Annual Report 2023

Notes to the Consolidated Financial Statements 綜合財務報表附註 FOR THE YEAR ENDED 31 DECEMBER 2023 截至二零二三年十二月三十一日止年度 178 Sunny Optical Technology (Group) Company Limited • ANNUAL REPORT 2023 3. BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND MATERIAL ACCOUNTING POLICY INFORMATION (Continued) 3.2Ma t er i a l account i ng po l i cy i n forma t i on (Continued) Cash and cash equivalents Cash and cash equivalents presented on the consolidated statement of financial position include: (a) cash, which comprises of cash on hand and demand deposits, excluding bank balances that are subject to regulatory restrictions that result in such balances no longer meeting the definition of cash; and (b) cash equivalents, which comprises of short-term (generally with original maturity of three months or less), highly liquid investments that are readily convertible to a known amount of cash and which are subject to an insignificant risk of changes in value. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. For the purpose of consolidated statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above. Inventories Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a weighted average method. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Costs necessary to make the sale include incremental costs directly attributable to the sale and non-incremental costs which the Group must incur to make the sale. 3. 綜合財務報表之編製基準及 重大會計政策資料（續） 3.2 重大會計政策資料（續） 現金及現金等值項目 現金及現金等價物於綜合財務狀況表 呈列，包括： (a) 現金，其包括手頭現金及活期存 款，不包括受監管限制而導致有關 結餘不再符合現金定義的銀行結 餘；及 (b) 現金等值項目，其包括短期（通常 原到期日為三個月或更短）、可隨 時轉換為已知數額現金且價值變動 風險不大的高流動性投資。現金等 值項目持作滿足短期現金承擔，而 非用於投資或其他目的。 就綜合現金流量表而言，現金及現金 等值項目包括上文定義的現金及現金 等值項目。 存貨 存貨按成本及可變現淨值的較低者列 賬。存貨成本按加權平均法釐定。可 變現淨值指存貨估計售價減直至完工 的全部估計成本及銷售活動所需成 本。銷售活動所需成本包括銷售活動 直接產生的增量成本及集團銷售活動 必須產生的非增量成本。