Notes to the Consolidated Financial Statements
20
Dar Al-Maal Al-Islami Trust
Annual Report 2013
Any contingent consideration
to be transferred by the Group
is recognised at fair value at the
acquisition date. Subsequent
changes to the fair value of the
contingent consideration that is
deemed to be an asset or liability
is recognised in accordance with
IAS 39 either in profit or loss or as
a change to other comprehensive
income. Contingent consideration
that is classified as equity is not
re-measured, and its subsequent
settlement is accounted for within
equity.
The excess of the consideration
transferred, the amount of any non-
controlling interest in the acquiree
and the acquisition-date fair value
of any previous equity interest in
the acquiree over the fair value of
the identifiable net assets acquired
is recorded as goodwill. If the
total of consideration transferred,
non-controlling interest recognised
and previously held interest
measured is less than the fair
value of the net assets of the
subsidiary acquired in the case of
a bargain purchase, the difference
is recognised directly in the income
statement.
Intercompany
transactions,
balances and unrealised gains
on transactions between group
companies
are
eliminated.
Unrealised losses are also
eliminated unless the transaction
provides evidence of an impairment
of the asset transferred. Subsidiaries’
accounting policies have been
changed where necessary to
ensure consistency with the policies
adopted by the Group.
Costs associated with the
restructuring of a subsidiary as a
part of the acquisition or subsequent
to the acquisition are included in the
consolidated statement of income
upon the date of commitment.
(b) Transactions and
(b)
non-controlling interests
The Group treats transactions
with non-controlling interests as
transactions with equity owners of
the Group. For purchases from non-
controlling interests, the difference
between any consideration paid and
the relevant share acquired of the
carrying value of net assets of the
subsidiary is recorded in equity.
Gains or losses on disposals to
non-controlling interests are also
recorded in equity.
When the Group ceases to have
control or significant influence, any
retained interest in the entity is
remeasured to its fair value, with
the change in carrying amount
recognised in profit or loss. The fair
value is the initial carrying amount
for the purposes of subsequently
accounting for the retained interest
as an associate, joint venture or
financial asset.
In addition, any amounts previously
recognised in other comprehensive
income in respect of that entity are
accounted for as if the Group had
directly disposed of the related assets
or liabilities. This may mean that
amounts previously recognised in
other comprehensive income are
reclassified to profit or loss.
If the ownership interest in
an associate is reduced but
significant influence is retained,
only a proportionate share of the
amounts previously recognised in
other comprehensive income are
reclassified to profit or loss where
appropriate.
(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 by
the equity method of accounting
and are initially recognised at
cost. The Group’s investment in
associates includes goodwill (net of
any accumulated impairment loss)
identified on acquisition.
The Group’s share of its associates’
post-acquisition profits or losses
is recognised in the consolidated
statement of income, and its share
of post-acquisition movements in
reserves is recognised in reserves.
The cumulative post-acquisition
movements are adjusted against the
carrying amount of the investment.
When the Group’s share of losses in
an associate equals or exceeds its
interest in the associate, including
any other unsecured receivables,
the Group does not recognise
further losses, unless it has incurred
obligations or made payments on
behalf of the associate.
Unrealised gains on transactions
between the Group and its
associates are eliminated to the
extent of the Group’s interest in
the associates. Unrealised losses
are also eliminated unless the
transaction provides evidence of an
impairment of the asset transferred.
Accounts for associated companies
have been restated to conform
with Group accounting policies,
if necessary, except as otherwise
disclosed.
Where a subsidiary or an associated
company is acquired and held
exclusively with a view to its disposal
within the next twelve months, the
subsidiary or associated company
is classified as an investment held
for sale in the Group’s consolidated
financial statements.
Dilution gains and losses arising
in investments in associates are
recognised in the income statement.
Foreign currency translation
(a) Functional and presentation
(a)
currency
Items included in the financial
statements of each of the Group’s
subsidiaries are measured using
the currency of the primary
economic environment in which
the entity operates (the functional
currency). The consolidated
financial statements are presented
in United States dollars, which is
DMI’s functional and presentation
currency.
(b) Transactions and balances
Foreign currency transactions
are translated into the functional
currency using the exchange
rates prevailing at the dates of
the transactions. Foreign exchange
gains and losses resulting from
the settlement of such transactions
and from the translation at year-
end exchange rates of monetary
assets and liabilities denominated
in foreign currencies are recognised
