The considerations made in determining signicant inuence,
or joint control, are similar to those necessary to determine control
The Group’s investments in joint ventures are accounted for using
the equity method. Under the equity method, the investment in
an associate or a joint venture is initially recognised at cost. The
carrying amount of the investment is adjusted to recognise changes
in the Group’s share of net assets of the associate or joint venture
since the acquisition date. Goodwill relating to the associate or joint
venture is included in the carrying amount of the investment and is
neither amortised nor individually tested for impairment.
The statement of prot or loss reects the Group’s share of the
results of operations of the associate or joint venture. Any change
in OCI of those investees is presented as part of the Group’s OCI. In
addition, when there has been a change recognised directly in the
equity of the associate or joint venture, the Group recognises its
share of any changes, when applicable, in the statement of changes
in equity. Unrealised gains and losses resulting from transactions
between the Group and the associate or joint venture are eliminated
to the extent of the interest in the associate or joint venture.
The aggregate of the Group’s share of prot or loss of an associate
and a joint venture is shown on the face of the statement of prot
or loss outside operating prot and represents prot or loss
after tax and non-controlling interests in the subsidiaries of the
associate or joint venture.
The nancial statements of the associate or joint venture are
prepared for the same reporting period as the Group. When
necessary, adjustments are made to bring the accounting policies
in line with those of the Group. After application of the equity
method, the Group determines whether it is necessary to recognise
an impairment loss on its investment in its associate or joint
venture. At each reporting date, the Group determines whether
there is objective evidence that the investment in the associate
or joint venture is impaired. If there is such evidence, the Group
calculates the amount of impairment as the difference between the
recoverable amount of the associate or joint venture and its carrying
value, then recognises the loss as ‘Share of prot of an associate and
a joint venture’ in the statement of prot or loss.
Upon loss of signicant inuence over the associate or joint control
over the joint venture, the Group measures and recognises any
retained investment at its fair value. Any difference between the
carrying amount of the associate or joint venture upon loss of
signicant inuence or joint control and the fair value of the retained
investment and proceeds from disposal is recognised in prot or loss.
f) Intangible Assets
Intangible assets acquired as part of a business combination or
asset acquisition, other than goodwill, are initially measured
at their fair value at the date of acquisition. Intangible assets
acquired separately are initially recognised at cost. Indenite
life intangible assets are not amortised and are subsequently
measured at cost less any impairment. The gains and losses
recognised in prot or loss arising from the derecognition of
intangible assets are measured as the difference between net
disposal proceeds and the carrying amount of the intangible
asset. The method and useful lives of nite life intangible assets
are reviewed annually. Changes in the expected pattern of
consumption or useful life are accounted for prospectively by
changing the amortisation method or period.
Costs associated with the acquisition of a license or permit to
cultivate hemp are considered to be indenite life identiable
intangible assets and are subject to regular impairment testing.
g) Plant and Equipment
Plant and equipment is stated at historical cost less accumulated
depreciation and impairment. Historical cost includes expenditure
that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the
net cost of each item of plant and equipment over their expected
useful lives as follows:
Plant and equipment (3-5 years)
The residual values, useful lives and depreciation methods are
reviewed, and adjusted if appropriate, at each reporting date.
An item of property, plant and equipment is derecognised upon
disposal or when there is no future economic benet to the group.
Gains and losses between the carrying amount and the disposal
proceeds are taken to prot or loss. Any revaluation surplus
reserve relating to the item disposed of is transferred directly
to retained prots.
Inventories are stated at the lower of cost and net realisable
value. Costs of inventories are determined on a rst-in-rst-out
basis. Net realisable value represents the estimated selling price
for inventories less all estimated costs of completion and costs
necessary to make the sale.
i) Investments and Other Financial Assets
Investments and other nancial assets are initially measured
at fair value. Transaction costs are included as part of the initial
measurement, except for nancial assets at fair value through
prot or loss. They are subsequently measured at either
amortised cost or fair value depending on their classication.
Classication is determined based on the purpose of the
acquisition and subsequent reclassication to other categories
is restricted. The fair values of quoted investments are based on
current bid prices. For unlisted investments, the group establishes
fair value by using valuation techniques. These include the use of
recent arm’s length transactions, reference to other instruments
that are substantially the same, discounted cash ow analysis,
and option pricing models. Financial assets are derecognised
when the rights to receive cash ows from the nancial assets
have expired or have been transferred and the group has
transferred substantially all the risks and rewards of ownership.
| Annual Report 2018
Notes to the Financial Statements