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Every Note Counts

N otes to the Financial Statements

Year ended 31 December 2010

The Group’s investments in associates include goodwill on acquisition and other intangible assets acquired from business combinations. Where the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest is reduced to zero and the recognition of further losses is discontinued except to the extent that the Group has incurred an obligation or has made payments on behalf of the associate.

Jointly-controlled entities

Jointly-controlled entities are those entities over whose activities the Group has contractual agreements to jointly share the control over the strategic financial and operating decisions of the jointly-controlled entities.

The Group’s interests in jointly-controlled entities are recognised in the consolidated financial statements by including its proportionate share of the income and expenses, assets and liabilities and cash flows with items of a similar nature on a line-by-line basis, after adjustments to align the accounting policies with those of the Group, from the date that joint control commences until the date that joint control ceases.

Loss of control

Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in the income statement. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

Acquisitions of non-controlling interests

Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore no goodwill is recognised as a result of such transactions. The adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associates are eliminated against the investment to the extent of the Group’s interest in the associate. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Accounting for subsidiaries, associates and jointly-controlled entities

Investments in subsidiaries, associates and jointly-controlled entities are stated in the Company’s statement of financial position at cost less accumulated impairment losses.

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