2
BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES CONTINUED¡
(w) Foreign exchange
The consolidated financial statements are presented in Hong Kong dollars, which is same as the functional currency of HPH Trust.
Transactions in foreign currencies are converted at the rates of exchange ruling at the transaction dates. Monetary assets
and liabilities are translated at the rates of exchange ruling at the end of the reporting period.
The financial statements of foreign operations (i.e. subsidiary companies, associated companies, joint ventures or branches
whose activities are based or conducted in a country or currency other than those of the Trust) are translated into Hong
Kong dollars using the year end rates of exchange for the statement of financial position items and the average rates of
exchange for the year for the income statement items. Exchange di
erences are recognised in other comprehensive income
and accumulated under the heading of exchange reserve. Exchange di
erences arising from foreign currency borrowings
and other currency instruments designated as hedges of such overseas investments, are recognised in other comprehensive
income and accumulated under the heading of exchange reserve.
Exchange di
erences arising from translation of inter-company loan balances between Group entities are recognised in
other comprehensive income and accumulated under the heading of exchange reserve when such loans form part of the
Group’s net investment in a foreign entity. On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest
in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, a disposal
involving loss of joint control over a joint venture that includes a foreign operation, or a disposal involving loss of significant
influence over an associated company that includes a foreign operation), all of the exchange gains or losses accumulated
in exchange reserve in respect of that operation attributable to the owners of the Company are transferred out of the
exchange reserve and are recognised in the income statement.
In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary,
the proportionate share of accumulated exchange di
erences is re-attributed to non-controlling interests and is not
recognised in the income statement. For all other partial disposals (i.e. partial disposals of associated companies or
joint ventures that do not result in the Group losing significant influence or joint control), the proportionate share of the
accumulated exchange di
erences is transferred out of the exchange reserve and is recognised in the income statement.
All other exchange di
erences are recognised in the income statement.
(x) Distributions to the Trust’s unitholders
Distributions to the Trust’s unitholders are recorded in equity in the period in which they are approved for payment.
(y) Operating leases
Leases in which a significant portion of the risks and rewards of ownership of assets remains with the leasing company
are accounted for as operating leases. Payments made/income received under operating leases net of any incentives
received from/provided to the leasing company are charged/credited to the income statement on a straight-line basis
over the lease periods.
(z) Revenue and other income recognition
Revenue is recognised:
(i) for ports and related services and transportation and logistics solutions, when the service is rendered; and
(ii) for management and service fee income and system development and support fees, when the service is rendered.
Interest income is recognised on a time proportion basis using the e
ective interest method.
Notes to the
Financial Statements
083
ANNUAL REPORT 2015
HUTCHISON PORT HOLDINGS TRUST
