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Notes To The Consolidated Financial Statements
(Expressed in Renminbi)
Annual Report 2011 /
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Significant accounting policies
(continued)
(e) Other investments in debt and equity securities
The Group’s policies for investments in debt and equity securities, other than investments in
subsidiaries and associate, 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 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 consolidated balance sheet at cost less
impairment losses (see note 2(l)).
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 re-measured, 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 2(w)(v) 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 2(w)(vi).
When these investments are derecognised or impaired (see note 2(l)), 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.
(f) Investment properties
Investment properties are land or/and buildings which are owned to earn rental income and/or for
capital appreciation.
Investment properties are stated in the consolidated balance sheet at cost less accumulated
depreciation and impairment losses (see note 2(l)). Depreciation is calculated to write off the cost
less estimated residual value if applicable and is charged to the consolidated income statement on a
straight-line basis over the estimated useful lives ranging from 20 years to 30 years.
Rental income from investment properties is accounted for as described in note 2(w)(iv).
When an item of property, plant and equipment is transferred to investment property following a
change in its use or when an investment property becomes owner-occupied and reclassified as
property, plant and equipment, its costs at the date of reclassification becomes its cost for accounting
purposes.