United Energy Group Limited - HKExnews

Annual Report 2009
Notes to the Financial Statements
For the nine months ended 31 December 2009
3. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(n) Trade and other receivables (Continued)
Impairment losses are reversed in subsequent periods and recognised in the consolidation profit or loss
when an increase in the receivables’ recoverable amount can be related objectively to an event occurring
after the impairment was recognised, subject to the restriction that the carrying amount of the receivables
at the date the impairment is reversed shall not exceed what the amortised cost would have been had the
impairment not been recognised.
(o)
Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents represent cash at bank and on
hand, demand deposits with banks and other financial institutions, and short-term highly liquid investments
which are readily convertible into known amounts of cash and subject to an insignificant risk of change
in value. Bank overdrafts which are repayable on demand and form an integral part of the Group’s cash
management are also included as a component of cash and cash equivalents.
(p)
Financial liabilities and equity instruments
Financial liabilities and equity instruments are classified according to the substance of the contractual
arrangements entered into and the definitions of a financial liability and an equity instrument under
HKFRSs. An equity instrument is any contract that evidences a residual interest in the assets of the Group
after deducting all of its liabilities. The accounting policies adopted for specific financial liabilities and equity
instruments are set out below.
(q)
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently
measured at amortised cost using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement
of the liability for at least 12 months after the reporting period.
(r)
Trade and other payables
Trade and other payables are stated initially at their fair value and subsequently measured at amortised
cost using the effective interest method unless the effect of discounting would be immaterial, in which case
they are stated at cost.
(s)
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue
costs.
43