HTC 2013 Annual Report Download - page 94

FINANCIAL INFORMATION FINANCIAL INFORMATION
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b. Significant impending changes in
accounting policy resulted from New
IFRSs in issue but not yet effective
Except for the following, the initial application
of the above New IFRSs has not had any
material impact on the Company's accounting
policies:
1. IFRS 9 "Financial Instruments"
Recognition and measurement of financial assets
With regards to financial assets, all recognized
financial assets that are within the scope of IAS
39 "Financial Instruments: Recognition and
Measurement" are subsequently measured at
amortized cost or fair value. Specifically, financial
assets that are held within a business model whose
objective is to collect the contractual cash flows,
and that have contractual cash flows that are solely
payments of principal and interest on the principal
outstanding are generally measured at amortized
cost at the end of subsequent accounting periods.
All other financial assets are measured at their fair
values at the end of reporting period. However,
the Company may make an irrevocable election to
present subsequent changes in the fair value of an
equity investment (that is not held for trading) in
other comprehensive income, with only dividend
income generally recognized in profit or loss.
Recognition and measurement of financial liabilities
As for financial liabilities, the main changes in
the classification and measurement relate to the
subsequent measurement of financial liabilities
designated as at fair value through profit or
loss. The amount of change in the fair value of
such financial liability attributable to changes
in the credit risk of that liability is presented in
other comprehensive income and the remaining
amount of change in the fair value of that liability
is presented in profit or loss, unless the recognition
of the effects of changes in the liability's credit risk
in other comprehensive income would create or
enlarge an accounting mismatch in profit or loss.
Changes in fair value attributable to a financial
liability's credit risk are not subsequently reclassified
to profit or loss. If the above accounting treatment
company only financial statements was
as follows:
As of the date the parent company only financial
statements were authorized for issue, the Company
is continuingly assessing the possible impact that
the application of the above New IFRSs will have
on the Company's financial position and operating
result, and will disclose the relevant impact when
the assessment is complete.
4. CRITICAL ACCOUNTING
JUDGEMENTS AND KEY
SOURCES OF ESTIMATION
UNCERTAINTY
The Company's financial statements for the year ended
December 31, 2013 is its first IFRS financial statements
prepared in accordance with the Regulations Governing
the Preparation of Financial Reports by Securities
Issuers.
Statement of Compliance
The parent company only financial statements have
been prepared in accordance with the Regulations
Governing the Preparation of Financial Reports by
Securities Issuers (the "Regulations").
Basis of Preparation
The parent company only financial statements have
been prepared on the historical cost basis except for
financial instruments that are measured at fair values.
Historical cost is generally based on the fair value of the
consideration given in exchange for assets.
When preparing its parent company only financial
statements, the Company used equity method to
account for its investment in subsidiaries, associates and
jointly controlled entities. In order for the amounts of
the net profit for the year, other comprehensive income
for the year and total equity in the parent company only
financial statements to be the same with the amounts
attributable to the owner of the Company in its
consolidated financial statements, adjustments arising
from the differences in accounting treatment between
would create or enlarge an accounting mismatch
in profit or loss, the Company presents all gains or
losses on that liability in profit or loss.
Hedge accounting
The main changes in hedge accounting amended
the application requirements for hedge accounting
to better reflect the entity's risk management
activities. Compared with IAS 39, the main changes
include: (1) enhancing types of transactions eligible
for hedge accounting, specifically broadening the
risk eligible for hedge accounting of non-financial
items; (2) changing the way hedging derivative
instruments are accounted for to reduce profit
or loss volatility; and (3) replacing retrospective
effectiveness assessment with the principle of
economic relationship between the hedging
instrument and the hedged item.
Effective date
The mandatory effective date of IFRS 9, which was
previously set at January 1, 2015, was removed and
will be reconsidered once the standard is complete
with a new impairment model and finalization
of any limited amendments to classification and
measurement.
2. IFRS 13 "Fair Value Measurement"
IFRS 13 establishes a single source of guidance
for fair value measurements. It defines fair value,
establishes a framework for measuring fair
value, and requires disclosures about fair value
measurements. The disclosure requirements in
IFRS 13 are more extensive than those required in
the current standards. For example, quantitative
and qualitative disclosures based on the three-level
fair value hierarchy currently required for financial
instruments only will be extended by IFRS 13 to
cover all assets and liabilities within its scope.
c. The impact of the application of New
IFRSs and the Regulations Governing
the Preparation of Financial Reports
by Securities Issuers in issue but not
yet effective on the Company's parent
parent company only basis and consolidated basis were
made to investments accounted for by equity method,
share of profit or loss of subsidiaries, associates and
joint ventures, share of other comprehensive income
of subsidiaries, associates and joint ventures and
accumulated earnings, as appropriate, in the parent
company only financial statements.
For readers' convenience, the accompanying parent
company only financial statements have been translated
into English from the original Chinese version prepared
and used in the Republic of China. If inconsistencies
arise between the English version and the Chinese
version or if differences arise in the interpretations
between the two versions, the Chinese version of
the parent company only financial statements shall
prevail. However, the accompanying parent company
only financial statements do not include the English
translation of the additional footnote disclosures that
are not required under accounting principles and
practices generally applied in the Republic of China but
are required by the Securities and Futures Bureau for
their oversight purposes.
Classification of Current and Non-
current Assets and Liabilities
Current assets include:
a. Those assets held primarily for trading purposes;
b. Those assets to be realized within twelve months;
c. Cash and cash equivalents from the balance sheet
date unless the asset is to be used for an exchange
or to settle a liability, or otherwise remains restricted,
at more than twelve months after the balance sheet
date.
Current liabilities are:
a. Obligations incurred for trading purposes;
b. Obligations to be settled within twelve months from
the balance sheet date;
c. An unconditional right to defer settlement of the
liability for at least twelve months after the balance
sheet date.
Aforementioned assets and liabilities that are not
classified as current are classified as non-current.