0175 Geely Automobile Holdings Limited Annual Report 2011

Annual Report 2011Geely Automobile Holdings LimitedNOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTSFor the year ended 31 December 20115. Significant Accounting Policies (Continued)(p)Government grantsGrants from the government are recognised at their fair value where there is a reasonable assurance thatthe grant will be received and the Group will comply with all attached conditions. Government grants relatingto income are deferred and recognised in the consolidated income statement over the period necessaryto match them with the costs that they are intended to compensate.The government grants relating to the purchase of prepaid land leases, intangible assets and property,plant and equipment for the cost of an asset are deducted from the carrying amount of the asset andconsequently are effectively recognised in profit or loss over the useful life of the assets by way of reduceddepreciation and amortisation expenses (note 3).(q)Related partiesA party is considered to be related to the Group if:(a)the party, is a person or a close member of that person’s family and that person,(i)(ii)(iii)has control or joint control over the Group;has significant influence over the Group; oris a member of the key management personnel of the Group or of a parent of the Group;or(b)the party is an entity where any of the following conditions applies:(i)(ii)(iii)(iv)(v)(vi)(vii)the entity and the Group are members of the same group;one entity is an associate or joint venture of the other entity (or of a parent, subsidiary orfellow subsidiary of the other entity);the entity and the Group are joint ventures of the same third party;one entity is a joint venture of a third entity and the other entity is an associate of the thirdentity;the entity is a post-employment benefit plan for the benefit of employees of either the Groupor an entity related to the Group;the entity is controlled or jointly controlled by a person identified in (a); anda person identified in (a)(i) has significant influence over the entity or is a member of the keymanagement personnel of the entity (or of a parent of the entity).77