United Energy Group Limited - HKExnews

UNITED ENERGY GROUP LIMITED
Notes to the Financial Statements
For the nine months ended 31 December 2009
3. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(t) Derivative financial instruments
Derivatives are initially recognised and are subsequently measured at fair value. Changes in the fair value
of derivatives that do not qualify for hedge accounting are recognised in the consolidated profit or loss as
they arise.
(u)
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and is recognised when
it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured
reliably.
Revenue from the production of crude oil in which the Group has an interest with other producers is
recognised based on the Group’s working interest and the terms of the relevant production sharing contracts
and on the transfer of significant risks and rewards of ownership, which generally coincides with the time
when the crude oil are delivered and the title has passed to the customers. This generally occurs when
crude oil is physically transferred into an oil tanker, pipe or other delivery mechanism.
Rental income is recognised on a straight-line basis over the lease term.
Property management service fees income is recognised when the services are rendered.
Interest income is recognised on a time-proportion basis using the effective interest method.
(v)
Employee benefits
(i)
Employee leave entitlements
Employee entitlements to annual leave and long service leave are recognised when they accrue to
employees. A provision is made for the estimated liability for annual leave and long service leave as
a result of services rendered by employees up to the end of the reporting period.
Employee entitlements to sick leave and maternity leave are not recognised until the time of
leave.
(ii)
Pension obligations
The Group contributes to defined contribution retirement schemes which are available to all
employees. Contributions to the schemes by the Group and employees are calculated as a percentage
of employees’ basic salaries. The retirement benefit scheme cost charged to consolidated profit or
loss represents contributions payable by the Group to the funds.
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