Cathay Pacific 2015 Annual Report Download - page 102

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Cathay Pacific Airways Limited
100
1. Basis of accounting
The financial statements have been prepared in
accordance with all applicable Hong Kong Financial
Reporting Standards (“HKFRS”) (which include all
applicable Hong Kong Accounting Standards (“HKAS”),
Hong Kong Financial Reporting Standards and
Interpretations) issued by the Hong Kong Institute of
Certified Public Accountants (“HKICPA”), accounting
principles generally accepted in Hong Kong and the
requirements of the Hong Kong Companies Ordinance.
These financial statements also comply with the
applicable disclosure provisions of the Rules Governing
the Listing of Securities (the “Listing Rules”) on The
StockExchangeofHongKongLimited(the“Stock
Exchange”).
The measurement basis used is historical cost
modified by the use of fair value for certain financial
assets and liabilities as explained in accounting policies
8, 9, 10 and 12 below.
The preparation of the financial statements in
conformity with HKFRS requires management to make
certain estimates and assumptions which affect the
amounts of property, plant and equipment, intangible
assets, long-term investments, retirement benefit
obligations and taxation included in the financial
statements. These estimates and assumptions are
continually re-evaluated and are based on
management’s expectations of future events which are
considered to be reasonable.
The HKICPA has issued a number of amendments to
HKFRSs that are first effective for the current
accounting period of the Group and the Company. Of
these, the following developments are relevant to the
Group’s financial statements:
• AmendmentstoHKAS19(2011)“EmployeeBenefits:
DefinedBenefitPlans:EmployeeContributions”
• HKFRSs(Amendments)“AnnualImprovementsto
HKFRSs 2010-2012 Cycle”
• HKFRSs(Amendments)“AnnualImprovementsto
HKFRSs 2011-2013 Cycle”
The Group has not applied any new amendment that is
not yet effective for the current accounting period.
Principal Accounting Policies
TheamendmentstoHKAS19(2011)“Employee
Benefits:DefinedBenefitPlans:Employee
Contributions” applies to contributions from employees
or third parties to defined benefit plans and clarifies the
treatment of such contributions. The amendment
permits (but does not require) contributions from
employees or third parties that are independent of the
number of years of service to be recognised as a
reduction in the service cost in the period in which the
service is rendered, rather than being attributed to
periods of service as a negative benefit. The
amendments have had no significant impact on the
Group’s financial statements.
The improvements to HKFRSs cycles consist of
amendments to existing standards. The amendments
have had no significant impact on the Group’s
financial statements.
2. Basis of consolidation
The consolidated financial statements incorporate the
financial statements of the Company and its
subsidiaries made up to 31st December together with
the Group’s share of the results and net assets of its
associates. Subsidiaries are entities controlled by the
Group. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect
those returns through its power over the entity.
The results of subsidiaries are included in the
consolidated statement of profit or loss and other
comprehensive income. Where interests have been
bought or sold during the year, only those results
relating to the period of control are included in the
financial statements.
Goodwill represents the excess of the cost of
subsidiaries and associates over the fair value of the
Group’s share of the net assets at the date of
acquisition. Goodwill is recognised at cost less
accumulated impairment losses. Goodwill arising from
the acquisition of subsidiaries is allocated to cash-
generating units and is tested annually for impairment.
On disposal of a subsidiary or associate, goodwill is
included in the calculation of any gain or loss.