Page 80 - SAR141018_Forterra AR 2013

FORTERRA
ANNUAL REPORT 2013
NOTES TO THE
FINANCIAL STATEMENTS
78
3 SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently by the Group to all periods
presented in these financial statements and have been applied consistently by the entities in the
Group, except as explained in Note 2(e), which addresses changes in accounting policies.
(a) Basis of consolidation
(i) Business combinations
Business combinations are accounted for using the acquisition method in accordance
with FRS 103 Business Combination 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
are currently exercisable.
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,
over 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.
Any contingent consideration payable is recognised at fair value at the acquisition
date and included in the consideration transferred. 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.