Page 42 - Nanyang Technological University

NOTES TO FINANCIAL STATEMENTS
(cont’d)
31 March 2016

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2 . 2 C o n s o l i d a t i o n
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the University Company and entities

controlled by the University Company and its subsidiaries. Control is achieved when the University Company:
(i) Has power over the investee;
(ii) Is exposed, or has rights, to variable returns from its involvement with the investee; and
(iii) Has the ability to use its power to affect its returns.
The University Company reassesses whether or not it controls an investee if facts and circumstances indicate

that there are changes to one or more of the three elements of control listed above.
Consolidation of a subsidiary begins when the University Company obtains control over the subsidiary and ceases

when the University Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated statement of profit or loss and other
comprehensive income from the date the University Company gains control until the date when the University
Company ceases to control the subsidiary.
The accounting policies of subsidiaries have been changed where necessary to align them with the policies
adopted by the Group.
Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements.
Investments in subsidiaries are carried at cost less any impairment in net recoverable value that has been
recognised in profit or loss.
Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the
date on which control is transferred to the Group. The consideration for each acquisition is measured at the
aggregate of the acquisition date fair values of assets given, liabilities incurred by the Group to the former owners
of the acquiree, and equity interests issued by the Group in exchange for control of the acquiree.

40 NTU ANNUAL REPORT 2016