Huawei 2014 Annual Report Download - page 68

66 Huawei Investment & Holding Co., Ltd. 2014 Annual Report
When the Group's share of losses equals or
exceeds its interest in the associate or the joint
venture, the Group's interest is reduced to nil
and recognition of further losses is discontinued
except to the extent that the Group has incurred
legal or constructive obligations or made
payments on behalf of the investee. For this
purpose, the Group's interest is the carrying
amount of the investment under the equity
method together with the Group's long-term
interests that in substance form part of the
Group's net investment in the associate or the
joint venture.
Unrealised profits and losses resulting from
transactions between the Group and its
associates and joint ventures are eliminated to
the extent of the Group's interest in the investee,
except where unrealised losses provide evidence
of an impairment of the asset transferred, in
which case they are recognised immediately in
profit or loss.
If an investment in an associate becomes an
investment in a joint venture or vice versa,
retained interest is not remeasured. Instead, the
investment continues to be accounted for under
the equity method.
In other cases, when the Group ceases to have
significant influence over an associate or joint
control over a joint venture, it is accounted for as
a disposal of the entire interest in that investee,
with a resulting gain or loss being recognised in
profit or loss. Any interest retained in that former
investee at the date when significant influence or
joint control is lost is recognised at fair value and
this amount is regarded as the fair value on initial
recognition of a financial asset (see note 1(n)).
(g) Investment property
Investment properties are land and/or buildings
which are owned or held under a leasehold
interest (see note 1(k)) to earn rental income and/
or for capital appreciation.
Investment properties are stated at cost less
accumulated depreciation (see note 1(h)(iii)) and
impairment losses (see note 1(l)). Depreciation
is calculated to write off the cost of items of
investment property, less their estimated residual
value, if any, using the straight line method
over their estimated useful lives. Rental income
from investment properties is accounted for as
described in note 1(s)(ii).
(h) Other property, plant and equipment
i) Recognition and measurement
Items of property, plant and equipment are
stated at cost less accumulated depreciation
and impairment losses (see note 1(l)). Cost
includes expenditure that is directly attributable
to the acquisition of the assets. The cost of
self-constructed items of property, plant and
equipment includes the cost of materials, direct
labour, the initial estimate, where relevant, of
the costs of dismantling and removing the items
and restoring the site on which they are located,
and an appropriate proportion of production
overheads and borrowing costs (see note 1(u)).
Construction in progress is transferred to other
property, plant and equipment when it is ready
for its intended use.
Gains or losses arising from the retirement
or disposal of an item of property, plant and
equipment are determined as the difference
between the net disposal proceeds and the
carrying amount of the item and are recognised
in profit or loss on the date of retirement or
disposal.
ii) Subsequent costs
The cost of replacing part of an item of property,
plant and equipment is recognised in the carrying
amount of the item if it is probable that the
future economic benefits embodied within the
part will flow to the Group and its cost can be
measured reliably. The carrying amount of the