Page 151 - index

149StarHub Ltd Annual Report 2015

2.1 Basis of preparation (continued) Overview
FRS 109 Financial Instruments
Strategy
FRS 109 Financial Instruments replaces most of the existing guidance in FRS 39 Financial Instruments: Recognition and
Measurement. It includes revised guidance on classification and measurement of financial instruments, a new expected credit Performance
loss model for calculating impairment on financial assets, and new general hedge accounting requirements. It is mandatory for
adoption by the Group for the annual period beginning 1 January 2018. Governance & Sustainability

FRS 115 Revenue from Contracts with Customers Financials
FRS 115 Revenue from Contracts with Customers establishes a comprehensive framework for determining whether, how much

and when revenue is recognised. It also introduces new cost guidance which requires certain costs of obtaining and fulfilling
contracts to be recognised as separate assets when specified criteria are met. When effective, FRS 115 replaces existing revenue
recognition guidance, including FRS 18 Revenue, FRS 11 Construction Contracts, INT FRS 113 Customer Loyalty Programmes, INT
FRS 115 Agreements for the Construction of Real Estate, INT FRS 118 Transfers of Assets from Customers and INT FRS 31 Revenue
– Barter Transactions Involving Advertising Services. It is mandatory for adoption by the Group for the annual period beginning
1 January 2018.

Amendments to FRS 16 and FRS 38: Clarification of Acceptable Methods of Depreciation and Amortisation.
The amendments to FRS 16 and FRS 38: Clarification of Acceptable Methods of Depreciation and Amortisation clarifies that the

use of revenue-based methods to calculate depreciation of an asset or amortisation of intangible asset are not appropriate. It is
mandatory for adoption by the Group for the annual period beginning 1 January 2016.

2.2 Consolidation
Subsidiaries

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, 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.

Investments in subsidiaries are stated in the Company’s statement of financial position at cost less impairment losses.
Subsidiaries are consolidated with the Company in the Group’s financial statements.

Acquisitions of subsidiaries from related corporations controlled by the ultimate holding company, Temasek Holdings (Private)
Limited (“Temasek”), are accounted for as reconstructions of businesses under common control using the historical cost
method similar to the “pooling of interest” method.

Under the historical cost method, the acquired assets and liabilities were recorded at their existing carrying amounts. The
consolidated financial statements included the results of operations, and the assets and liabilities, of the pooled enterprises as
part of the Group for the whole of the current and preceding periods.

To the extent that the par value of the shares issued in consideration for these transactions exceeded the par value of the shares
held by the related corporations, the difference was recognised as a merger reserve in the Group’s financial statements.

When control over a subsidiary is lost as a result of a transaction, event or other circumstances, the Group derecognises all
assets and liabilities of the subsidiary, any non-controlling interest and the other components of equity related to the subsidiary.
The surplus or deficit arising on the loss of control is recognised in profit or loss. Any remaining interest in the previous
subsidiary is recognised at its fair value at the date that control is lost, with the gain or loss arising recognised in the profit
and loss account. 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.