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Notes to the Consolidated Financial Statements

31st March 2018

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.2 Consolidation (Continued)

(a) Subsidiaries (Continued)

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 the fair value of 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, 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
profit 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 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 profit or loss.

(b) Separate financial statements

Investments in subsidiaries are accounted for at cost less impairment. Cost includes
direct attributable costs of investment. The results of subsidiaries are accounted for by the
company on the basis of dividend received and receivable.

Impairment testing of the investments in subsidiaries is required upon receiving dividends
from these investments if the dividend exceeds the total comprehensive income of the
subsidiary in the period the dividend is declared or if the carrying amount of the investment in
the separate financial statements exceeds the carrying amount in the consolidated financial
statements of the investee’s net assets including goodwill.

ALCO HOLDINGS LIMITED ANNUAL REPORT 2018 65