CPA Annual Report : CPA Annual report 2012
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 Charitable Fund. c. Financial instruments Financial assets are recognized in the statement of financial position when the Charitable Fund becomes a party to the contractual provisions of the instrument. Financial assets are initially measured at fair value and transaction costs that are directly attributable to the acquisition of financial assets are added to the fair value of the financial assets on initial recognition. e Charitable Fund's financial assets, including amount due from the Institute 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. d. Impairment of nancial assets e Charitable 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. e. Derecognition of nancial assets Financial assets are derecognized when the contractual rights to receive the cash flows of the financial assets expire; or where the Charitable Fund transfers the financial assets and either (i) it has transferred substantially all the risks and rewards of ownership of the financial assets or (ii) it has neither transferred nor retained substantially all the risks and rewards of ownership of the financial assets but has not retained control of the financial assets. f. Cash and cash equivalents Cash and cash equivalents comprise cash at bank.