Hengdeli Holdings Limited - The Standard Finance

Notes to the FiNaNcial statemeNts
(Expressed in RMB unless otherwise indicated)
1. Significant accounting policieS (Continued)
(e) goodwill (Continued)
On disposal of a cash generating unit or a jointly controlled entity during the year, any attributable amount
of purchased goodwill is included in the calculation of the profit or loss on disposal.
(f) other investments in debt and equity securities
The Group’s and the Company’s policies for investments in debt and equity securities, other than
investments in subsidiaries and jointly controlled entities, are as follows:
Investments in debt and equity securities are initially stated at fair value, which is their transaction price
unless fair value can be more reliably estimated using valuation techniques whose variables include only
data from observable markets. Cost includes attributable transaction costs, except where indicated
otherwise below. These investments are subsequently accounted for as follows, depending on their
classification:
Investments in securities held for trading are classified as current assets. Any attributable transaction costs
are recognised in profit or loss as incurred. At each balance sheet date the fair value is remeasured, with
any resultant gain or loss being recognised in profit or loss. The net gain or loss recognised in profit or
loss does not include any dividends or interest earned on these investments as these are recognised in
accordance with the policies set out in notes 1(u)(iii) and 1 (u)(iv).
Dated debt securities that the Group and/or the Company have the positive ability and intention to hold
to maturity are classified as held-to-maturity securities. Held-to-maturity securities are stated in the balance
sheet at amortised cost less impairment losses (see note 1(k)).
Investments in equity securities that do not have a quoted market price in an active market and whose
fair value cannot be reliably measured are recognised in the balance sheet at cost less impairment losses
(see note 1(k)).
Investments in securities which do not fall into any of the above categories are classified as available-for-
sale securities. At each balance sheet date the fair value is remeasured, with any resultant gain or loss
being recognised in other comprehensive income and accumulated separately in equity in the fair value
reserve, except foreign exchange gains and losses resulting from changes in the amortised cost of monetary
items such as debt securities which are recognised directly in profit or loss. Dividend income from these
investments is recognised in profit or loss in accordance with the policy set out in note 1(u)(iii) and, where
these investments are interest-bearing, interest calculated using the effective interest method is recognised
in profit or loss in accordance with the policy set out in note 1(u)(iv). When these investments are
derecognised or impaired (see note 1(k)), the cumulative gain or loss is reclassified from equity to profit
or loss.
Investments are recognised/derecognised on the date the Group commits to purchase/sell the investments
or they expire.
48 Hengdeli Holdings Limited - Annual Report 2009