72
72
SINGAPORE SHIPPING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended 31 March 2016
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(a) Basis of consolidation (continued)
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to,
or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until the date that control
ceases.
The accounting policies of subsidiaries have been changed when necessary to align them with the
policies adopted by the Group.
Loss of control
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any
non-controlling interests and the other components of equity related to the subsidiary. Any surplus or
deficit arising on the loss of control is recognised in the profit or loss. If the Group retains any interest
in the previous subsidiary, then such interest is measured at fair value at the date that control is lost.
Subsequently, it is accounted for as an equity-accounted investee or as an available-for-sale financial
asset depending on the level of influence retained.
Investments in associated companies and joint ventures
Associated companies are those entities in which the Group has significant influence, but not control
or joint control, over the financial and operating policies of these entities. Significant influence is
presumed to exist when the Group holds between 20% or more of the voting power of another entity.
A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights
to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.
Investments in associated companies and joint ventures are accounted for using the equity method
(equity-accounted investees) and are recognised initially at cost, which includes transaction costs.
Subsequent to initial recognition, the consolidated financial statements include the Group’s share of
the profit or loss and other comprehensive income of the equity-accounted investees, after adjustments
to align the accounting policies of the equity-accounted investees with those of the Group, where the
amounts involved are considered significant to the Group, from the date that significant influence or
joint control commences until the date that significant influence or joint control ceases.
When the Group’s share of losses exceeds its interest in an equity-accounted investee, the carrying
amount of the investment, together with any long-term investments that form part thereof, is reduced
to zero, and the recognition of further losses is discontinued except to the extent that the Group has an
obligation to fund the investee’s operations or has made payments on behalf of the investee.
