China Communications Services Corporation Limited Annual Report 2015
111
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2015
2. SIGNIFICANT ACCOUNTING POLICIES
(continued)
(k) Leased assets
An arrangement, comprising a transaction or a series of transactions, is or contains a lease if the Group determines
that the arrangement conveys a right to use a specific asset or assets for an agreed period of time in return for a
payment or a series of payments. Such a determination is made based on an evaluation of the substance of the
arrangement and is regardless of whether the arrangement takes the legal form of a lease.
Assets that are held by Group under leases which do not transfer to the Group substantially all the risks and rewards
of ownership are classified as being held under operating leases.
Lease payments made under an operating lease are charged to profit or loss in equal installments over the accounting
periods covered by the lease term, except where an alternative basis is more representative of the pattern of benefits
to be derived from the leased asset. Lease incentives received are recognised in profit or loss as an integral part of the
aggregate net lease payments made. Contingent rentals are charged to profit or loss in the accounting period in
which they are incurred.
(l) Impairment of assets
(i) Impairment of investments in debt and equity securities and receivables
Investments in debt and equity securities classified as available-for-sale securities and other current and non-
current receivables that are stated at amortised cost are reviewed at each end of the reporting period to
determine whether there is objective evidence of impairment. Objective evidence of impairment includes
observable data that comes to the attention of the Group about one or more of the following loss events.
— Significant financial difficulty of the debtor;
— A breach of contract, such as default or delinquency in interest or principal payments;
— It becoming probable that the debtor will enter bankruptcy or other financial reorganisation;
— Significant changes in the technological, market, economic or legal environment that have an adverse
effect on the debtor; and
— A significant or prolonged decline in the fair value of an investment in an equity instrument below its
cost.
