Cathay Pacific 2015 Annual Report Download - page 103

Annual Report 2015
101
Principal Accounting Policies
Non-controlling interests in the consolidated
statement of financial position comprise the outside
shareholders’ proportion of the net assets of
subsidiaries and are treated as a part of equity. In the
consolidated statement of profit or loss and other
comprehensive income, non-controlling interests are
disclosed as an allocation of the profit or loss and total
comprehensive income for the year.
In the Company’s statement of financial position,
investments in subsidiaries are stated at cost less any
impairment loss recognised. The results of subsidiaries
are accounted for by the Company on the basis of
dividends received and receivable.
3. Associates
Associates are those companies, not being
subsidiaries, in which the Group holds a substantial
long-term interest in the equity share capital and
over which the Group is in a position to exercise
significant influence.
The consolidated statement of profit or loss and other
comprehensive income includes the Group’s share of
results of associates as reported in their financial
statements made up to dates not earlier than three
months prior to 31st December. In the consolidated
statement of financial position, investments in
associates represent the Group’s share of net assets,
goodwill arising on acquisition of the associates (less
any impairment) and loans to those companies.
In the Company’s statement of financial position,
investments in associates are stated at cost less
any impairment loss recognised and loans to
those companies.
4. Foreign currencies
Foreign currency transactions entered into during the
year are translated into Hong Kong dollars at the market
rates ruling at the relevant transaction dates whilst the
following items are translated at the rates ruling at the
reporting date:
(a) foreign currency denominated financial assets
and liabilities.
(b) assets and liabilities of foreign subsidiaries and
associates.
Exchangedifferencesarisingonthetranslationof
foreign currencies into Hong Kong dollars are reflected
in profit or loss except that:
(a) unrealised exchange differences on foreign
currency denominated financial assets and
liabilities, as described in accounting policies 8, 9
and 10 below, that qualify as effective cash flow
hedge instruments under HKAS 39 “Financial
Instruments: Recognition and Measurement” are
recognised directly in equity via the statement of
changes in equity. These exchange differences are
included in profit or loss as an adjustment to the
hedged item in the same period or periods during
which the hedged item affects profit or loss.
(b) unrealised exchange differences on net investments
in foreign subsidiaries and associates (including
intra-Group balances of an equity nature) and
related long-term liabilities are taken directly
to equity.
5. Property, plant and equipment
Property, plant and equipment is stated at cost less
accumulated depreciation and impairment.
The cost of an item of property, plant and equipment
comprises its purchase price and any directly
attributable costs of bringing the asset to working
condition for its intended use. An acquired (owned and
finance leased) aircraft reflects all components in its
full service potential excluding the maintenance
condition of its landing gear, airframe and engines. The
cost relating to the maintenance element is identified
on acquisition as a separate component and
depreciated till its next major maintenance event.
Expenditureforheavymaintenancevisitsonaircraft,
engine overhauls and landing gear overhauls, is
capitalised at cost and depreciated over the average
expected life between major overhauls, estimated to be
4to10years.Expenditureforengineoverhaulcosts
covered by power-by-hour (fixed rate charged per hour)
maintenance agreements is expensed by hours flown.
Expenditureforothermaintenanceandrepairsis
charged to the profit or loss.