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F.
E.
Profits and Losses on Disposal of Fixed Assets.
1.
When a fixed asset is sold, or otherwise disposed of, or when compensation is received from insurers in respect of damage to or loss of a fixed asset, then
a)
b)
if the proceeds are no greater than original cost the difference betewen the proceeds and net book value will be deducted from or added to operating costs (B.7 above);
if the proceeds exceed original cost such excess will be treated as capital profit and will not form part of the Scheme of Control net revenue. The difference between original cost and net book value will be deducted from operating costs (B.7 above).
Foreign Exchange Fluctuations.
1.
Realised exchange profits or losses and unrealised exchange losses will be treated in the following manner
:
a)
Fixed Asset Transactions :
i)
Before commissioning
incorporated in the
cost of such asset.
b)
ii)
On commissioning any amounts of foreign currency owing to suppliers will be converted to Hong Kong Dollars at the rate ruling on such date, the resultant exchange adjustments being incorporated in the cost of the asset; any subsequent exchange profit or loss will be treated as stated in b) below.
Other Transactions :
Credited or debited to the profit and loss account concerned.
2.
Unrealised foreign exchange profits will be reflected in the balance sheet concerned through a provision account, and will not form part of the Scheme of Control net revenue.
G.
Interest.
1.
Interest paybale on consumer deposits and bank overdrafts will be charged to operating costs in accordance with B.7.b) above.
2. Interest receivable on bank deposits, including amounts not
subject to Hong Kong taxation, will be offset against operating cost in accordance with B.7.b) above.
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