Cathay Pacific 2000 Annual Report Download - page 39

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CATHAY PACIFIC AIRWAYS LIMITED ANNUAL REPORT 2000 37
7. Intangible assets
Intangible assets comprise goodwill and expenditure on computer system development. The
accounting policy for goodwill is outlined in accounting policy 2 on page 34.
In prior years, expenditure on computer system development which gives rise to economic
benefits was capitalised as part of fixed assets. This expenditure has been re-classified as an
intangible asset in accordance with the new HK SSAP 29 “Intangible Assets” and is being
amortised on a straight line basis over its useful life not exceeding a period of four years. This
change has no impact on the profit and loss account of the Group.
8. Investments
Long-term investments are stated at fair value and any change in fair value is recognised in the
investment revaluation reserve. On disposal or if there is evidence that the investment is
impaired, the relevant cumulative gain or loss on the investment is transferred from the
investment revaluation reserve to the profit and loss account.
9. Stock
Stock held for consumption is valued at weighted average cost, less any applicable allowance for
obsolescence. Stock held for disposal is stated at the lower of cost and net realisable value. Net
realisable value represents estimated resale price.
10. Funds with investment managers and other liquid investments
Funds with investment managers and other liquid investments are marked to market and any gain
or loss arising from their revaluation is taken to the profit and loss account.
Cash deposits and notes placed in respect of certain leasing and financing arrangements are
stated at cost while other investments purchased to meet future leasing obligation repayments
are stated at amortised cost.
11. Fuel price derivatives
The Group uses fuel derivatives to reduce its exposure to fluctuating fuel costs. Gains and losses
on these instruments are recognised as a component of fuel expense during the period the
related fuel is used.
12. Deferred taxation
Provision is made for deferred taxation using the liability method for all material timing differences
except where it is considered probable that no liability will arise in the foreseeable future.
In addition, where initial cash benefits have been received in respect of certain lease
arrangements, provision is made for the future obligation to make taxation payments on behalf of
the lessors.
Principal Accounting Policies