Page 84 - Annual Report

HONG KONG ACADEMY OF MEDICINE HONG KONG ACADEMY OF MEDICINE
香 香港醫學專科學院 香 香港醫學專科學院
學
專
醫
院
學
學
學
專
醫
港
科
科
港
院
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024 FOR THE YEAR ENDED 31 DECEMBER 2024

2. BASIS OF PREPARATION AND MATERIAL ACCOUNTING POLICY INFORMATION (Continued) 2. BASIS OF PREPARATION AND MATERIAL ACCOUNTING POLICY INFORMATION (Continued)

d) Property, plant and equipment d) Property, plant and equipment (Continued)

Property, plant and equipment are stated at cost less accumulated depreciation and impairment Construction in progress include property, plant and equipment in the course of construction for
losses (see note 2(g)). production, supply or administrative purposes are carried at cost, less any recognised
impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs
 right-of-use assets arising from leases over freehold or leasehold properties where the capitalised in accordance with the Academy’s accounting policy. Such properties, plant and
Group is not the registered owner of the property interest; and equipment are classified to the appropriate categories of property, plant and equipment when
completed and ready for intended use. Depreciation of these assets, on the same basis as other
 items of plant and equipment, including right-of-use assets arising from leases of property assets, commences when the assets are ready for their intended use.
underlying plant and equipment (see note 2(e)).
e) Leases
Historical cost includes expenditure that is directly attributable to the acquisition of the items.
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, contract is, or contains, a lease if the contract conveys the right to control the use of an identified
as appropriate, only when it is probable that future economic benefits associated with the item asset for a period of time in exchange for consideration. Control is conveyed where the
will flow to the Group and the cost of the item can be measured reliably. The carrying amount of customer has both the right to direct the use of the identified asset and to obtain substantially all
the replaced part is derecognised. All other repairs and maintenance are recognised in profit or of the economic benefits from that use.
loss during the financial period in which they are incurred.
As a lessor
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount. When the Group acts as a lessor, it determines at lease inception whether each lease is a
finance lease or an operating lease. A lease is classified as a finance lease if it transfers
Depreciation is calculated to write off the cost of items of property, plant and equipment using substantially all the risks and rewards incidental to the ownership of an underlying assets to the
the straight line method over their estimated useful lives as follows: lessee. If this is not the case, the lease is classified as an operating lease. When a contract
contains lease and non-lease components, the Group allocates the consideration in the contract
Leasehold land and buildings classified as held under finance leases are depreciated over the to each component on a relative stand-alone selling price basis. The rental income from
shorter of the useful life of the buildings or the unexpired terms of the land leases using the operating leases is recognised in accordance with note 2(n). When the Group is an intermediate
straight line method. lessor, the sub-leases are classified as a finance lease or as an operating lease with reference
to the right-of-use asset arising from the head lease. If the head lease is a short-term lease to
Leasehold land and building 25 years which the Group applies the exemption, then the Group classifies the sub-lease as an operating
Computer equipment 5 years lease.
Furnitures and fixtures 5 years
Training & office equipment 5 years f) Inventories
Leasehold improvements 5 years
Inventories are carried at the lower of cost and net recognised value. Cost is calculated using
Where parts of an item of property, plant and equipment have different useful lives, the cost of the weighted average method.
the item is allocated on a reasonable basis between the parts and each part is depreciated
separately. Both the useful life of an asset and its residual value, if any, are reviewed annually. Net recognised value is the estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessary to make the sale.
Gains or losses arising from the retirement or disposal of an item of property, plant and
equipment are determined as the difference between the net disposal proceeds and the carrying When inventories are sold, the carrying amount of those inventories is recognised as an
amount of the item and are recognised in the income and expenditure account on the date of expense in the period in which the related revenue is recognised. The amount of any write-down
retirement or disposal. of inventories to net recognised value and all losses of inventories are recognised as an
expense in the period the write-down or loss occurs. The amount of any reversal of any
write-down of inventories is recognised as a reduction in the amount of inventories recognised
as an expense in the period in which the reversal occurs.

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82 HKAM Annual Report 2025