KUWAIT ENERGY plc GROUP
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2013
F-36
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete.
Those provisional amounts are adjusted during the measurement period (see below), or additional assets or
liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as at the
acquisition date that, if known, would have affected the amounts recognised as at that date.
The measurement period is the period from the date of acquisition to the date the Group receives complete
information about facts and circumstances that existed as at the acquisition date and is subject to a maximum of
one year.
Where a business combination is achieved in stages, the Group’s previously-held interests in the acquired entity
are remeasured to fair value at the acquisition date (i.e. the date the Group attains control) and the resulting gain
or loss, if any, is recognised in the consolidated statement of income. Amounts arising from interests in the
acquiree prior to the acquisition date that have previously been recognised in equity are reclassified to the
consolidated statement of income, where such treatment would be appropriate if that interest is disposed of.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling
interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any)
over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after
reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed
exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and
the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognised
immediately in profit or loss as a bargain purchase gain.
Interests in joint ventures
A joint venture is a contractual arrangement whereby the Group and other parties undertake an economic activity
that is subject to joint control that is when the strategic financial and operating policy decisions relating to the
activities of the joint venture require the unanimous consent of the parties sharing control.
Where a Group entity undertakes its activities under joint venture arrangements directly, the Group’s share of
jointly controlled assets and any liabilities incurred jointly with other venturers are recognised in the financial
statements of the relevant entity and classified according to their nature. Liabilities and expenses incurred directly
in respect of interests in jointly controlled assets are accounted for on an accruals basis. Income from the sale or
use of the Group’s share of the output of jointly controlled assets, and its share of joint venture expenses, are
recognised when it is probable that the economic benefits associated with the transactions will flow to/from the
Group and their amount can be measured reliably.
Joint venture arrangements that involve the establishment of a separate entity in which each venturer has an
interest are referred to as jointly controlled entities. The Group reports its interests in jointly controlled entities
using proportionate consolidation
.
The Group’s share of the assets, liabilities, income and expenses of jointly
controlled entities are combined with the equivalent items in the consolidated financial statements on a line-by-
line basis.
Where the Group transacts with its jointly controlled entities, unrealised profits and losses are eliminated to the
extent of the Group’s interest in the joint venture.
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial assets
All financial assets are recognised and derecognised on a trade date where the purchase or sale of a financial asset
is under a contract whose terms require delivery of the financial asset within the timeframe established by the
market concerned, and are initially measured at fair value, plus transaction costs.
