Home' Nufarm Annual Report : Nufarm Annual Report Contents 3. Significant accounting policies (continued)
(i) Principles of consolidation – subsidiaries and joint arrangements (continued)
The group has reviewed its investments in other entities to assess whether the consolidation conclusion in relation to these
entities is different under AASB 10 than under AASB 127. No differences were found and therefore no adjustments to any
of the carrying amounts in the financial statements are required as a result of the adoption of AASB 10.
Under AASB 11 investments in joint arrangements are classified as either joint operations or joint ventures depending on the
contractual rights and obligations each investor has, rather than the legal structure of the joint arrangement. The group has
assessed the nature of its joint arrangements and determined to have joint ventures only.
The accounting for the group’s joint ventures has not changed as a result of the adoption of AASB 11. The group continues
to use the equity method to account for its interest in joint ventures. Under this method, the interests are initially recognised
in the consolidated balance sheet at cost and adjusted thereafter to recognise the group’s share of the post-acquisition profits
or losses and movements in other comprehensive income in profit or loss and other comprehensive income respectively.
(ii) Employee benefits
The adoption of the revised AASB 119 Employee Benefits resulted in two changes to the group’s accounting policy.
• All past service costs are now recognised immediately in profit or loss. Previously, past service costs were recognised on
a straight-line basis over the vesting period if the changes were conditional on the employees remaining in service for a
specified period of time (the vesting period). The impact of this change was immaterial.
• The group now determines the net interest expense (income) for the period on the net defined benefit liability (asset) by
applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net
defined benefit liability (asset) at the beginning of the annual period, taking into account any changes in the net defined
benefit liability (asset) during the period as a result of contributions and benefit payments. Previously, the group determined
interest income on plan assets based on their long term rate of expected return. The impact on the income statement is
immaterial, the net impact on total comprehensive income is nil and there is also no adjustment to the amounts recognised
in the balance sheet from this change.
There are no other material impacts upon adoption of AASB 119.
(a) Basis of consolidation
(i) Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which
control is transferred to the group. Control is the power to govern the financial and operating policies of an entity so as to
obtain benefits from its activities. In assessing control, the group takes into consideration potential voting rights that currently
For acquisitions on or after 1 July 2009, the group measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interests in the acquiree; plus if the business combination is achieved
in stages, the fair value of the existing equity interest in the acquiree; less
• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts
are generally recognised in profit or loss.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the group incurs
in connection with a business combination are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration
is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes
to the fair value of the contingent consideration are recognised in profit or loss.
NOTES TO THE FINANCIAL STATEMENTS continued
58 | NUFARM LIMITED ANNUAL REPORT 2014
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