Annual Report 2021

174 Transport International Holdings Limited 2021 Annual Report NOTES TO THE FINANCIAL STATEMENTS (Expressed in Hong Kong dollars unless otherwise indicated) 1 Significant accounting policies (continued) (l) Leased assets (continued) (ii) As a lessor When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to the ownership of an underlying asset to the lessee. If this is not the case, the lease is classified as an operating lease. When a contract contains lease and non-lease components, the Group allocates the consideration in the contract to each component on a relative stand-alone selling price basis. The rental income from operating leases is recognised in accordance with note 1(u)(vi). (m) Intangible assets (other than goodwill) Intangible assets (other than goodwill) are stated at cost less accumulated amortisation (where the estimated useful life is finite) and impairment losses (see note 1(n)(iii)). Passenger service licences and transport operating rights are assessed and regarded by the Group to have indefinite useful lives and are not amortised. Any conclusion that the useful life of an intangible asset is indefinite is reviewed annually to determine whether events and circumstances continue to support the indefinite useful life assessment for that asset. If they do not, the change in the useful life assessment from indefinite to finite is accounted for prospectively from the date of change and amortisation is charged to profit or loss on a straight-line basis over the asset’s estimated remaining useful life. (n) Credit losses and impairment of assets (i) Credit losses from financial instruments The Group recognises a loss allowance for ECLs on the following items: – financial assets measured at amortised cost (including bank deposits and cash, trade and other receivables, including loan to joint venture, which is held for the collection of contractual cash flows which represent solely payments of principal); and – investments in debt securities measured at FVOCI (recycling). Financial assets measured at fair value, including equity securities designated at FVOCI (non-recycling) and derivative financial assets, are not subject to the ECL assessment.