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Notes to the Consolidated Financial Statements

31st March 2015

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

2.2 Subsidiaries (continued)

2.2.1 Consolidation (continued)

(a) Business combinations (continued)

The excess of the consideration transferred, the amount of any non-controlling interest
in the acquiree and the acquisition-date fair value of any previous equity interest in
the acquiree over the fair value of the identifiable net assets acquired is recorded as
goodwill. If the total of consideration transferred, non-controlling interest recognised
and previously held interest measured is less than the fair value of the net assets of
the subsidiary acquired in the case of a bargain purchase, the difference is recognised
directly in the consolidated income statement.

Intra-group transactions, balances and unrealised gains/losses on transactions between
group companies are eliminated. When necessary, amounts reported by subsidiaries
have been adjusted to conform with the Group’s accounting policies.

(b) Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are
accounted for as equity transactions – that is, as transactions with the owners in their
capacity as owners. The difference between fair value of any consideration paid and
the relevant share acquired of the carrying amount of net assets of the subsidiary is
recorded in equity. Gains or losses on disposals to non-controlling interests are also
recorded in equity.

(c) Disposal of subsidiaries

When the Group ceases to have control, any retained interest in the entity is re-
measured to its fair value at the date when control is lost, with the change in carrying
amount recognised in consolidated income statement. The fair value is the initial
carrying amount for the purposes of subsequently accounting for the retained interest
as an associate, joint venture or financial 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 reclassified to
consolidated income statement.

38 ALCO HOLDINGS LIMITED ANNUAL REPORT 2015