Question One (50 Marks): An extract of the significant accounting policies of a Hong Kong listed corporation for the year ended 31 December 2016 is reproduced below (with minor editing process): Property, Plant and Equipment Property, plant and equipment other than construction in progress are stated at cost less accumulated depreciation and any impairment loss. When an item of property, plant and equipment is classified as held for sale, or when it is part of a disposal group held for sale, it is not depreciated and is accounted for in accordance with IFR.S5. The cost of a property, plant and equipment comprises its purchase price and any directly attributable costs for bringing the item to its location for operation purpose. Depreciation is calculated on straight line basis. Investment Properties Investment properties are interests in building (including leasehold interest under an operating lease for a property which would otherwise be classified as an investment property) held to earn rental income and or capital appreciation, rather than for production of goods or supply of services or for administration purpose; or for sale in the ordinary course of business. Such properties are measured initially at cost including transaction cost Subsequent measurement is based on cost less accumulated depreciation and any impairment loss. Depreciation is calculated on straight line basis to write off the cost of the investment properties according to their useful lives. Intangible Assets (other than Goodwill) Intangible assets acquired separately are measured on initial recognition at costs. The cost of intangible assets acquired on business combination is the fair value as at the date of acquisition. The useful lives of intangible assets are either finite or infinite. Intangible asgets with finite lives are subsequently amortized over the economic lives and assessed for any impairment. Intangible assets with infinite lives are assessed for impairment annually and there is no amortization of such. Research and Development Cost Research costs are charged to income statement as incurred. Costs for development of projects are only capitalized and deferred only when the Group can demonstrate technical feasibility for completing of intangible asset so that it would be available for use or sale, its intention to complete the product and ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the project, and the reliability of measurement of subsequent expenditures in completing the project. Deferred developmental costs are measured at costs less amortization over its estimated useful lives and any impairment loss assessment