HUTCHISON PORT HOLDINGS TRUST 152 NOTES TO THE FINANCIAL STATEMENTS 2 Basis of preparation and material accounting policy information (Continued) (x) Foreign exchange (Continued) Exchange diff erences arising from translation of inter-company loan balances between Group entities are recognised in other comprehensive income and accumulated under the heading of exchange reserve when such loans form part of the Group’s net investment in a foreign entity. On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, a disposal involving loss of joint control over a joint venture that includes a foreign operation, or a disposal involving loss of significant influence over an associated company that includes a foreign operation), all of the exchange gains or losses accumulated in exchange reserve in respect of that operation attributable to the owners of the company are transferred out of the exchange reserve and are recognised in the income statement. In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange diff erences is re-attributed to non-controlling interests and is not recognised in the income statement. For all other partial disposals (i.e. partial disposals of associated companies or joint ventures that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated exchange diff erences is transferred out of the exchange reserve and is recognised in the income statement. All other exchange diff erences are recognised in the income statement. (y) Distributions to the Trust’s unitholders Distributions to the Trust’s unitholders are recorded in equity in the period in which they are approved for payment. (z) Leases 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 control the use of an identifi ed asset for a period of time in exchange for consideration. Such determination is made on an evaluation of the substance of the arrangement, regardless of whether the arrangements take the legal form of a lease. (i) Assets leased to the Group Leases are initially recognised as a right-of-use asset and corresponding liability at the date of which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and fi nance cost. The fi nance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. Assets leased to the Group and the corresponding liabilities are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: - fi xed payments (including in-substance fi xed payments), less any lease incentives receivable; - variable lease payments that are based on an index or a rate; and - payments of penalties for terminating the lease, if the lease term refl ects the Group, as a lessee, exercising an option to terminate the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be determined, or the incremental borrowing rate of the respective entities. Right-of-use assets are measured at cost comprising the following: - the amount of the initial measurement of lease liability; - any lease payments made at or before the commencement date, less any lease incentive received;
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