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Tiger Brands Limited Integrated Annual Report
2014
Annual financial statements
When the group acquires a business, it assesses the
financial assets and liabilities assumed for
appropriate classification and designation in
accordance with the contractual terms, economic
circumstances and pertinent conditions as at the
acquisition date. This includes the separation of
embedded derivatives in host contracts by the
acquiree.
If the business combination is achieved in stages,
the acquisition date fair value of the acquirer’s
previously held equity interest in the acquiree is
remeasured to fair value as at the acquisition date
through profit or loss.
Any contingent consideration to be transferred by the
acquirer is recognised at fair value at the acquisition
date. Subsequent changes to the fair value of the
contingent consideration which is deemed to be an
asset or liability, is recognised in accordance with
IAS 39 either in profit or loss or as change to other
comprehensive income. If the contingent
consideration is classified as equity, it is not
remeasured until it is finally settled within equity.
In instances where the contingent consideration does
not fall within the scope of IAS 39, it is measured in
accordance with the appropriate IFRS.
The company carries its investments in subsidiaries
and associate companies at cost less accumulated
impairment losses.
Associates
An associate is an entity over which the group has
significant influence through participation in the
financial and operating policy decisions. The entity
is neither a subsidiary nor a joint arrangement.
Associates are accounted for using the equity method
of accounting. Under this method, investments in
associates are carried in the consolidated statement
of financial position at cost, plus post-acquisition
changes in the group’s share of the net assets of the
associate. Goodwill relating to an associate is
included in the carrying amount of the investment
and is not tested separately for impairment.
The income statement reflects the group’s share of the
associate’s profit or loss. However, an associate’s
losses in excess of the group’s interest are not
recognised. Where an associate recognises an entry
directly in other comprehensive income, the group in
turn recognises its share in the consolidated other
comprehensive income. Profits and losses resulting
from transactions between the group and associates
are eliminated to the extent of the interest in the
underlying associate.
After application of the equity method, each
investment is assessed for indicators of impairment.
If applicable, the impairment is calculated as the
difference between the current carrying value and
the higher of its value in use or fair value less cost
of disposal. Impairment losses are recognised in
profit or loss.
Where an investment in an associate is classified
as held-for-sale in terms of IFRS 5, equity accounting
is discontinued and the investment is held at the
lower of its carrying value and fair value less cost
of disposal.
Where an associate’s reporting date differs from the
group’s, the associate prepares financial statements
as of the same date as the group. If this is
impracticable, financial statements are used where
the date difference is no more than three months.
Adjustments are made for significant transactions
between the relevant dates. Where the associate’s
accounting policies differ from those of the group,
appropriate adjustments are made to conform the
accounting policies.
Segment reporting
The group has reportable segments that comprise
the structure used by the chief operating decision-
maker (CODM) to make key operating decisions and
assess performance. The group’s reportable segments
are operating segments that are differentiated by the
activities that each undertakes and the products they
manufacture and market (referred to as business
segments).