HSBC 2012 Annual Report Download - page 407

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Overview Operating & Financial Review Corporate Governance Financial Statements Shareholder Information
(ab) Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents include highly liquid investments that
are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in
value. Such investments are normally those with less than three months’ maturity from the date of acquisition.
Cash and cash equivalents include cash and balances at central banks, treasury bills and other eligible bills, loans
and advances to banks, items in the course of collection from or in transmission to other banks, and certificates
of deposit.
(ac) Assets held for sale
Non-current assets and disposal groups (including both the assets and liabilities of the disposal groups) are
classified as held for sale when their carrying amounts will be recovered principally through sale, they are
available for sale in their present condition and their sale is highly probable. Non-current assets held for sale
and disposal groups are measured at the lower of their carrying amount and fair value less cost to sell, except
for those assets and liabilities that are not within the scope of the measurement requirements of IFRS 5
‘Non-current Assets Held for Sale and Discontinued Operations’ such as deferred taxes, financial instruments,
investment properties, insurance contracts and assets and liabilities arising from employee benefits. These are
measured in accordance with the accounting policies described above. Immediately before the initial
classification as held for sale, the carrying amounts of the asset (or assets and liabilities in the disposal group) are
measured in accordance with applicable IFRSs. On subsequent remeasurement of a disposal group, the carrying
amounts of the assets and liabilities noted above that are not within the scope of the measurement requirements
of IFRS 5 are remeasured in accordance with applicable IFRSs before the fair value less costs to sell of the
disposal group is determined.
Income earned and expenses incurred on assets held for sale and liabilities of disposal groups held for sale
continue to be recognised in the appropriate line items in the income statement until the transaction is complete.
Loan impairment charges incurred on assets held for sale continue to be recognised in ‘Loan impairment charges
and other credit risk provisions’ and interest income and expense continue to be recognised in ‘Net interest
income’. Once classified as held for sale, movements arising from the initial measurement or subsequent
remeasurement of the non-current assets (or disposal groups) are recognised in ‘Other operating income’.