CONFIDENTIAL
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Unrealised exchange gains or losses on forward
foreign exchange contracts outstanding as at the balance
sheet date are brought to account in accordance with current
accounting standards and practice. The unrealised gain or
loss on a forward exchange contract is the foreign currency
amount of the contract multiplied by the difference between
the 'ruling exchange rate' at the balance sheet date and the
contracted forward rate.
*NOTE: 'base exchange rates' for an accounting year are the
exchange rates which were used to translate foreign currency
assets and liabilities into Hong Kong dollars at the end of
the preceding accounting year. These rates are used in bringing foreign currency transactions (not involving a Hong
Kong dollar amount) and foreign currency income and
expenditure to account during the succeeding accounting year.
c. BONDS, NOTES, CERTIFICATES OF DEPOSIT AND CURRENCY OPTIONS
Purchases. Bonds, Notes, Certificates of Deposit and
Currency Options are brought to account at the purchase
price plus brokerage, stamp duty etcetera. Where the cost
includes accrued interest, the interest is debited against
income.
Sales. Sales are brought to account at the dealing price
less any expenses. The difference between the amount
brought to account and the book value is credited to or
charged against income in the Income and Expenditure
Account. When the sales proceeds include accrued interest,
that element is credited to income.
CONFIDENTIAL