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Hong Kong Ferry (Holdings) Company Limited Annual Report 2013
Notes to the Accounts (Continued)
1
SIGNIFICANT ACCOUNTING POLICIES (Continued)
(e)
Associates (Continued)
If an investment in an associate becomes an investment in a joint venture, retained interest is not remeasured.
Instead, the investment continues to be accounted for under the equity method.
In all other cases, when the Group ceases to have significant influence over an associate, it is accounted for as
a disposal of the entire interest in that investee, with a resulting gain or loss being recognised in profit or loss.
Any interest retained in that former investee at the date when significant influence is lost is recognised at fair
value and this amount is regarded as the fair value on initial recognition of a financial asset (see note 1(f)).
In the Company's balance sheet, investments in associates are stated at cost less impairment losses (see note
1(j)), unless classified as held for sale (or included in a disposal group that is classified as held for sale).
(f)
Other investments in debt and equity securities
The Group's and the Company's policies for investments in debt and equity securities, other than investments in
subsidiaries and associates, are as follows:
Investments in debt and equity securities, being those held for non-trading purpose, are classified as available- for-sale securities. Available-for-sale securities are initially stated at fair value, which is their transaction price unless it is determined that the fair value at initial recognition differs from the transaction price and that fair value is evidenced by a quoted price in an active market for an identical asset or liability or based on a valuation technique that uses only data from observable markets. Cost includes attributable transaction costs.
At each balance sheet date the fair value is remeasured, with any resultant gain or loss being recognised in other comprehensive income and accumulated separately in equity in the securities revaluation reserve. As an exception to this, investments in equity securities that do not have a quoted price in an active market for an identical instrument and whose fair value cannot otherwise be reliably measured are recognised in the balance sheet as cost less impairment losses (see note 1(j)). Dividend income from equity securities and interest income from debt securities calculated using the effective interest method are recognised in profit or loss in accordance with the policies set out in notes 1(r)(vii) and 1(r)(vi), respectively. Foreign exchange gains and losses resulting from changes in the amortised cost of debt securities are also recognised in profit or loss.
When the investments are derecognised or impaired (see note 1(j)), the cumulative gain or loss recognised in equity is reclassified to profit or loss. Investments are recognised/derecognised on the date the Group commits to purchase/sell the investments or they expire.
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