Corporate Report for the year ended 30 June 2022
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Section B: Notes to the Group financial statements for the year ended 30 June 2022
Section B: Notes to the Group financial statements for the year ended 30 June 2022
B24 Business combinations and changes in ownership interests Business combinations Accounting policy
Business combinations are accounted for using the acquisition method. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net identifiable assets. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition date fair value of any previous equity interest in the acquiree over the fair value of the Group's share of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the difference is recognised directly in the profit and loss as a gain on bargain purchase. Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of obtaining control. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions. Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in the profit and loss. Changes in ownership interests in controlled subsidiaries Discontinued operations—Accounting policy A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations that has ceased or been disposed of or is held for sale. When an operation is classified as a discontinued operation, the comparative statement of comprehensive income is restated as if the operation had been discontinued from the start of the comparative period. Year ended 30 June 2021 changes in ownership interests Sale of 50% interest in Transurban Chesapeake On 17 December 2020 the Group announced that it had entered into an agreement to divest 50% of its equity interest in TC to AustralianSuper (25%), CPP Investments (15%) and UniSuper (10%). TC is part of the North American segment and includes the concessions for the 495 Express Lanes and 95 Express Lanes. The sale was completed on 31 March 2021 via disposal of the Group’s controlling interest in TC. The Group's investment in TC is equity accounted from 31 March 2021 and the Group’s 50% share of the equity accounted investment’s net profit after tax has been recorded as part of the Group’s continuing operations. As TC represents the majority of the Group’s North American revenue and assets, the Group has classified its previous interest in TC as a discontinued operation up to the date of disposal. Financial information disclosed in relation to discontinued operations includes consolidation adjustments, net finance costs and income tax benefit (current tax and taxable temporary differences) that are recorded outside of the legal entities which form the TC Group, as they are directly related to the performance of the disposal group and the accounting for the transaction upon financial close.
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