Technical news

• All members to undertake a minimum of two verifiable hours annually on ethics-related CPD activities.
• Practising Certificate holders and Responsible Persons of registered Public Interest Entity (PIE) auditors to undertake a minimum of five verifiable hours annually on accounting or auditing-related CPD activities.
• All members to undertake a minimum of 50 percent of the required 60 verifiable CPD hours on structured learning activities in each rolling three-year period.

These changes will take effect in the CPD cycle starting on 1 December 2026, except for the ethics CPD requirement for Responsible Persons of registered PIE auditors and Practising Certificate holders, which will take effect on 1 December 2025.

Financial reporting

List of new and amended HKFRS

The Institute has published the list of amended Hong Kong Financial Reporting Standards (HKFRS) that are applicable to December 2025 year-end.

Accounting guidance on virtual assets

The Institute has issued guidance on which HKFRS Accounting Standards apply to cryptocurrencies and stablecoins. This publication underscores our commitment to supporting you as you navigate the rapidly evolving digital asset landscape.

Educational resources for the IFRS for SMEs Accounting Standard

To support small and medium-sized entities (SMEs) in applying the third edition of the IFRS for SMEs Accounting Standard, the IFRS Foundation has published a suite of educational resources designed to help stakeholders learn, implement and apply the standard.

These resources are also relevant for entities applying the revised HKFRS for Private Entities Accounting Standard, issued by the Institute in April 2025, which aligns with the third edition of the IFRS for SMEs Accounting Standard published by the International Accounting Standards Board (IASB).

IASB issues illustrative examples on reporting uncertainties in financial statements

The IASB has issued the final version of illustrative examples to assist companies in applying IFRS Accounting Standards when reporting the effects of uncertainties in their financial statements. The final version only differs from the near-final draft published in July 2025 in minor editorial details.

While the examples use climate-related scenarios for practical illustrations, the underlying principles apply more broadly to all uncertainties. As accompanying materials to IFRS Accounting Standards, the illustrative examples do not have an effective date. However, companies are expected to implement any change in their reporting on a timely basis.

Auditing and assurance

Updates: auditing and assurance on virtual assets-related matters

The Institute is pleased to provide an update following Alert 51:

• Virtual Asset Trading Platforms (VATPs):

Following careful consideration and discussions with relevant parties, it has been determined that there is no immediate need to develop guidance for auditor pre-licensing assessments of VATPs. The Institute will continue to monitor market and regulatory developments to ensure that auditors are adequately supported.

• Upcoming guidance (1H 2026):

Work is currently in progress on two key resources: (i) Guidance for auditors’ independent attestations on licensed stablecoin issuers; and (ii) A guide for auditors of virtual asset-related businesses, designed to highlight common challenges and incorporate relevant guidance from overseas accounting and auditing bodies.

Checkpoint – Information Produced by the Entity for Use as Audit Evidence

The Accounting and Financial Reporting Council has released Checkpoint – Information Produced by the Entity for Use as Audit Evidence. It provides an overview of the types of information produced by the entity (IPE) commonly encountered in audits, highlights key considerations for auditors when using IPEs, and provides guidance on how to evaluate the reliability of IPEs before using them as audit evidence.

Q&A related to PN 810.2 (Revised) The Duties of the Auditor of an Insurer authorized under the Insurance Ordinance

The Insurance Authority prepared a Q&A on the specific requirements regarding how the “Specified Annual Forms” should be attached to the independent auditor’s assurance report under Rule 5 of the Insurance (Submission of Statements, Reports and Information) Rules.

Ethics

HKICPA ethics video: auditor independence

Access the Institute’s latest video for an overview of auditor’s independence principles and real-life cases for practical takeaways on auditor independence.

Test your knowledge of ethical considerations in tax planning

The International Ethics Standards Board for Accountants staff has developed a set of 12 myth-busting questions on the ethical standards for tax planning and related services. Click here to test your knowledge of ethical considerations in tax planning.

