Annual Report 2023

93 ANNUAL REPORT 2023 2. MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED) 2.1 Basis of preparation (continued) In addition, for financial reporting purpose, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows: ‧ Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; ‧ Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and ‧ Level 3 inputs are unobservable inputs for the asset or liability. The preparation of consolidated financial statements in conformity with HKFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 3. (i) New and amendments to HKFRSs that are mandatorily effective for the current year In the current year, the Group has applied the following new and amendments to HKFRSs issued by the HKICPA for the first time, which are mandatorily effective for the Group’s annual period beginning on 1 January 2023 for the preparation of the consolidated financial statements: HKFRS 17 (including the October 2020 and February 2022 Amendments to HKFRS 17) Insurance Contracts Amendments to HKAS 8 Definition of Accounting Estimates Amendments to HKAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction Amendments to HKAS 12 International Tax Reform-Pillar Two model Rules Amendments to HKAS 1 and HKFRS Practice Statement 2 Disclosure of Accounting Policies The application of new and amendments to HKFRSs in the current year has had no material impact on the Group’s financial positions and performance for the current and prior years and/or on the disclosures set out in these consolidated financial statements.