since the date when the companies first came under the control of our Controlling Shareholders, whichever is the shorter period, in a manner similar to the principles of merger accounting under Hong Kong Accounting Guideline 5 “Merger Accounting for Common Control Combination” issued by the HKICPA.

Inter-company transactions, balances and unrealized gains/losses on transactions between group companies are eliminated on combination.

# CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of our consolidated financial information requires us to make significant estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and their accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these significant assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amounts of the assets and liabilities affected in the future. We have identified below the accounting policies that we believe are the most critical to our consolidated financial information and that involve the most significant estimates.

# Early adoption of IFRS 9

For the purpose of the preparation of our financial information for the years ended December 31, 2016, 2017 and 2018 and the six months ended June 30, 2019, we have adopted IFRS 9 “Financial Instruments” since January 1, 2016. The impacts on the financial information upon the adoption of IFRS 9 are considered material due to classification and measurement as explained in detail below:

Available-for-sale investment under IAS 39 were classified to financial assets at fair value through profit or loss and financial assets designated at fair value through other comprehensive income under IFRS 9. Accordingly, unquoted equity investments stated as cost less impairment loss under IAS 39 are stated with fair value under IFRS 9. The investments were measured at fair value through profit or loss at the end of each reporting period, with a corresponding gain on change in fair value of US\$17,948,000, US\$5,675,000, US\$742,000 and US\$5,988,000, respectively, credited to other income and gains in 2016, 2017, 2018 and the six months ended June 30, 2019, respectively. The equity investments were irrevocably designated at fair value through other comprehensive income at the end of each reporting period as our Group considers these investments to be strategic in nature. The fair value changes in these investments resulted in a loss (net of tax) amounting to US\$6,446,000 in 2016, a gain (net of tax) amounting to US\$4,759,000 and US\$4,287,000 in 2017 and 2018, and nil in the six months ended June 30, 2019, respectively, as recorded in other comprehensive income.

# Early adoption of IFRS 15

For the purpose of preparation of our financial information for the years ended December 31, 2016, 2017 and 2018 and the six months ended June 30, 2019, we have adopted IFRS 15 “Revenue from Contracts with Customers” since January 1, 2016. Except for changes in certain reporting items caused by reclassification, there is no material impact on our financial information due to the adoption of IFRS 15.

# Early adoption of IFRS 16

IFRS 16 supersedes IAS 17 “Leases”, IFRIC 4 “Determining Whether an Arrangement Contains a Lease”, SIC-15 “Operating Leases-Incentives” and SIC-27 “Evaluating the Substance of