TNAG-0753-FCO40-957-Future-of-Hong-Kong-1978 — Page 73

Volume V No. 37

TARGET

Intelligence Report

WEDNESDAY

September 20, 1978

COMPANIES WITH NEW TERRITORIES' LAND AND BUILDINGS TO 'SUFFER*

THE SLINGS AND ARROWS OF THE HONGKONG SOCIETY OF

ACCOUNTANTS' OUTRAGUOUS FORTUNES THIS YEAR

Thanks to the Hongkong Society of Accountants, shareholders of public companies, some of whose assets are in the New Territories, might be in for a bit of a shock when they see the accounts for 1978 almost certain that profits will be down

IDE

since it is

The Hongkong Society of Accountants, in its attempt to be definitive in regard to '

Depreciation Accounting, especially in regard to land and buildings, appears to have taken into its bare hands the political hot potato in Hongkong, to wit! The matter of the New Territories Lease.

Statement 123, issued by the Hongkong Society of Accountants, states, inter alia, that where land is held and the relative lease has an un- expired term of not less than 50 years, including the renewable period, ' it is permissible not to amortise the depreciable amount of land, although it is of a depreciable nature. Buildings have limited useful lives and, are,.

therefore, depreciable'.

Paragraph 19 of the Statement says that where land and buildings in the course of development or re-development are held 'for production, rental or administrative purposes in circumstances where no decision has yet been taken to re-sell the property, depreciation of the buildings

NOT TO BE REPRODUCED IN ANY FORM OR MANNER IN PART OR AS A WHOLE WITHOUT

PRIOR WRITTEN LICENCE OF THE PUBLISHER

Suite 16-C, Harbour View Mansion, 257 Gloucester Road, H.K. Tel: 1-779397 769801

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