Page 74 - Annual Report

HONG KONG ACADEMY OF MEDICINE
香港醫學專科學院
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

i) Receivables

Receivables are initially recognised at fair value and thereafter stated at amortised cost
using the effective interest method, less allowance for impairment of doubtful debts (see
note 3(g)(i)), except where the receivables are interest-free loans made to related
parties without any fixed repayment terms or the effect of discounting would be
immaterial. In such cases, the receivables are stated at cost less allowance for
impairment of doubtful debts.

Receivables are stated at amoritised cost using the effective interest method less
allowance for credit losses (see note 3(g)).

j) Payables

Payables are initially recognised at fair value and thereafter stated at amortised cost
unless the effect of discounting would be immaterial, in which case they are stated at
cost.

k) Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits with
banks and other financial institutions, and short-term, highly liquid investments that are
readily convertible into known amounts of cash and which are subject to an insignificant
risk of changes in value, having been within three months of maturity at a acquisition.

Cash and cash equivalents are assessed for expected credit losses (ECL) in
accordance with the policy set out in note 3(g).

l) Funds managed by the Group

i) Foundation fund

Funds received which is used exclusively for the establishment and use of the
Academy at such time as the Academy shall direct are accounted for as
Foundation fund.

ii) General fund

The fund balance represents the accumulated surplus of the Foundation after
deducting the amounts transferred to the Academy and is used to finance the
general operations of the Group.

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72 HKAM Annual Report 2021