When the forecast transaction that is hedged results in the recognition of a financial asset or a financial liability, the associated gains
and losses that had been deferred in equity are transferred into profit or loss in the same period or periods when the hedged item
affects profit or loss. When the forecast transaction that is hedged results in the recognition of a non-financial asset or a non-financial
liability, the associated gains and losses that had been deferred in equity are transferred from equity and included in the initial
measurement of the cost of the asset or liability.
c. NET INVESTMENT HEDGE
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging
instrument relating to the effective portion of the hedge is recognised in equity while the gain or loss relating to the ineffective portion
is immediately recognised in profit or loss. Gains and losses accumulated in the equity reserve are recognised in profit or loss upon
the disposal of the foreign operation.
III. Embedded derivatives
Derivatives embedded in other financial instruments or other non-financial host contracts are treated separately when their risks and
characteristics are not closely related to those of the host contract. Where an embedded derivative is required to be separated, it is
measured at fair value and change in the fair value is recognised in profit or loss.
S. TRADE AND OTHER RECEIVABLES
Trade and other receivables are stated at the amounts to be received in the future, less any impairment losses. The amounts are
discounted where the effect of the time value of money is material. The recoverability of debts is assessed on an ongoing basis and
provision for impairment is made based on objective evidence and having regard to past default experience. The impairment charge is
recognised in profit or loss. Debts which are known to be uncollectible are written off.
T. PROPERTY AND EQUIPMENT
Property and equipment is initially recorded at cost which is the fair value of consideration provided plus incidental costs directly
attributable to the acquisition.
All items of property and equipment are carried at cost less accumulated depreciation and accumulated impairment charges.
Depreciation is calculated using the straight line method to allocate the cost of assets less any residual value over the estimated
useful economic life.
The carrying amount of property and equipment is reviewed at each reporting date. If any impairment is indicated or exists, the item is
tested for impairment by comparing the recoverable amount of the asset or the cash generating unit (CGU) it is included within to the
carrying value. Where an existing carrying value exceeds the recoverable amount, the difference is recognised in profit or loss.
The net gain or loss on disposal of property and equipment is recognised in profit or loss and is calculated as the difference between
the carrying amount of the asset at the time of disposal and the net proceeds.
U. BUSINESS COMBINATIONS
Business combinations are accounted for using the acquisition method. The consideration transferred for the acquisition is the fair
value of the assets transferred, the equity instruments issued and the liabilities incurred or assumed at the date of exchange. The
consideration includes the fair value of any asset or liability resulting from a contingent consideration arrangement.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured at fair value on
the acquisition date. The Group measures any non-controlling interest, on a transaction-by-transaction basis, either at fair value or at
the non-controlling interest’s proportionate share of the fair value of the identifiable assets and liabilities.
Acquisition related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition fair value of the acquirer’s previously held equity interest in the
acquiree is remeasured to fair value at the acquisition date through profit or loss.
Where settlement of any part of cash consideration is contingent upon some future event or circumstance, the estimated amounts
payable in the future are discounted to their present value at the date of exchange. When the contingent consideration is classified as
a liability, the impact on any subsequent changes in fair value is recognised as profit or loss in the statement of comprehensive
income.
Where the initial accounting for a business combination is determined only provisionally by the first reporting date after acquisition
date, the business combination is accounted for using those provisional values. Any subsequent adjustments to those provisional
values are recognised within 12 months of the acquisition date and are applied effective from the acquisition date.
V. INTANGIBLE ASSETS
I. Acquired intangible assets
Acquired intangible assets are initially recorded at their cost at the date of acquisition being the fair value of the consideration
provided and, for assets acquired separately, incidental costs directly attributable to the acquisition. Intangible assets with finite
useful lives are amortised on a straight line basis (unless the pattern of usage of the benefits is significantly different) over the
estimated useful lives of the assets being the period in which the related benefits are expected to be realised (shorter of legal duration
and expected economic life). Amortisation rates and residual values are reviewed annually and any changes are accounted for
prospectively.
48 IAG ANNUAL REPORT 2015
