5 7
Tainui Group Holdings
Annual Report
2012
5 7
Tainui Group Holdings
Annual Report
2012
Inter‑company transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the Group.
(ii) Transactions with non‑controlling interests
The Group treats transactions with non‑controlling interests as transactions with equity owners of the Group. For
purchases from non‑controlling interests, the difference between 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.
When the Group ceases to have control or signifcant infuence, any retained interest in the entity is re‑measured to its
fair value, with the change in carrying amount recognised in proft or loss. The fair value is the initial carrying amount
for the purposes of subsequently accounting for the retained interest as an associate, joint venture or fnancial asset.
In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted
for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously
recognised in other comprehensive income are reclassifed to proft or loss.
If the ownership interest in an associate is reduced but signifcant infuence is retained, only a proportionate share of the
amounts previously recognised in other comprehensive income are reclassifed to proft or loss where appropriate.
(iii) Associates
Associates are all entities over which the Group has signifcant infuence but not control, generally evidenced by holding
of between 20% and 50% of the voting rights. Investments in associates are accounted for in the consolidated fnancial
statements using the equity method of accounting, after initially being recognised at cost. The Group’s investment in
associates includes goodwill (net of any accumulated impairment loss) identifed on acquisition (refer to note 6).
The Group’s share of its associates’ post‑acquisition profts or losses is recognised in the statement of comprehensive
income, and the Group’s share of post‑acquisition revaluation in property, plant and equipment is recognised in reserves.
The cumulative post‑acquisition movements are adjusted against the carrying amount of the investment. Dividends
receivable from associates are recognised as a reduction in 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 obligations or made
payments on behalf of the associate.
Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest
in the associates. Unrealised losses are also 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.
(iv) Joint ventures
The proportionate interests in income of a jointly controlled operation have been incorporated in the fnancial statements
under the appropriate headings.
The Group’s interests in jointly controlled entities are accounted for by proportionate consolidation. The Group combines
its share of joint ventures’ individual income and expenses, assets and liabilities on a line by line basis with similar items
in the Group’s fnancial statements.
The Group recognises the portion of gains or losses on the sale of assets by the Group to the joint venture that is
attributable to the other venturers. The Group does not recognise its share of the profts or losses from the joint venture
that result from the Group’s purchase of assets from the joint venture until it sells the assets to an independent party.
However, a loss on the transaction is recognised immediately if the loss provides evidence of a reduction in the net
realisable value of current assets, or an impairment loss.
Joint ventures’ accounting policies have been changed where necessary to ensure consistency with the policies adopted
by the Group.