CHINA SOUTHERN AIRLINES COMPANY LIMITED ANNUAL REPORT 2008(31)

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(f) Other investments in equity securities
The Group’s and the Company’s policies for investments in equity securities, other than investments in subsidiaries, associates and jointly controlled entities, are as follows:
Investments in equity securities are initially stated at cost. Cost includes attributable transaction costs, except where indicated otherwise below. These investments are subsequently accounted for as follows, depending on their classification:
Available-for-sale equity securities are those non-derivative financial assets that are designated as available for sale. At each balance sheet date the fair value is remeasured, with any resultant gain or loss being recognised directly in equity, except foreign exchange gains and losses resulting from changes in the amortised cost of monetary items which are recognised directly in profit or loss. Dividend income from these investments is recognised in accordance with the policy set out in Note 2(v)(iv). When these investments are derecognised or impaired (Note 2(l)), the cumulative gain or loss previously recognised directly in equity is recognised in profit or loss.

 

Notes to the Financial Statements
(Prepared in accordance with International Financial Reporting Standards) (Expressed in Renminbi)

58 ANNUAL REPORT 2008

 

(f) Other investments in equity securities (cont’d) The Group’s other investments in equity securities represent unlisted equity securities of companies established in the
PRC. They do not have a quoted market price in an active market and whose fair value cannot be reliably measured. Accordingly, they are recognised in the balance sheet at cost less impairment losses (Note 2(l)).
Investments are recognised/derecognised on the date the Group commits to purchase/sell the investments or they expire.
(g) Derivative financial instruments
Derivative financial instruments are recognised at fair value. At each balance sheet date the fair value is remeasured. The gain or loss on remeasurement to fair value is charged immediately to profit or loss.
(h)
Property, plant and equipment

(i)
Investment property

Investment properties are land and/or buildings which are owned or held under a leasehold interest (Note 2(j)) to earn rental income and/or for capital appreciation.
Investment properties are stated in the balance sheet at cost, less accumulated depreciation and impairment losses (Note 2(l)). Depreciation is calculated to write off the cost of items of investment property, less their estimated residual value, if any, using the straight line method over their estimated useful lives. Rental income from investment properties is accounted for as described in Note 2(v)(iii).
(i
) Other property, plant and equipment Items of property, plant and equipment are initially stated at cost. The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs of bringing the asset to working condition and location for its intended use and the initial estimate, where relevant, of the costs of dismantling and removing the items and restoring the site on which they are located.
Subsequent to the revaluation of the Group’s property, plant and equipment as at 31 December 1996 (Note 19(d)), which was based on depreciated replacement costs, the Group’s property, plant and equipment are carried at revalued amount, being the fair value at the date of the revaluation less any subsequent accumulated depreciation and impairment losses (Note 2(l)).
Revaluations are performed with sufficient regularity to ensure that the carrying amount of the property, plant and equipment does not differ materially from that which would be determined using fair value at the balance sheet date.
Changes arising on the revaluation of property, plant and equipment are generally dealt with in reserves. The only exceptions are as follows:
　
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