Page 88 - China Mobile Limited - Annual Report 2012

China Mobile Limited
Annual Report 2012
82
Notes to the Financial Statements
(Expressed in Renminbi unless otherwise indicated)
1 Significant Accounting Policies (Continued)
(c) Subsidiaries and non-controlling interests
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the
financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control,
potential voting rights that presently are exercisable are taken into account.
An investment in a subsidiary is consolidated into the consolidated financial statements from the date that control
commences until the date that control ceases. Intra-group balances and transactions and any unrealized profits
arising from intra-group transactions are eliminated in full in preparing the consolidated financial statements.
Unrealized losses resulting from intra-group transactions are eliminated in the same way as unrealized gains but
only to the extent that there is no evidence of impairment.
Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to the Company,
and in respect of which the Group has not agreed any additional terms with the holders of those interests which
would result in the Group as a whole having a contractual obligation in respect of those interests that meets the
definition of a financial liability. For each business combination, the Group can elect to measure any non-
controlling interests either at fair value or at their proportionate share of the subsidiary’s net identifiable assets.
Non-controlling interests are presented in the consolidated balance sheet within equity, separately from equity
attributable to the equity shareholders of the Company. Non-controlling interests in the results of the Group are
presented on the face of the consolidated statement of comprehensive income as an allocation of the total profit
or loss and total comprehensive income for the year between non-controlling interests and the equity
shareholders of the Company.
Changes in the Group’s interests in a subsidiary that do not result in a loss of control are accounted for as equity
transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within
consolidated equity to reflect the change in relative interests, but no adjustments are made to goodwill and no
gain or loss is recognized.
When the Group loses control of a subsidiary, it is accounted for as a disposal of the entire interest in that
subsidiary, with a resulting gain or loss being recognized in profit or loss. Any interest retained in that former
subsidiary at the date when control is lost is recognized at fair value and this amount is regarded as the fair value
on initial recognition of a financial asset (see note 1(g)) or, when appropriate, the cost on initial recognition of an
investment in an associate or a jointly controlled entity (see note 1(d)).
In the Company’s balance sheet, an investment in a subsidiary is stated at cost less impairment losses (see note
1(j)).