Huawei 2007 Annual Report Download - page 41

FINANCIAL REPORT
Reporting Entity
Huawei Technologies Co., Ltd. (the “Company”) is a
company domiciled in Shenzhen in the People’s Republic
of China (the “PRC”).The consolidated nancial statements
of the Company and its subsidiaries (“the Group”) for the
year ended 31 December 2007 comprise the Company
and its subsidiaries and the Group’s interest in associates.
The Group’s activities involve research and development,
production and sale of telecommunications equipment
and provision of related services.
Revenue Recognition Policy
Provided it is probable that the economic benets will ow to the
Group and the revenue and costs, if applicable, can be measured
reliably, revenue is recognised in the consolidated income
statement as follows:
i) Sale of goods and services rendered
Revenue from sales of goods is recognized when the
signicant risks and rewards of ownership of goods have
been transferred to the buyer. Revenue from provision of
services is recognised at the time when the services are
provided. No revenue is recognized if there are signicant
uncertainties regarding the recovery of the consideration
due, associated costs or the possible return of goods.
Revenue excludes value added tax or other sales taxes and
is after deduction of any trade discounts.
ii) Construction Revenue
When the outcome of a construction contract can be estimated
reliably, revenue from a xed price contract is recognised using
the percentage of completion method, measured by reference to
the percentage of contract costs incurred to date to estimate total
contract costs for the contract; and
When the outcome of a construction contract cannot be
estimated reliably, revenue is recognized only to the extent of
contract costs incurred that it is probable will be recoverable.
iii) Rental income from operating leases
Rental income receivable under operating leases is recognized
in the consolidated income statement in equal installments
over the periods covered by the lease term, except where an
alternative basis is more representative of the pattern of benets
to be derived from the use of the leased asset. Lease incentives
granted are recognized in the consolidated income statement as
an integral part of the aggregate net lease payments receivable.
Contingent rentals are recognized as income in the accounting
period in which they are earned.
Property, plant and equipment
Buildings Machinery, Motor Construction Investment Decoration Total
electronic Vehicles in progress property and Leasehold
equipment improvements
and other
USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000
Cost
At 31 December 2006 372,244 817,258 43,850 28,251 52,476 191,635 1,505,715
At 31 December 2007 398,497 946,148 52,281 46,483 59,427 212,780 1,715,615
Depreciation and impairment loss
At 31 December 2006 50,830 440,400 27,433 - 13,258 83,640 615,561
At 31 December 2007 76,138 568,302 31,871 - 20,322 150,160 846,794
Carrying amounts
At 31 December 2006 321,414 376,859 16,417 28,251 39,218 107,995 890,154
At 31 December 2007 322,358 377,846 20,409 46,483 39,105 62,620 868,822
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