Page 133 - Urban Renewal Authority 2023-24 Annual Report

2. Material accounting policies (Continued)

(p) Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of an asset
that necessarily takes a substantial period of time to get ready for its intended use or sale are
capitalised as part of the cost of that asset.

Other borrowing costs are charged to profit or loss in the period in which they are incurred.

(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.

URA ANNUAL REPORT 2023-24 131