CPA Annual Report : CPA Annual report 2012
e preparation of financial statements in conformity with HKFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group's accounting policies. e estimates and associated assumptions are based on experience and other factors that are considered to be relevant. Actual results may differ from these estimates. e critical accounting estimates and assumptions are summarized below: Depreciation e residual values, useful lives and depreciation method applied in the recognition of depreciation are reviewed, and adjusted if appropriate, at least at the end of each reporting period. In arriving at the depreciation charges, management has applied estimates to the residual values and useful life of each class of assets. Depreciation is provided on a straight- line basis over the useful life of each class of assets. Impairment of receivables e Group assesses at the end of each reporting period whether there is objective evidence that the receivables are impaired. In the assessment process, the Group tests the receivables for impairment in accordance with the Group's accounting policies. Management's judgment and estimates are required to determine whether a receivable is impaired and the appropriate action to recover the receivable. e Group closely monitors the debtors' repayment history, and takes regular follow-up actions to recover amounts overdue. If a receivable is determined to be impaired, the impairment is recognized in the statements of comprehensive income. e Group will continue to follow up recovery for the receivables. ese financial statements have been prepared on a basis consistent with the accounting policies adopted in the 2011 financial statements, except for the first-time early adoption of the new/revised HKFRSs as set out in note 2b to these financial statements. e following HKFRSs issued in prior years, that are not yet effective for the current year but are applicable to the Group, have been early adopted in prior years: HKAS 27 (2011) "Separate Financial Statements" HKFRS 9 "Financial Instruments" HKFRS 10 "Consolidated Financial Statements" HKFRS 12 "Disclosure of Interests in Other Entities" HKFRS 13 "Fair Value Measurement" b. Early adoption of applicable new/revised HKFRSs that were issued during the current year e Institute has issued certain new/revised HKFRSs during the current year that are available for early adoption. Of these, the following new/revised HKFRSs are applicable to these financial statements and early adopted by the Group for the first time: Amendments to HKAS 1 (Revised) "Presentation of Financial Statements -- Presentation of Items of Other Comprehensive Income" HKAS 19 (2011) "Employee Benefits" Annual Improvements Project "Annual Improvements 2009-2011 Cycle"