 Consolidated and separate financial statements (2009)
Acquisitions of non-controlling interests are now accounted for as described in note 2.2. The change in accounting policy has been applied prospectively and has no material impact on the Group’s profit after tax.
In 2003, the Group effected a Scheme of Arrangement (Scheme) under Section 210 of the Companies Act, Chapter 50, as sanctioned by the High Court of Singapore. The Scheme resulted in an amalgamation of subsidiaries held by the Company with those held by PSA Corporation Limited. Such interests acquired from parties under common control are consolidated on the historical cost method in a manner similar to the pooling of interest method.
All other business combinations are accounted for under the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in income statement.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in income statement.
Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
The accounting policies of subsidiaries have been adjusted where necessary to align them with the policies adopted by the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.
Associates are those entities in which the Group has significant influence, but not control, over their financial and operating policies. Associates are accounted for in the consolidated financial statements under the equity method.
The consolidated financial statements include the Group’s share of the post-acquisition results and reserves of associates, after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. The latest audited financial statements of the associates are used and where these are not available, unaudited financial statements are used. Any differences between the unaudited financial statements and the audited financial statements obtained subsequently are adjusted for in the subsequent financial year.