CPA Annual Report : CPA Annual report 2012
effective for annual periods beginning on or a er 1 July 2012. e application of the amendments does not have any significant impact on the Trust Fund. "Annual Improvements 2009-2011 Cycle" sets out a collection of amendments to HKFRSs which make necessary, but non-urgent, amendments to HKFRSs that will not be included as part of another major project. e amendments, among others, clarify the requirements for comparative information, the classification of servicing equipment and the income tax consequences of distributions to holders of an equity instrument and of transaction costs of an equity transaction. e amendments are effective for annual periods beginning on or a er 1 January 2013. e application of the amendments does not have any significant impact on the Trust Fund. c. Financial instruments Financial assets and financial liabilities are recognized in the statement of financial position when the Trust Fund becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value and transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. e Trust Fund's financial assets, including other receivables and bank balances, are subsequently measured at amortized cost using the effective interest method, less identified impairment charges (see note 2d) as the assets are held within a business model whose objective is to hold assets in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specific dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial liabilities include the amount due to the Institute which is subsequently measured at amortized cost using the effective interest method. d. Impairment of nancial assets e Trust Fund recognizes charges for impaired financial assets promptly where there is objective evidence that impairment of financial assets has occurred. e impairment of financial assets carried at amortized cost is measured as the difference between the financial assets' carrying amount and the present value of estimated future cash flows discounted at the financial assets' original effective interest rate. Impairment charges are assessed individually for significant financial assets. e carrying amount of the financial assets is reduced through the use of the financial asset impairment charges account. Changes in the carrying amount of the financial asset impairment charges account are recognized in surplus or deficit. When the financial asset is considered uncollectible, it is written off against the financial asset impairment charges account. If, in a subsequent period, the amount of an impairment charge decreases and the decrease can be related objectively to an event occurring a er the impairment was recognized, the previously recognized impairment charge is reversed by reducing the financial asset impairment charges account, subject to a restriction that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized. e amount of any reversal is recognized in surplus or deficit.