Annual Report - QuamIR
Annual Report - QuamIR Annual Report - QuamIR
Notes to the Consolidated Financial Statements (Continued) 2 Summary of significant accounting policies (Continued) 2.14 Construction contracts (Continued) The Group uses the “percentage of completion method” to determine the appropriate amount to recognise in a given period. The stage of completion is measured by reference to contract costs incurred up to the balance sheet date as a percentage of total estimated costs for each contract. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. They are presented as inventories, prepayments or other assets, depending on their nature. 2 2.14 The Group presents the net contract position for each contract as an asset the gross amount due from customers for contract work for all contracts in progress for which costs incurred plus recognised profits (less recognised losses) exceed progress billings. Progress billings not yet paid by customers and retentions are included within trade and other receivables. The Group presents the net contract position for each contract as a liability when the gross amount due to customers for contract work for all contracts in progress for which progress billings exceed costs incurred plus recognised profits (less recognised losses). 2.15 Financial assets The Group classifies its financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivable and available-for-sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. 2.15 (a) Financial assets at fair value through profit or loss (a) Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are classified as held for trading unless they are designated as hedges. Assets in this category are classified as current assets. 96 HKC (Holdings) Limited • Annual Report 2011
Notes to the Consolidated Financial Statements (Continued) 2 Summary of significant accounting policies (Continued) 2.15 Financial assets (Continued) (b) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than twelve months after the balance sheet date. These are classified as non-current assets. The Group’s loans and receivables comprise “trade and other receivables”, “cash and cash equivalents” and “restricted cash” in the balance sheet. 2 2.15 (b) (c) Available-for-sale financial assets Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of the investment within twelve months of the balance sheet date. (c) Regular purchases and sales of financial assets are recognised on the trade-date – the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the consolidated income statement. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using the effective interest method. Gains or losses arising from changes in fair value of the “financial assets at fair value through profit or loss” category are presented in the consolidated income statement within other income or other and general expenses, in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in the consolidated income statement as part of other income when the Group’s right to receive payments is established. • 97
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Notes to the Consolidated Financial Statements (Continued)<br />
<br />
2 Summary of significant accounting policies (Continued)<br />
2.14 Construction contracts (Continued)<br />
The Group uses the “percentage of completion method” to<br />
determine the appropriate amount to recognise in a given period.<br />
The stage of completion is measured by reference to contract<br />
costs incurred up to the balance sheet date as a percentage of<br />
total estimated costs for each contract. Costs incurred in the<br />
year in connection with future activity on a contract are excluded<br />
from contract costs in determining the stage of completion.<br />
They are presented as inventories, prepayments or other assets,<br />
depending on their nature.<br />
2 <br />
2.14 <br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
The Group presents the net contract position for each contract<br />
as an asset the gross amount due from customers for contract<br />
work for all contracts in progress for which costs incurred plus<br />
recognised profits (less recognised losses) exceed progress<br />
billings. Progress billings not yet paid by customers and<br />
retentions are included within trade and other receivables.<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
The Group presents the net contract position for each contract as<br />
a liability when the gross amount due to customers for contract<br />
work for all contracts in progress for which progress billings<br />
exceed costs incurred plus recognised profits (less recognised<br />
losses).<br />
2.15 Financial assets<br />
The Group classifies its financial assets in the following<br />
categories: financial assets at fair value through profit or loss,<br />
loans and receivable and available-for-sale. The classification<br />
depends on the purpose for which the financial assets were<br />
acquired. Management determines the classification of its<br />
financial assets at initial recognition.<br />
<br />
<br />
<br />
<br />
<br />
2.15 <br />
<br />
<br />
<br />
<br />
<br />
(a)<br />
Financial assets at fair value through profit or<br />
loss<br />
(a)<br />
<br />
<br />
Financial assets at fair value through profit or loss are<br />
<br />
financial assets held for trading. A financial asset is<br />
<br />
classified in this category if acquired principally for the<br />
<br />
purpose of selling in the short term. Derivatives are<br />
<br />
classified as held for trading unless they are designated as<br />
<br />
hedges. Assets in this category are classified as current<br />
<br />
assets.<br />
<br />
96 HKC (Holdings) Limited • <strong>Annual</strong> <strong>Report</strong> 2011