Page 79 - Annual Report

HONG KONG ACADEMY OF MEDICINE
香 港 醫 學 專 科 學 院
香港醫學專科學院
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2. BASIS OF PREPARATION AND MATERIAL ACCOUNTING POLICY INFORMATION (Continued)

b) Basis of preparation of the financial statements (Continued)

Judgements made by management in the application of HKFRSs that have significant effect on
the consolidated financial statements and major sources of estimation uncertainty are discussed
in note 20.

c) Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Academy and
the structured entity controlled by the Academy. Control is achieved when the Academy:

• has power over the investee;

• is exposed, or has rights, to variable returns from its involvement with the investee; and

• has the ability to use its power to affect its returns.

The Group reassesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control listed above.

When the Group has less than a majority of the voting rights of an investee, it has power over
the investee when the voting rights are sufficient to give it the practical ability to direct the
relevant activities of the investee unilaterally. The Group considers all relevant facts and
circumstances in assessing whether or not the Group’s voting rights in an investee are sufficient
to give it power, including:

• the size of the Group’s holding of voting rights relative to the size and dispersion of
holdings of the other vote holders;

• potential voting rights held by the Group, other vote holders or other parties;

• rights arising from other contractual arrangements; and

• any additional facts and circumstances that indicate that the Group has, or does not have,
the current ability to direct the relevant activities at the time that decisions need to be
made, including voting patterns at previous members’ meetings.

Consolidation of a structured entity begins when the Group obtains control over the structured
entity and ceases when the Group loses control of the structured entity. Specifically, income and
expenses of a structured entity acquired or disposed of during the year are included in the
consolidated statement of profit or loss from the date the Group gains control until the date when
the Group ceases to control the structured entity.

When necessary, adjustments are made to the consolidated financial statements of structured
entity to bring its accounting policies in line with the Group’s accounting policies.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated in full on consolidation.

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香港醫學專科學院 2024 年度報告