Hong Kong Institute of Accredited Accounting Technicians Limited ...

Notes
For the year ended 30 June 2006
2. Principal accounting policies (continued)
g. Property and equipment (continued)
Property and equipment are depreciated at rates sufficient
to write off their depreciable amounts over their estimated
useful lives using the straight-line method. Depreciable
amount is the cost of an asset, or other amount
substituted for cost, less its residual value. The residual
values and useful lives of assets are reviewed at each
financial year-end and, if expectations differ from previous
estimates, the changes will be accounted for as a change
in an accounting estimate. If the residual value of an asset
increases to an amount equal to or greater than the
asset’s carrying amount, no depreciation is charged.
The annual depreciation rates adopted are as follows:
Buildings 5%
Leasehold improvements 20%
Furniture and fittings 20%
Equipment 20% – 33 1 / 3 %
Items of a capital nature costing less than HK$1,000 are
recognised as expenses in the year of acquisition.
h. Prepaid land leases expense
Prepaid land leases expense is an up-front payment to
acquire a long-term interest in lessee occupied land. This
payment is stated at cost and amortised over the
remaining term of the lease to the income statement.
i. Inventories
Inventories, representing publications held for sale, are
stated at the lower of cost determined on a first-in, firstout
basis and net realisable value. Cost includes direct
costs of purchases and incidental costs in bringing the
inventories to their present location and condition. Net
realisable value is based on anticipated selling price in the
ordinary course of business less all estimated costs to be
incurred prior to sale.
2.
g.
5%
20%
20%
20% 33 1 /3%
1,000
h.
i.
Annual Report 2005-2006
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