Page 82 - Annual Report

HONG KONG ACADEMY OF MEDICINE HONG KONG ACADEMY OF MEDICINE
香 香港醫學專科學院
院
學
醫
港
學
科
專
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
1. STATUS OF THE ACADEMY
The Academy was established as a body corporate under the Hong Kong Academy of Medicine
Ordinance on 1 August 1992. The principal activities of the Academy are to promote and advance the
science of medicine by education and exchange of information as well as to improve the standard of
local health care. The Academy has its registered office and principal place of business at 99 Wong
Chuk Hang Road, Aberdeen, Hong Kong.
2. BASIS OF PREPARATION AND MATERIAL ACCOUNTING POLICY INFORMATION
a) Statement of compliance
These financial statements have been prepared in accordance with all applicable HKFRS
Accounting Standards (“HKFRSs”), which collective term includes all applicable Hong Kong
Financial Reporting Standards, Hong Kong Accounting Standards (“HKASs”) and
Interpretations issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”)
and accounting principles generally accepted in Hong Kong. Material accounting policy
information adopted by the Academy and its structured entity (together referred to as the Group”)
is set out below.
The HKICPA has issued certain amendments to HKFRSs which are mandatorily effective or
available for early adoption for the current accounting period of the Group. Note 4 provides
information on any changes in accounting policies resulting from initial application of these
developments to the extent that they are relevant to the Group for the current accounting period
reflected in these consolidated financial statements.
b) Basis of preparation of the financial statements
The consolidated financial statements for the year ended 31 December 2024 comprise the
Academy and The Hong Kong Academy of Medicine Foundation Fund which is a structured
entity of the Academy.
The measurement basis used in the preparation of the consolidated financial statements is the
historical cost basis except that the following assets are stated at their fair value as explained in
the accounting policies set out below:
- financial instruments classified as investments in equity instruments designated at fair
value through other comprehensive income (see note 2(h));
The preparation of consolidated financial statements in conformity with HKFRSs requires
management to make judgements, estimates and assumptions that affect the application of
policies and reported amounts of assets, liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and various other factors that are
believed to be reasonable under the circumstances, the results of which form the basis of
making the judgements about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised if the revision
affects only that period, or in the period of the revision and future periods if the revision affects
both current and future periods.
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80 HKAM Annual Report 2025
香 香港醫學專科學院
港
學
醫
專
院
學
科
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2. BASIS OF PREPARATION AND MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
b) Basis of preparation of the financial statements (Continued)
Judgements made by management in the application of HKFRSs that have significant effect on
the consolidated financial statements and major sources of estimation uncertainty are discussed
in note 20.
c) Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Academy and
the structured entity controlled by the Academy. Control is achieved when the Academy:
 has power over the investee;
 is exposed, or has rights, to variable returns from its involvement with the investee; and
 has the ability to use its power to affect its returns.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control listed above.
When the Group has less than a majority of the voting rights of an investee, it has power over
the investee when the voting rights are sufficient to give it the practical ability to direct the
relevant activities of the investee unilaterally. The Group considers all relevant facts and
circumstances in assessing whether or not the Group’s voting rights in an investee are sufficient
to give it power, including:
 the size of the Group’s holding of voting rights relative to the size and dispersion of
holdings of the other vote holders;
 potential voting rights held by the Group, other vote holders or other parties;
 rights arising from other contractual arrangements; and
 any additional facts and circumstances that indicate that the Group has, or does not have,
the current ability to direct the relevant activities at the time that decisions need to be
made, including voting patterns at previous members’ meetings.
Consolidation of a structured entity begins when the Group obtains control over the structured
entity and ceases when the Group loses control of the structured entity. Specifically, income and
expenses of a structured entity acquired or disposed of during the year are included in the
consolidated statement of profit or loss from the date the Group gains control until the date when
the Group ceases to control the structured entity.
When necessary, adjustments are made to the consolidated financial statements of structured
entity to bring its accounting policies in line with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated in full on consolidation.