1993 — Page 57

KUB

九巴服務 日日進步

NOTES ON THE ACCOUNTS

55

1. ACCOUNTING POLICIES

a.

Translation of foreign currencies

Foreign currency loans for purchases of buses and equipment which are hedged by forward foreign exchange contracts are stated at the contracted rates of exchange. With this exception, foreign currency balances at the year end are translated into Hong Kong dollars at the rates of exchange ruling at the balance sheet date and foreign currency transactions during the year are translated into Hong Kong dollars at the rates of exchange ruling at the transaction dates. Differences on foreign currency translation are taken to the profit and loss account.

b.

Spare parts and stores

Spare parts and stores are valued at cost less provision.

Cost includes cost of purchases of materials, direct labour and an appropriate

proportion of overheads.

C.

Depreciation

Depreciation is provided at rates calculated to write off the cost or valuation of fixed assets over their estimated useful lives as follows:-

Land held on long leases with

unexpired term in excess of 50 years

Buildings

Nil

50 years or over the term of the lease

including extension or renewal

period whichever is less

New buses

71% p.a. on cost

Converted or second-hand buses

14% p.a. on cost

Light duty coaches and

other motor vehicles

Plant and machinery, lifts,

fixtures and equipment

Tools

Computer equipment

16% p.a. on cost

14% p.a. on cost

50% p.a. on reducing balance

20% p.a. on cost