Annual Report - QuamIR

Notes to the Consolidated Financial Statements (Continued)
2 Summary of significant accounting policies (Continued)
2.6 Investment properties (Continued)
Subsequently expenditure is included in the asset’s carrying
amount only when it is probable that future economic benefits
associated with the asset will flow to the Group and the cost
of the asset can be measured reliably. All other repairs and
maintenance costs are expensed in the consolidated income
statement during the financial period in which they are incurred.
2
2.6
Changes in fair values are recorded as part of a valuation gain
or loss in fair value adjustments on investment properties in
consolidated income statement.
2.7 Prepaid land lease payments
Prepaid land lease payments represent prepayments for
leasehold land held under operating leases, which are stated at
cost and subsequently are amortised in the consolidated income
statement on a straight-line basis over the period of the lease
or when there is impairment, the impairment is expensed in the
consolidated income statement. Upon obtaining the land use
right certificates, the costs paid for land use rights are transferred
to prepaid land lease payments. During the course of the
properties development, the amortisation is included as part of
the costs of the properties under development.
2.8 Completed properties held for sale
Properties held for sale are initially measured at the carrying
amount of the property at the date of reclassification from
properties under development. Properties remaining unsold
at the end of the year are stated at the lower of cost and net
realisable value.
2.7
2.8
Cost comprises development costs attributable to the unsold
properties.
Net realisable value represents the management’s estimated
selling price based on prevailing market conditions less costs to
be incurred in selling the property.
The Company transfers a property from investment property to
inventories/properties held for sale when and only when there is
a change in use, evidenced by commencement of development
with a view to sale. The deemed cost of the properties held for
sale transferred from investment property is the fair value of the
property at the date of change in use.
92 HKC (Holdings) Limited • Annual Report 2011