Notes to the financial statements
Year ended 31 March 2016
3 Significant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these financial
statements, and have been applied consistently by Group entities which addresses changes in accounting policies.
(a)
Basis of consolidation
Subsidiaries
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 these 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 when 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 this results in the non-
controlling interests having a deficit balance.
Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as
transactions with owners and therefore no adjustments are made to goodwill and no gain or loss is recognised
in profit or loss. Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the
subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus
or deficit arising from the loss of control is recognised in the profit or loss. If the Group retains any interest in the
previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is
accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level
of influence retained.
Investment in joint venture
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.
Investment in joint venture is accounted for using the equity method. It is recognised initially at cost, which includes
transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s
share of the profit or loss and other comprehensive income of equity-accounted investees, after adjustments to
align the accounting policies with those of the Group, from the date that joint control commences until the date
that joint control ceases.
When the Group’s share of losses exceeds its interest in an equity-accounted investee, the carrying amount of the
investment, together with any long-term interests that form part thereof, is reduced to zero, and the recognition
of further losses is discontinued except to the extent that the Group has an obligation to fund the investee’s
operations or has made payments on behalf of the investee.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income or 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.
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A-REIT ANNUAL REPORT
2015/2016
