China Communications Services Corporation Limited Annual Report 2015
115
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2015
2. SIGNIFICANT ACCOUNTING POLICIES
(continued)
(r) 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
acquisition.
(s) Derivative financial instruments
Derivative financial instruments are initially recognised at fair value. At each end of the reporting period the fair value
is remeasured. The gain or loss on remeasurement to fair value is recognised immediately to profit or loss, except
where the derivative qualify for cash flow hedge accounting or hedge the net investment in a foreign operation.
(t) Employee benefits
(i) Short-term employee benefits and contributions to defined contribution retirement plans
Salaries, annual bonuses, paid annual leave, contributions to defined contribution retirement plans and the cost
of non-monetary benefits are accrued in the year in which the associated services are rendered by employees.
(ii) Share appreciation rights scheme
Compensation expense in respect of the share appreciation rights granted is accrued as a charge to profit or
loss over the applicable vesting period based on the fair value of the stock appreciation rights. The liability of
the accrued compensation expense is remeasured to fair value at each end of the reporting period until the
liability is settled with the effect of changes in the fair value of the liability is charged or credited to profit or
loss. Further details of the Group’s share appreciation rights scheme are set out in note 38.
(iii) Termination benefits
A liability for a termination benefit is recognised at the earlier of when the group entity can no longer withdraw
the offer of the termination benefit and when it recognised any related restructuring costs.
