Home' Nufarm Annual Report : Nufarm Annual Report 2015 Contents 3. Significant accounting policies (continued)
(a) Basis of consolidation (continued)
(iv) Investments in equity accounted investees (continued)
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 discontinue 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.
(ii) Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are
translated to Australian dollars at exchange rates at the reporting date. The income and expenses of foreign operations
are translated to Australian dollars at exchange rates at the dates of the transactions.
Foreign currency differences are recognised in other comprehensive income. Since 1 August 2004, the group’s date of
transition to IFRS, such differences have been recognised in the foreign currency translation reserve (FCTR). When a foreign
operation is disposed of, in part or in full, the relevant amount in the FCTR is transferred to profit or loss as part of the profit
or loss on disposal.
When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in
the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part
of a net investment in a foreign operation and are recognised in other comprehensive income, and are presented within
equity in the FCTR.
NOTES TO THE FINANCIAL STATEMENTS continued
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