Financial reporting
Invitation to comment
The Institute is seeking comments on the International Accounting Standards Board (IASB) Exposure Draft Annual Improvements to IFRS Accounting Standards – Volume 11 by 10 November.
Institute submission
The Institute has submitted its comment letter on the IASB Request for Information on Post-Implementation Review of International Financial Reporting Standards (IFRS) 9 Financial Instruments – Impairment.
The Institute’s Financial Reporting Standards Committee meeting minutes
Minutes of the July 2023 meeting is now available.
IASB September 2023 podcast and update
The IASB podcast, with its vice-chair and executive technical director highlighting the projects discussed during its September meeting, and a summary of the September meeting, are now available.
IFRS Interpretations Committee September 2023 Update
The IFRS Interpretations Committee Update provides a summary of discussions at its September meeting.
IASB to explore ways to improve reporting of climate-related and other uncertainties in the financial statements
The IASB has decided to explore targeted actions to improve the reporting of climate-related and other uncertainties in the financial statements. The possible actions include development of educational materials, illustrative examples and targeted amendments to IFRS Accounting Standards to improve application of existing requirements.
Given the pace of change in this area, the IASB will also continue to monitor developments to determine whether to take further action. In progressing this work, IASB technical staff will continue to work closely with International Sustainability Standards Board (ISSB) technical staff to facilitate connections in the boards’ work.
IASB sets out accounting requirements for when a currency is not exchangeable
In response to stakeholders’ feedback and concerns about diversity in practice in accounting for a lack of exchangeability between currencies, the IASB has issued amendments to International Accounting Standard (IAS) 21 The Effects of Changes in Foreign Exchange Rates. The amendments will require companies to provide more useful information in their financial statements when a currency cannot be exchanged into another currency.
IASB technical staff have produced a webcast to explain how the new requirements aim to address situations in which a currency is not exchangeable into another currency.
Auditing and assurance
Institute submission
The Institute has submitted its comment letter on the International Auditing and Assurance Standards Board (IAASB) Proposed International Standard on Auditing (ISA) 570 (Revised 202X) Going Concern and Proposed Conforming and Consequential Amendments to Other ISAs.
The State of Play: Beyond the G20
This study by the International Federation of Accountants (IFAC) expands the IFAC’s sustainability disclosure and assurance data to 20 additional jurisdictions beyond the G20 previously reported on. The results show that both sustainability disclosure and assurance are improving in those jurisdictions.
Assurance for new and veteran investors, part of the IFAC and IOSCO world investor week series
The IFAC and the International Organization of Securities Commissions (IOSCO) have created new videos which aim to provide investors with a better understanding of assurance, enabling them to better understand the financial well-being of potential investments, and fostering trust in the accounting profession.
- What is Assurance? discusses how professional accountants evaluate the reliability of information, and how assurance enhances trust and confidence.
- What is Sustainability Assurance? discusses the important role professional accountants play in understanding the accuracy of non-financial information, with a particular focus on sustainability matters.
Determining the group auditor’s responsibilities: Implementation guide
This guide by the Chartered Professional Accountants of Canada includes:
- A summary of requirements for audits of group financial statements.
- Key considerations for effective two-way communication between the group auditor and component auditors.
- Sample letters and a sample memorandum of work performed.
- Practical considerations for complying with the requirements.
Ethics
Pressure to breach the fundamental principles
It is important for professional accountants to uphold the fundamental principles of the Code of Ethics for Professional Accountants and remain vigilant against workplace pressures that may lead to breaches. Read the poster produced by the Institute’s Ethics Committee to learn about potential scenarios where breaches might occur, and the appropriate actions against pressures to breach the fundamental principles.
The Institute’s Ethics Committee meeting
Minutes of the 257th meeting is now available.
IESBA Handbook 2023 edition
The International Ethics Standards Board for Accountants (IESBA) released the 2023 Handbook of the International Code of Ethics for Professional Accountants (including International Independence Standards)(IESBA Code). It replaces the 2022 edition and incorporates the following revisions:
- Revisions relating to the definition of engagement team and group audits.
- The upcoming expiry of the “jurisdictional provision” addressing long association of personnel with an audit client, which will be no longer available for audits of financial statements for periods beginning on or after 15 December 2023.
The handbook also contains the following revisions to the IESBA Code which will become effective in December 2024:
- Revisions to the definition of a public interest entity.
- Changes to the definitions of “audit client” and “group audit client” in the glossary arising from the approved revisions to the definitions of listed entity and public interest entity.
- The technology-related revisions.
Sustainability
Institute submission
The Institute has submitted its comment letter on the ISSB’s Request for Information Consultation on Agenda Priorities.
Sue Lloyd delivers keynote speech on the current agenda of the ISSB and cooperation with EU institutions
Sue Lloyd, Vice-Chair of the ISSB, delivered a keynote address on the current agenda of ISSB and the cooperation between the ISSB and the European Union (EU) institutions at the Association of German Banks Courtyard Reception on 30 August.
Jean-Paul Servais delivers keynote speech on recent achievements and perspectives of IOSCO
Jean-Paul Servais, Chair of the IOSCO Board, delivered a keynote speech on IOSCO’s recent achievements and perspectives at the Eurofi 2023 Financial Forum on 13 September.
ISSB September 2023 podcast and update
The ISSB podcast, with its chair and vice-chair highlighting the latest developments from the ISSB, and a summary of the September meeting, are now available.
ISSB congratulates TNFD on finalized recommendations
During New York Climate Week 2023, the Task Force on Nature-related Financial Disclosures (TNFD) published its recommendations to help companies communicate nature-related risks and opportunities to investors and other stakeholders.
Consistent with the ISSB’s approach of building upon the work of market-led initiatives grounded in current-best practice and thinking, the ISSB will look to the TNFD recommendations – where it relates to meeting the information needs of investors – in its future work. The ISSB is also working on educational materials for disclosing the nature and social aspects of climate-related risks and opportunities. Read the news for details.
Corporate finance
SFC amends takeovers and share buy-backs codes
On 21 September, the Securities and Futures Commission (SFC) published consultation conclusions on its proposed amendments to the Codes on Takeovers and Mergers and Share Buy-backs (codes), which was gazetted on 29 September and then took effect immediately.
The amendments mainly codify existing practices of the Takeovers Executive and clarify the codes where necessary. Changes include revising the definitions of important terms, streamlining processes to enhance efficiency, and introducing green initiatives to reduce the carbon footprint of codes documents. Please refer to the press release for details.
Taxation
Institute issues submission on proposals regarding the introduction of a patent box tax incentive in Hong Kong
The Institute issued a submission on 29 September, in response to the government’s consultation paper on the introduction of a patent box tax incentive for Hong Kong-sourced intellectual property (IP) income. To encourage more research and development and IP trading activities in Hong Kong, the consultation paper proposes that eligible IP income derived from eligible IP assets that are patents or patent-like be taxed at a concessionary tax rate in Hong Kong.
The Institute’s submission expresses support for the proposals, while highlighting the need for further clarification and guidance. Furthermore, the government is encouraged to take a more holistic view, relax the criteria for some of the existing incentives for IP and research and development, and provide a more supportive ecosystem extending beyond tax incentives, so as to foster the growth of the innovation and technology sector, as well as strengthen Hong Kong’s position as a global hub for technology and IP development.
Legislation and other initiatives
Anti-money laundering (AML) notices
For the current lists of terrorists, terrorist associates and relevant persons/entities under United Nations sanctions, members should refer regularly to the Institute’s AML webpage.
Please refer to the full versions of Technical News on the Institute’s website: http://www.hkicpa.org.hk
