09:17 FIRST MOBILE<08110> - Quarterly Results Announcement (2) HKAS 1 Presentation of Financial Statements HKAS 2 Inventories HKAS 7 Cash Flow Statements HKAS 8 Accounting Policies, Changes in Accounting Estimates and Errors HKAS 10 Events after Balance Sheet Date HKAS 12 Income Taxes HKAS 14 Segment Reporting HKAS 16 Property, Plant and Equipment HKAS 17 Leases HKAS 18 Revenue HKAS 19 Employee Benefits HKAS 21 The Effects of Changes in Foreign Exchange Rates HKAS 23 Borrowing Costs HKAS 24 Related Party Disclosures HKAS 27 Consolidated and Separate Financial Statements HKAS 32 Financial Instruments: Disclosure and Presentation HKAS 33 Earnings Per Share HKAS 36 Impairment of Assets HKAS 37 Provisions, Contingent Liabilities and Contingent Assets HKAS 38 Intangible Assets HKAS 39 Financial Instruments: Recognition and Measurement HKFRS 2 Share-based Payment HKFRS 3 Business Combinations All new standards adopted by the Group require retrospective application other than those specifically allowed under the transitional provisions in the relevant standards. The following is a summary of significant changes to the principal accounting policies adopted in the preparation of the 2004 annual accounts as a result of the adoption of the new HKFRSs in 2005. (a) HKAS 17 Leases The adoption of HKAS 17 has resulted in a change in accounting policy relating to leasehold land. Leasehold land was previously stated at fair value. In accordance with the provisions of HKAS 17, leasehold properties are split into a lease of land and a lease of building in proportion to the relative fair values of the interests in the land element and the building element of the lease at the inception of the lease. The lease premium for leasehold land is stated at cost and amortised over the period of the lease. HKAS 17 has been applied retrospectively. Building portion of freehold and leasehold properties was previously stated at fair value. Following the adoption of HKAS 17 where leasehold land is subject to amortisation, the accounting policy on buildings is changed and buildings are now stated at cost less accumulated depreciation and impairment. This change in accounting policy has been applied retrospectively. As of 1st January, 2005, the effect of these changes in accounting policies is to decrease the net book value of freehold and leasehold properties by HK$9,462,000 (1st January, 2004: to increase by HK$7,117,000), to increase deferred tax assets by HK$1,370,000 (1st January, 2004 : to decrease by HK$280,000), to decrease deferred tax liabilities by HK$894,000 (1st January, 2004 : to increase by HK$120,000), to increase retained earnings by HK$5,333,000 (1st January, 2004 : HK$9,837,000) and to decrease properties revaluation reserve by HK$12,531,000 (1st January, 2004 : HK$3,120,000) respectively. (b) HKFRS 3 Business Combinations; HKAS 36 Impairment of Assets and HKAS 38 Intangible Assets The adoption has resulted in a change in accounting policy for goodwill. Goodwill was previously amortised on a straight-line basis over a period of not exceeding 20 years, and assessed for impairment at each balance sheet date.