Basis of consolidation
Segmental reporting
Principal consolidated accounting policies
Keepmoat . com 31
Basis of consolidation
The Group financial statements incorporate the results of Keepmoat Limited , its subsidiary undertakings and the Group ’ s share of the results of joint ventures and associates .
( a ) Subsidiaries
Subsidiaries are all entities over which the Group has control . The Group controls an entity when the Group 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 . Subsidiaries are fully consolidated from the date on which control is transferred to the Group . They are deconsolidated from the date that control ceases .
Business combinations are accounted for using the acquisition method . The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred , the liabilities incurred and the equity interests issued by the Group in exchange for control of the acquiree . Consideration transferred also includes the fair value of any asset or liability resulting from a contingent consideration arrangement . Acquisition related costs are expensed in administrative costs as incurred . All identifiable assets and liabilities acquired and contingent liabilities assumed are initially measured at their fair values at the acquisition date .
The excess of the consideration transferred and the amount of any non-controlling interest as compared with the Group ’ s share of the identifiable net assets are recognised as goodwill . Where the Group ’ s share of identifiable net assets acquired exceeds the total consideration transferred , a gain from a bargain purchase is recognised immediately in the income statement after the fair values initially determined have been reassessed .
Inter-company transactions , balances and unrealised gains on transactions between Group companies are eliminated . Unrealised losses are eliminated in the same way as unrealised gains but only to the extent that there is no evidence of impairment . Accounting policies of acquired subsidiaries are changed where necessary to ensure consistency with accounting policies adopted by the Group . accounted investment in a joint venture , the carrying amount of the equity interest is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations . Appropriate adjustment is made to the results of joint ventures where material differences exist between a joint venture ’ s accounting policies and those of the Group .
The Group determines at each reporting date whether there is any objective evidence that the investment in the joint venture is impaired . If this is the case , the Group calculates the amount of the impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in the income statement adjacent to its share of profit /( loss ) from associates .
Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group ’ s interest in the joint ventures . Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred .
( c ) Associates
Associates are all entities over which the Group has significant influence but not control , generally accompanying a shareholding of between 20 % and 50 % of the voting rights . Investments in associates are accounted for using the equity method , applying the same policy as set out for joint ventures above .
Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker . The chief operating decision maker who is responsible for allocating resources and assessing performance of the operating segments has been identified as Keepmoat Limited Group ’ s executive directors .
Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group ’ s equity therein . They are initially measured at the noncontrolling interests ’ share of the net fair value of the assets and liabilities recognised . Subsequent to acquisition , noncontrolling interests consist of the amount of those interests at the date of the original business combination and the non-controlling interests ’ share of the changes in equity since the date of the combination .
( b ) Joint ventures
Joint ventures are accounted for using the equity method . Under the equity method of accounting , interest in joint ventures is initially recognised at cost and adjusted thereafter to recognise the Group ’ s share of the post-acquisition profits or losses and movements in other comprehensive income .
Where the Group ’ s share of losses exceeds its equity