Home' Nufarm Annual Report : Nufarm Annual Report Contents 3. Significant accounting policies (continued)
(a) Basis of consolidation (continued)
(ii) Non-controlling interests (NCI)
NCI are measured at their proportionate share of the acquiree’s identifiable net assets at the acquisition date.
When a written put option is established with non-controlling shareholders in an existing subsidiary, then the group will
recognise a liability for the present value of the exercise price of the option. When the NCI still has present access to the
returns associated with the underlying ownership interest, NCI continues to be recognised and accordingly the liability is
considered a transaction with owners and recognised via a reserve. Any changes in the carrying value of the put liability
over time is recognised directly in reserves.
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 where necessary to align them with the policies adopted by the
group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even
if doing so causes the non-controlling interests to have a deficit balance.
(iv) Investments in equity accounted investees
The group’s interests in equity accounted investees comprise interests in associates and a joint venture. Associates are those
entities in which the group has significant influence, but not control or joint control, over the financial and operating policies.
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 associates and joint ventures are accounted for using the equity method and are initially recognised at cost.
The group’s investment includes goodwill identified on acquisition, net of any accumulated impairment losses. The consolidated
financial statements include the group’s share of the income and expenses and equity movements investees, after adjustments
to align the accounting policies with those of the group, from the date that significant influence of equity accounted 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 investment, the carrying amount of that interest, including any long term investments, is
reduced to nil, and the recognition of further losses is discontinued except to the extent that the group has an obligation or
has made payments on behalf of the investee.
(v) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity
accounted investees are eliminated against the investment to the extent of the group’s interest in the investee. Unrealised
losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
(b) Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of group entities at exchange rates
at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date
are retranslated to the functional currency at the foreign exchange rate at that date. Non-monetary assets and liabilities
denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange
rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in
profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate at the date of the transaction. Foreign currency gains and losses are included in net financing costs as they are
mostly derived from financing arrangements.
The group has on issue a hybrid security called Nufarm step-up securities (NSS). Proceeds from the NSS (note 29) have
been utilised to provide funding throughout the group. This creates a foreign currency exposure when the funding currency
denomination differs from the respective entity’s functional currency.
NOTES TO THE FINANCIAL STATEMENTS continued
NUFARM LIMITED ANNUAL REPORT 2014 | 59
Links Archive Nufarm Sustainabilty Report 2014 Nufarm Half Year Report 2015 Navigation Previous Page Next Page