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Best World International Limited
Annual Report 2011
Best World International Limited
Annual Report 2011
2. Summary of Signifcant Accounting Policies
(
Cont’d
)
Leases
Leases where the lessor effectively retains substantially all the risks and benefts of ownership of the
leased assets are classifed as operating leases. For operating leases, lease payments are recognised
as an expense in proft or loss on a straight-line basis over the term of the relevant lease unless another
systematic basis is representative of the time pattern of the user’s beneft, even if the payments are not
on that basis. Lease incentives received are recognised in proft or loss as an integral part of the total
lease expense. Rental income from operating leases is recognised in proft or loss on a straight-line
basis over the term of the relevant lease unless another systematic basis is representative of the
time pattern of the user’s beneft, even if the payments are not on that basis. Initial direct cost incurred
in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and
recognised on a straight-line basis over the lease term.
Intangible Assets
An identifable non-monetary asset without physical substance is recognised as an intangible asset at
acquisition cost if it is probable that the expected future economic benefts that are attributable to the
asset will fow to the entity and the cost of the asset can be measured reliably. After initial recognition,
an intangible asset with fnite useful life is carried at cost less any accumulated amortisation and any
accumulated impairment losses. An intangible asset with an indefnite useful life is not amortised. An
intangible asset is regarded as having an indefnite useful life when, based on an analysis of all of the
relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net
cash infows for the entity.
The amortisable amount of an intangible asset with fnite useful life is allocated on a systematic basis over
the best estimate of its useful life from the point at which the asset is ready for use. The useful lives are as
follows:
Trademarks
- 5 to 10 years
Product Licenses
- 25 years
Subsidiaries
A subsidiary is an entity including unincorporated and special purpose entity that is controlled by the
group. Control is the power to govern the fnancial and operating policies of an entity so as to obtain
benefts from its activities accompanying a shareholding of more than one half of the voting rights or the
ability to appoint or remove the majority of the members of the board of directors or to cast the majority of
votes at meetings of the board of directors. The existence and effect of potential voting rights that are
currently exercisable or convertible are considered when assessing whether the group controls another entity.
2. Summary of Signifcant Accounting Policies
(
Cont’d
)
Subsidiaries
(
Cont’d
)
In the company’s own separate fnancial statements, an investment in a subsidiary is accounted for at cost
less any allowance for impairment in value. Impairment loss recognised in proft or loss for a subsidiary
is reversed only if there has been a change in the estimates used to determine the asset’s recoverable
amount since the last impairment loss was recognised. The net book value of the investment in a
subsidiary is not necessarily indicative of the amount that would be realised in a current market.
Business Combinations
Business combinations are accounted for by applying the acquisition method. There were none during the
reporting year.
Non-controlling interests
The non-controlling interests in the net assets and net results of a consolidated subsidiary are shown
separately in the appropriate components of the consolidated fnancial statements. For each business
combination, any non-controlling interest in the acquiree
(
subsidiary
)
is initially measured either at fair
value or at the non-controlling interest’s proportionate share of the acquiree’s identifable net assets.
Where the non-controlling interest is measured at fair value, the valuation techniques and key model
inputs used are disclosed in the relevant note. Proft or loss and each component of other comprehensive
income are attributed to the owners of the parent company and to the non-controlling interests. Total
comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if
this results in the non-controlling interest having a defcit balance.
Goodwill
Goodwill is recognised as of the acquisition date measured as the excess of
(
a
)
over
(
b
)
;
(
a
)
being the
aggregate of:
(
i
)
the consideration transferred which generally requires acquisition-date fair value;
(
ii
)
the amount of any non-controlling interest in the acquiree measured in accordance with FRS 103
(
measured either at fair value or as the non-controlling interest’s proportionate share of the acquiree’s net
identifable assets
)
; and
(
iii
)
in a business combination achieved in stages, the acquisition-date fair value
of the acquirer’s previously held equity interest in the acquiree; and
(
b
)
being the net of the acquisition-
date amounts of the identifable assets acquired and the liabilities assumed measured in accordance with
this FRS 103.
After initial recognition, goodwill acquired in a business combination is measured at cost less any
accumulated impairment losses. Goodwill is not amortised. Irrespective of whether there is any indication
of impairment, goodwill
(
and also an intangible asset with an indefnite useful life or an intangible asset
not yet available for use
)
are tested for impairment, at least annually. Goodwill impairment is not reversed
in any circumstances.
NOTES TO THE
FINANCIAL STATEMENTS
31 DECEMBER 2011
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