Huawei 2012 Annual Report Download - page 57

Consolidated Financial Statements Summary and Notes 54
effective interest method. Dividend income
from listed and unlisted investments is
recognised when the equity holder’s right
to receive payment is established; dividend
income from listed investments is recognised
when the share price of the investment goes
ex-dividend.
Finance costs comprise interest expense on
borrowings, unwinding of the discount on
provisions and impairment losses recognised
on financial assets. Borrowing costs that
are directly attributable to the acquisition,
construction or production of a qualifying
asset which necessarily takes a substantial
period of time to get ready for its intended
use or sale are capitalised as part of the
cost of that asset. Other borrowing costs
are expensed in the period in which they
are incurred.
The capitalisation of borrowing costs as part
of the cost of a qualifying asset commences
when expenditure for the asset is being
incurred, borrowing costs are being incurred
and activities that are necessary to prepare
the asset for its intended use or sale are in
progress. Capitalisation of borrowing costs
is suspended or ceases when substantially
all the activities necessary to prepare the
qualifying asset for its intended use or sale
are interrupted or completed.
Foreign currency gains and losses are
reported on a net basis.
(w) Factoring without recourse
Factoring without recourse constitutes
transfer of trade receivables. The Group
transfers its trade receivables to banks
or financial institutions; the bank or the
financial institutions fully bears the
collection risk without the right to receive
payments from the Group in the event a
loss occurs due to the non-collectibility of
the receivables transferred. The Group’s
customers make payments of the receivables
transferred directly to the bank or the financial
institutions.
In a factoring without recourse, trade
receivables transferred are derecognised
from the consolidated balance sheet. Excess
of carrying amount of trade receivables over
cash received from the banks or financial
institutions arising from factoring without
recourse is included in the “other operating
expenses” of the consolidated income
statement.
(x) Non-current assets held for sale
A non-current asset (or disposal group) is
classified as held for sale if it is highly
probable that its carrying amount will be
recovered through a sale transaction rather
than through continuing use and the asset
(or disposal group) is available for sale in
its present condition. A disposal group is a
group of assets to be disposed of together as
a group in a single transaction, and liabilities
directly associated with those assets that will
be transferred in the transaction.
Immediately before classification as held-for-
sale, the measurement of the non-current
assets (and all individual assets and liabilities
in a disposal group) is brought up-to-date
in accordance with the accounting policies
before the classification. Thereafter, on
initial classification as held for sale until