2014 — Page 63

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

1

SIGNIFICANT ACCOUNTING POLICIES (Continued)

(r)

Revenue recognition

(s)

Revenue is measured at the fair value of the consideration received or receivable. Provided it is probable that the economic benefits will flow to the Group and the revenue and costs, if applicable, can be measured reliably, revenue is recognised in profit or loss as follows:

(i)

(ii)

(iii)

Sale of properties

Revenue arising from the sale of properties held for sale is recognised upon the later of the signing of the sale and purchase agreement and the completion of the properties, which is taken to be the point in time when the risks and rewards of ownership of the property have passed to the buyer. Deposits and instalments received on properties sold prior to the date of revenue recognition are included in the statement of financial position under deposits received.

Rental income from operating leases

Rental income receivable under operating leases is recognised in profit or loss in equal instalments over the periods covered by the lease term, except where an alternative basis is more representative of the pattern of benefits to be derived from the use of the leased asset. Lease incentives granted are recognised in profit or loss as an integral part of the aggregate net lease payments receivable. Contingent rentals are recognised as income in the accounting period in which they are earned.

Sale of goods

Revenue is recognised when goods are delivered at the customers' premises which is taken to be the point in time when the customers have accepted the goods and the related risks and rewards of ownership.

(iv)

Ferry operations and related services

(v)

Revenue relating to ferry operations is recognised when the relevant ferry services are provided.

Travel business

Revenue arising from the travel business is recognised on the completion date of the tours or when the relevant services are provided.

(vi)

Interest income

Interest income is recognised as it accrues using the effective interest method.

(vii)

Dividends

Dividend income from listed investments is recognised when the share price of the investment goes ex-

dividend.

Translation of foreign currencies

Foreign currency transactions during the year are translated at the foreign exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rates ruling at the end of the reporting period. Exchange gains and losses are recognised in profit or loss.

Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the foreign exchange rates ruling at the transaction dates.

Hong Kong Ferry (Holdings) Company Limited Annual Report 2014

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