ANNUAL REPORT 2025 145 NOTES TO THE FINANCIAL STATEMENTS 2 Basis of preparation and material accounting policy information (Continued) Standards, amendments and interpretations which are not yet eff ective At the date of authorisation of the financial statements, the following new standards, amendments and interpretations were in issue but not yet eff ective and have not been early adopted by the Group: Amendments to HKFRS 9 and HKFRS 7(1) Amendments to the Classification and Measurement of Financial Instruments Amendments to HKFRS 9 and HKFRS 7(1) Contracts Referencing Nature-dependent Electricity HKFRS 1, HKFRS 7, HKFRS 9, HKFRS 10 and HKAS 7(1) Annual Improvements to HKFRSs – Volume 11 HKFRS 18(2) Presentation and Disclosure in Financial Statements HKFRS 19 and amendments to HKFRS 19(2) Subsidiaries without Public Accountability: Disclosures Amendments to Hong Kong Interpretation 5(2) Amendments to Hong Kong Interpretation 5 Presentation of Financial Statements – Classifi cation by the Borrower of a Term Loan that Contains a Repayment on Demand Clause Amendments to HKFRS 10 and HKAS 28(3) Sale or Contribution of Assets Between an Investor and its Associate or Joint Venture (1) Eff ective for annual periods beginning 1 January 2026 (2) Eff ective for annual periods beginning 1 January 2027 (3) New eff ective date to be determined HKFRS 18 will replace HKAS 1 Presentation of Financial Statements, introducing new requirements that will help achieve comparability of the fi nancial performance of similar entities and provide more relevant information and transparency to users. Even though HKFRS 18 will not impact the recognition or measurement of items in the fi nancial statements, its impacts on presentation and disclosure are expected to be pervasive, in particular those related to the statement of fi nancial performance and providing management-defi ned performance measures within the fi nancial statements. The Group will apply the new standard from its mandatory eff ective date of 1 January 2027. Retrospective application is required, and so the comparative information for the fi nancial year ending 31 December 2026 will be restated in accordance with HKFRS 18. Except for the abovementioned changes in the presentation and disclosure in HKFRS 18, the Group is assessing the full impact of the remaining new standards, amendments and interpretations. It is not expected to have material impact on the Group. (a) Basis of consolidation The consolidated fi nancial statements of the Group for the year ended 31 December 2025 include all its direct and indirect subsidiary companies and also incorporate the interest in associated companies, joint operations and joint ventures on the basis set out in Notes 2(c) and 2(d) below. Results of subsidiary companies, associated companies and joint ventures acquired or disposed of during the year are included as from their eff ective dates of acquisition to 31 December 2025 or up to the dates of disposal as the case may be. The acquisition of subsidiary companies is accounted for using the acquisition method. (b) Subsidiary companies A subsidiary company is an entity over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to aff ect those returns through its power over the entity. Subsidiary companies are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. In the unconsolidated fi nancial statements of the holding company, investments in subsidiary companies are carried at cost less provision for impairment in value.
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