Cathay Pacific 2004 Annual Report Download - page 37

Download and view the complete annual report

Please find page 37 of the 2004 Cathay Pacific annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 77

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77

Cathay Pacific Airways Limited 2004 Annual Report 33
Principal Accounting Policies
1. BASIS OF ACCOUNTING
The accounts have been prepared in accordance
with all applicable Hong Kong Financial Reporting
Standards (which include all applicable Hong
Kong Accounting Standards (“HKAS”),
Hong Kong Financial Reporting Standards
(“HKFRS”), Statements of Standard Accounting
Practice (“HK SSAP”) and Interpretations) issued
by the Hong Kong Institute of Certified Public
Accountants (“HKICPA”) with the exception of
the recognition of certain exchange differences
as explained in accounting policy 4 below.
These accounts also comply with the requirements
of the Hong Kong Companies Ordinance and the
applicable disclosure provisions of the Listing
Rules of The Stock Exchange of Hong Kong
Limited (the “Stock Exchange”).
The measurement basis used is historical cost
modified by the revaluation of investments as
explained in accounting policies 8, 10 and
13 below.
HKICPA has issued new and revised standards
(HKAS and HKFRS) which are effective for
accounting periods beginning on or after 1st
January 2005. The Group has decided not to early
adopt these new standards in its financial
statements for the year ended 31st December
2004 except for HKAS 24 “Related Party
Disclosures”. The Group is in the process of
making an assessment on the impact of the new
standards and has so far concluded that the
adoption of them will not have a significant
impact on its results of operations and financial
position. The Group will continue with the
assessment of the impact of the other new
standards and significant changes may be
identified as a result.
2. BASIS OF CONSOLIDATION
The consolidated accounts incorporate the
accounts of the Company and its subsidiary
companies made up to 31st December together
with the Group’s share of the results and net
assets of its associated companies. Subsidiary
companies are those entities in which the
Group controls the composition of the board
of directors, controls more than half the voting
power or holds more than half of the issued
share capital.
The results of subsidiary companies are included
in the consolidated profit and loss account and
the share attributable to minority interests is
deducted from consolidated profit after tax.
Where interests have been bought or sold during
the year only those results relating to the period
of ownership are included in the accounts.
Goodwill arising on consolidation represents the
excess of the cost of subsidiary and associated
companies over the fair value of the Group’s
share of the net assets at the date of acquisition.
Goodwill arising on consolidation is recognised
as an intangible asset and amortised on a straight
line basis over its estimated useful economic life,
not exceeding a period of 20 years.
The carrying amount of goodwill is reviewed
annually and is written down if any impairment
arises. On disposal of a subsidiary or associated
company, the unamortised goodwill is included
in the calculation of any gain or loss.
Minority interests in the consolidated balance
sheet comprise the outside shareholders’
proportion of the net assets of subsidiary
companies.