Page 90 - 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
專
科
學
港
醫
學
院
科
學
院
專
港
醫
學
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)

h) Other financial assets k) Cash and cash equivalents (Continued)

Investments other than equity investments Cash and cash equivalents are assessed for expected credit losses (ECL) in accordance with
the policy set out in note 2(g).
Non-equity investments held by the Academy are classified as fair value through profit or loss
(FVTPL) when the contractual cash flows of the investment do not represent solely payments of l) Funds managed by the Group
principal and interest. Changes in the fair value of the investment (including interest) are
recognised in profit or loss. i) Foundation fund

Equity investments Funds received which is used exclusively for the establishment and use of the Academy
at such time as the Academy shall direct are accounted for as Foundation fund.
An investment in equity securities is classified as financial assets at FVTPL unless the equity
investment is not held for trading purposes and on initial recognition of the investment the ii) General fund
Academy makes an irrevocable election to designate the investment at fair value through other
comprehensive income (FVTOCI) (non-recycling) such that subsequent changes in fair value The fund balance represents the accumulated surplus of the Foundation after deducting
are recognised in other comprehensive income. Such elections are made on an the amounts transferred to the Academy and is used to finance the general operations of
instrument-by-instrument basis, but may only be made if the investment meets the definition of the Group.
equity from the issuer’s perspective. Where such an election is made, the amount accumulated
in other comprehensive income remains in the fair value reserve (non-recycling) until the m) Provisions and contingent liabilities
investment is disposed of. At the time of disposal, the attributable amount accumulated in the
fair value reserve (non-recycling) is transferred to general fund. It is not recycled through profit Provisions are recognised for liabilities of uncertain timing or amount when the Group has a
or loss. present legal or constructive obligation arising as a result of a past event, it is probable that an
outflow of economic benefits will be required to settle the obligation and a reliable estimate can
Dividends from an investment in equity securities, irrespective of whether classified as at FVTPL be made. Where the time value of money is material, provisions are stated at the present value
or FVTOCI, are recognised in profit or loss as other income in accordance with the policy set out of the expenditure expected to settle the obligation.
in note 2(n).
Where it is not probable that an outflow of economic benefits will be required, or the amount
i) Receivables cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the
probability of outflow of economic benefits is remote. Possible obligations, whose existence will
Receivables are initially recognised at fair value and thereafter stated at amortised cost using only be confirmed by the occurrence or non-occurrence of one or more uncertain future events
the effective interest method, less allowance for impairment of doubtful debts (see note 2(g)(i)), not wholly within the control of the Group are also disclosed as contingent liabilities unless the
except where the receivables are interest-free loans made to related parties without any fixed probability of outflow of economic benefits is remote.
repayment terms or the effect of discounting would be immaterial. In such cases, the
receivables are stated at cost less allowance for impairment of doubtful debts. n) Revenue recognition

Receivables are stated at amoritised cost using the effective interest method less allowance for Revenue from contracts with customers
credit losses (see note 2(g)).
The recognition of revenue from contracts with customers is based on the performance
j) Payables obligations identified in the contracts. Revenue is recognised when (or as) the Group satisfies
as a performance obligation by transferring a promised good or service (i.e. an asset) to a
Payables are initially recognised at fair value and thereafter stated at amortised cost unless the customer who obtains the control of the assets:
effect of discounting would be immaterial, in which case they are stated at cost.
i) Provision of services
k) Cash and cash equivalents Revenue from provision of services is recognised when the services are rendered.

Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks ii) Entrance fees and subscription fees
and other financial institutions, and short-term, highly liquid investments that are readily
convertible into known amounts of cash and which are subject to an insignificant risk of changes Entrance fees are recognised at a point in time, i.e. when the cash is received.
in value, having been within three months of maturity at a acquisition. Subscription fees are recognised on an accrual basis and over time.

17 18

88 HKAM Annual Report 2025