RAS-1999 — Page 32

ROYAL ASIATIC SOCIETY - HONG KONG BRANCH NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 1999

1. GENERAL

The Society was established as a branch society of the Royal Asiatic Society of Great Britain and Ireland.

The principal activities of the Society are investigation and encouragement of science, literature and the arts in relation to Asia and in particular in relation to Hong Kong and the Far East.

2. ADOPTION OF STATEMENT OF STANDARD ACCOUNTING PRACTICE

In the current year, the Society has adopted Statement of Standard Accounting Practice (SSAP) 24 “Accounting for investments in securities" issued by the Hong Kong Society of Accountants.

SSAP 24 has introduced a new framework for the classification of investments in securities and the adoption of the standard has had a significant effect on the treatment adopted by the Society for its investments in securities. In adopting SSAP 24, the Society has selected the alternative treatment for securities.

Under alternative treatment of SSAP 24, all investments in securities are now carried at fair value and valuation movements are dealt with in investment revaluation reserve. The accounting treatment specified by SSAP 24 has been applied retrospectively - resulting in a decrease in investment revaluation reserve at 1 January 1998 of HK$117, 449, an increase in surplus in 1998 of HK$140,055 and an increase in investment revaluation reserve in the current year of HK$148,848 (1998: a decrease of HK$22,606). Comparative information has been restated to reflect this change in accounting policy.

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