GROUP ACCOUNTING POLICIES (continued) 2. Consolidation The financial statements include the assets, liabilities and results of the operations of PPS Holdings Trust (‘Parent’) and its subsidiaries (together ‘the Group’). Subsidiaries Subsidiaries are entities over which the Group directly or indirectly has control. An investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investees and has the ability to affect those returns through its power over the investee. Subsidiaries are consolidated from the date on which the Group obtains control. Subsidiaries are deconsolidated when control ceases. All the Group subsidiaries were created by the Group. There are no acquired subsidiaries and there is no goodwill arising on consolidation. All unit trusts and pooled funds under the control of a PPS entity, are consolidated. Third Party unit trust holders’ interests in unit trusts are liabilities of the unit trust and are classified as such in the Group. Intra-group transactions, balances and unrealised gains on transactions are eliminated on consolidation. Unrealised losses are also eliminated, unless the transaction provides evidence of an impairment of the asset transferred. In the Parent’s separate annual financial statements, the interests in subsidiaries are accounted for at cost. A provision for impairment is created if there is evidence of impairment. Associates An associate is an entity over which the Group has the ability to exercise significant influence, but not control, through participation in the financial and operating policy decisions of the entity. Judgement is applied in assessing which entities the Group has the ability to exercise significant influence over. The Group has no shareholding in the associate, and therefore has no rights to either net profits/losses, or net assets of this associate. 3. Financial instruments 3.1 General The Group initially recognises financial assets and liabilities (including assets and liabilities designated at fair value through profit or loss), when the Group becomes a party to the contractual provisions of the instrument. Financial instruments recognised in the Statement of Financial Position include investments, other receivables, cash and cash equivalents, investment contract liabilities, borrowings, accruals, third party liabilities arising on consolidation of unit trusts, and other payables. 3.2 Financial assets The Group has the following financial asset categories: financial assets at fair value through profit or loss, as well as financial assets at amortised cost. All financial assets are initially measured at fair value including, for financial assets not at fair value through profit or loss, any directly attributable transaction costs. All financial asset purchases and sales are initially recognised using trade date accounting. 106 Group Accounting Policies
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