Sustainability

Institute submission

The Institute has submitted its comment letters on the following International Sustainability Standards Board (ISSB) exposure drafts:

• Proposed Amendments to the SASB Standards; and
• Proposed Amendments to the Industry-based Guidance on Implementing IFRS S2.

HKICPA releases HKFRS S1 and S2 Guidance – Part 2

The Institute has released HKFRS S1 and S2 Guidance – Part 2 (the guidance), building on Part 1 released in August 2025, which addresses key foundational topics.

Part 2 continues this effort by offering clear, actionable steps to overcome implementation challenges on hot issues, complemented by practical examples and insights informed by prevailing market practices. It features:

• A step-by-step approach to addressing implementation challenges;
• Practical examples and insights from market practices; and
• Coverage of key areas, including climate-related scenario analysis, anticipated financial effects, greenhouse gas emissions, transition plans and connected information.

This latest release reinforces the Institute’s commitment to supporting both sustainability and non-sustainability professionals in applying HKFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and HKFRS S2 Climate-related Disclosures.

ISSB issues targeted amendments to IFRS S2 to support implementation

The ISSB has issued targeted amendments to greenhouse gas emissions disclosure requirements in IFRS S2 Climate-related Disclosures in response to specific application challenges that were identified as companies started to apply the Standard.

The amendments are based on feedback from the ISSB’s consultation earlier in 2025. These changes provide relief and clarification to support companies in applying the Standard, while keeping investor information needs in focus and minimizing disruption to jurisdictions that are in the process of adopting or otherwise using ISSB Standards.

The amendments are effective for reporting periods beginning on or after 1 January 2027, with early application permitted.

IAASB publishes new illustrative reports to support ISSA 5000 implementation

The International Auditing and Assurance Standards Board (IAASB) has published a new set of illustrative practitioner’s assurance reports to further support the implementation of International Standard on Sustainability Assurance (ISSA) 5000 General Requirements for Sustainability Assurance Engagements. Developed through a joint initiative with a group of jurisdictional auditing and assurance standard setters, this guidance has benefited from their collaboration and support.

While ISSA 5000 includes illustrative reports that reflect the baseline requirements of the standard, this new publication provides three examples of assurance reports with modified conclusions, along with specific examples to help practitioners apply the standard across a range of engagements:

• Assurance on sustainability disclosures aligned with IFRS S1 and S2, for both limited and reasonable assurance engagements
• Assurance on selected sustainability disclosures in an entity’s sustainability report
• Assurance on sustainability disclosures prepared using multiple reporting frameworks
• Assurance engagements combining limited and reasonable assurance

Together, these illustrative reports aim to bring ISSA 5000 to a practical level, demonstrating how to address technical issues in real-world applications.

Corporate finance

SFC issued the No.75 Takeovers Bulletin

On 31 December 2025, the Securities and Future Commission (SFC) issued a Takeovers Bulletin to provide a quarterly update on the activities of Takeovers Team and amendments on Practice Note 9 to summarize the practice regarding securities held by connected exempt principal traders as simple custodians for non-discretionary clients.

FSTB and SFC publish consultation conclusions on legislative proposals for regulating virtual asset dealing and custodian services

The Financial Services and the Treasury Bureau (FSTB) and the SFC jointly published the consultation conclusions on the legislative proposals for establishing licensing regimes for virtual asset (VA) dealing and custodian service providers on 24 December 2025. They also launched a further public consultation for one month on establishing separate licensing regimes for VA advisory and management service providers.

The majority of respondents expressed strong support for expanding the regulatory scope to cover VA dealing and custodian services, following the introduction of the licensing regime for the VA trading platform in June 2023.

The Institute’s submissions on the consultation proposals can be viewed here.

Please refer to the full versions of Technical News on the Institute’s website: www.hkicpa.org.hk