Urban Renewal Authority 2018-19 Annual Report

138 (expressed in Hong Kong Dollars) NOTES TO THE FINANCIAL STATEMENTS 2. Significant accounting policies (Continued) (q) Translation of foreign currencies (i) Functional and presentation currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Hong Kong Dollars, which is the Group’s presentation currency. (ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. (r) Joint development projects The arrangements entered into by the Group with property developers for redevelopment projects are considered to be joint development and are accounted for in accordance with the terms of the development agreements. The Group’s share of income earned from such development is recognised in profit or loss in accordance with the bases set out in Notes 2(e)(ii) and (iii). Where property is received by the Group as its share of distribution of assets from joint development projects, such property is recorded within non-current assets at its fair value at the time when agreement is reached or, if a decision is taken for it to be disposed of, at the lower of this value and net realisable value within current assets. (s) Cash and cash equivalents Cash and cash equivalents comprise cash and bank balances and deposits held at call with banks with original maturities of three months or less. (t) Employee benefits Salaries and annual leave are accrued and recognised as an expense in the year in which the associated services are rendered by the employees of the Group. The Group operates defined contribution schemes and pays contributions to scheme administrators on a mandatory or voluntary basis. The contributions are recognised as an expense when they are due. (u) Related parties (i) A person, or a close member of that person’s family, is related to the Group if that person: (1) has control or joint control over the Group; (2) has significant influence over the Group; or (3) is a member of the key management personnel of the Group or the Group’s parent.