Annual Report 2015
FINANCIAL SECTION
115
3 PRINCIPAL ACCOUNTING POLICIES
(continued)
(a) Consolidation
(continued)
(iv) Transactions with non-controlling interests
Non-controlling interests is the equity in a subsidiary which is not attributable, directly or indirectly, to a
parent. The Group treats transactions with non-controlling interests (namely, acquisitions of additional
interests and disposals of partial interests in subsidiaries that do not result in a loss of control) as
transactions with equity owners of the Group. For purchases of additional interests in subsidiaries from
non-controlling shareholders, 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 of partial interests to non-controlling shareholders are also recorded in equity.
(b) Intangible assets
(i) Goodwill
Goodwill arising on acquisitions of subsidiaries is included in intangible assets. Goodwill arising on
acquisitions of joint ventures and associated companies is included in interests in joint ventures and
associated companies respectively and is tested for impairment as part of overall balance. Separately
recognised goodwill is tested annually for impairment and carried at cost less accumulated impairment
losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of all or part of
an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of testing for impairment. The allocation is
made to those cash-generating units or groups of cash-generating units that are expected to benefit from
the business combination in which the goodwill arose.
(ii) Trademarks
Separately acquired trademarks are recognised at initial cost. Trademarks acquired in a business
combination are recognised at fair value at the date of acquisition. Trademarks with indefinite life are
carried at cost less impairment and are not amortised.
(iii) Hotel management contracts
Separately acquired hotel management contracts are shown at historical cost. Hotel management
contracts acquired in a business combination are recognised at fair value at the date of acquisition. Hotel
management contracts have a finite useful life and are carried at cost less accumulated amortisation.
Amortisation is calculated using the straight-line method to allocate the cost of hotel management
contracts over their estimated useful lives of 20 years.
(iv) Customer relationships
Customer relationships acquired in a business combination are recognised at fair value at the date of
acquisition. Customer relationships have a finite useful life and are carried at cost less accumulated
amortisation. Amortisation is calculated using the straight-line method to allocate the cost of customer
relationships over their estimated useful lives of 20 years.
(v) Process, technology and know-how
Process, technology and know-how acquired in a business combination are recognised at fair value at the
date of acquisition. Process, technology and know-how have a finite useful life and are carried at cost less
accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of
process, technology and know-how over their estimated useful lives of 10 years.
