China Communications Services Corporation Limited Annual Report 2015
106
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2015
2. SIGNIFICANT ACCOUNTING POLICIES
(continued)
(c) Basis of consolidation
(i) Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business combination in which all of
the combining enterprises are ultimately controlled by the same party or parties both before and after the
business combination, and that control is not transitory. The assets and liabilities obtained are measured at the
carrying amounts as recorded by the enterprise being combined at the combination date. The difference
between the carrying amount of the net assets obtained and the carrying amount of consideration paid for the
combination (or the total face value of shares issued) is adjusted to capital reserve. The combination date is the
date on which one combining enterprise effectively obtains control of the other combining enterprises.
(ii) Business combinations involving entities not under common control
A business combination involving entities not under common control is a business combination in which all of
the combining entities are not ultimately controlled by the same party or parties before the business
combination.
The acquirer, at the acquisition date, allocates the cost of the business combination by recognising the
acquiree’s identifiable asset, liabilities and contingent liabilities at their fair value at that date.
(iii) Subsidiaries and non-controlling interests
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company and its subsidiaries. Control is achieved when the Company:
a.
has power over the investee;
b.
is exposed, or has rights, to variable returns from its involvement with the investee; and
c.
has the ability to use its power to affect its returns.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the
Group loses control of the subsidiary.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share
of the entity’s net assets in the event of liquidation may be initially measured either at fair value or at the non-
controlling interests’ proportionate share of the recognised amounts of the acquiree’s identifiable net assets.
The choice of measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling
interests are measured at their fair value or, when applicable, on the basis specified in another IFRS.
Profit or loss and each item of other comprehensive income are attributed to the owners of the Company and
to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the
Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit
balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies into line with the Group’s accounting policies.
