2
BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES CONTINUED¡
(m) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. At the end of the reporting period subsequent to initial recognition, loans and receivables are carried at
amortised cost using the e
ective interest method less impairment. Interest calculated using the e
ective interest method is
recognised in the income statement.
(n) Trade and other receivables
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the
e
ective interest method, less provision for impairment. Appropriate allowances for estimated irrecoverable amounts are
recognised in the income statement when there is objective evidence that the asset is impaired.
(o) Inventories
Inventories consist mainly of replacement parts and are stated at the lower of cost and net realisable value. Cost is
calculated on the weighted average basis.
(p) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits with maturity less than three months, and bank
overdrafts, excluding secured bank balances, if any.
(q) Borrowings and borrowing costs
The borrowings are initially measured at fair value, net of transaction costs, and are subsequently carried at amortised
cost. Any di
erence between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is
recognised over the period of the borrowings using the e
ective interest method.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that
necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets,
until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised in
the income statement in the period in which they are incurred.
(r) Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently measured at amortised cost using the
e
ective interest method.
(s) Provisions
Provisions are recognised when it is probable that an outflow of economic benefits will be required to settle a present
obligation as a result of past events and a reliable estimate can be made of the amount of the obligation.
Notes to the
Financial Statements
081
ANNUAL REPORT 2015
HUTCHISON PORT HOLDINGS TRUST