Home' Nufarm Annual Report : Nufarm Annual Report 2016 Contents 3. Significant accounting policies (continued)
(a) Basis of consolidation (continued)
(iv) Investments in equity accounted investees
The group’s interests in equity accounted investees comprise interests in associates and joint ventures.
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,
which includes transaction costs. The group’s investment includes goodwill identified on acquisition, net of any accumulated
impairment losses. Subsequent to initial recognition, the consolidated financial statements include the group’s share of the
income and expenses and equity movements of the investees after adjustments to align the accounting policies of the
investees with those of the group, until the date on which significant influence or joint control ceases. On loss of significant
influence the investment is no longer equity accounted and is revalued to fair value.
(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.
(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.
(c) Financial instruments
(i) Non-derivative financial assets
The group initially recognises loans and receivables on the date that they are originated. All other financial assets (including
assets designated at fair value through profit or loss) are recognised initially on the trade date at which the group becomes
a party to the contractual provisions of the instrument.
The group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the
rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risk and rewards
of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the
group is recognised as a separate asset or liability.
NOTES TO THE FINANCIAL STATEMENTS continued
NUFARM LIMITED ANNUAL REPORT 2016
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