Mandarin Oriental International Limited - Mandarin Oriental Hotel ...
Mandarin Oriental International Limited - Mandarin Oriental Hotel ...
Mandarin Oriental International Limited - Mandarin Oriental Hotel ...
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
38<br />
PRINCIPAL ACCOUNTING POLICIES CONTINUED<br />
V Earnings per share<br />
Basic earnings per share are calculated on profit attributable to shareholders and on the weighted average<br />
number of shares in issue during the year.The weighted average number excludes the shares held by the Trustee<br />
under the Senior Executive Share Incentive Schemes. For the purpose of calculating diluted earnings per share,<br />
the weighted average number of shares is adjusted for the number of shares which are deemed to be issued for<br />
no consideration under the Senior Executive Share Incentive Schemes based on the average share price during<br />
the year.<br />
W Critical accounting estimates and assumptions<br />
Estimates and judgements used in preparing the financial statements of the Company are continually evaluated<br />
and are based on historical experience and other factors, including expectations of future events that are believed<br />
to be reasonable.The resulting accounting estimates will, by definition, seldom equal the related actual results.<br />
The estimates and assumptions that have a significant effect on the carrying amount of assets and liabilities are<br />
discussed below:<br />
i) Impairment of assets<br />
The Group tests annually whether goodwill or other assets that have indefinite useful lives have suffered any<br />
impairment. Other assets are reviewed for impairment whenever events or changes in circumstances indicate<br />
that the carrying amount of the asset exceeds its recoverable amount.The recoverable amount of an asset or a<br />
cash generating unit is determined based on value-in-use calculations prepared on the basis of management’s<br />
assumptions and estimates.<br />
ii) Property valuation<br />
In arriving at the fair value of the properties, the independent valuers have to make assumptions and<br />
economic estimates. Should these assumptions and estimates change, or not be met, the valuation as adopted<br />
in the financial statements will be affected.<br />
iii) Tangible fixed assets and depreciation<br />
Freehold land and buildings, and the building component of owner-occupied leasehold properties are valued<br />
every three years by independent valuers. In the intervening years the Group reviews the carrying values and<br />
adjustment is made where there has been a material change. In arriving at the valuation of land and buildings,<br />
assumptions and economic estimates have to be made.<br />
Management determines the estimated useful lives and related depreciation charges for the Group’s tangible<br />
fixed assets. Management will revise the depreciation charge where useful lives are different to previously<br />
estimated, or it will write-off or write-down technically obsolete or non-strategic assets that have been<br />
abandoned or sold.<br />
iv) Income taxes<br />
The Group is subject to income taxes in several jurisdictions. Significant judgement is required in<br />
determining the worldwide provision for income taxes.There are many transactions and calculations for<br />
which the ultimate tax determination is uncertain during the ordinary course of business.Where the final<br />
tax outcome of these matters is different from the amounts that were initially recorded, such differences will<br />
impact the income tax and deferred tax provisions in the period in which such determination is made.<br />
Recognition of deferred tax assets, which principally relate to tax losses, depends on the management’s<br />
expectation of future taxable profit that will be available against which tax losses can be utilized.The<br />
outcome of their actual utilization may be different.<br />
MANDARIN ORIENTAL INTERNATIONAL LIMITED