Update no. 257 updates the preface to Hong Kong Financial Reporting Standards (HKFRS) and includes the issuance of HKFRS Practice Statement 2 Making Materiality Judgements.
Update no. 258 relates to the issuance of COVID-19-Related Rent Concessions beyond 30 June 2021 and the consequential amendments arising from the 2020 amendment to the standard, which were previously set out in the appendix to HKFRS 16 Leases but are now incorporated into the text of the standard.
Invitation to comment
The Institute is seeking comments on the International Accounting Standards Board (IASB) Exposure Draft ED/2021/3 Disclosure Requirements in IFRS Standards – A Pilot Approach by 31 August.
Extension of comment period for Exposure Draft Exposure Draft Regulatory Assets and Regulatory Liabilities
The IASB has extended by 30 days the comment period for the Exposure Draft Regulatory Assets and Regulatory Liabilities to give stakeholders more time to respond. The Institute has also extended its local deadline to comment to 30 June.
IASB Discussion Paper Business Combinations under Common Control
The Institute will hold a roundtable on 11 May to discuss the IASB Discussion Paper DP/2020/2 Business Combinations under Common Control, which explain the IASB’s preliminary views on how to reduce diversity in practice and improve the transparency and comparability in reporting business combinations under common control (BCUCC). Representatives from the IASB will participate in the roundtable, and this will be an excellent opportunity to communicate directly with local and international standards setters. Members may be interested in the following recordings on the IASB’s discussion paper:
- The Institute’s webinar (in Cantonese) providing an overview of the paper.
- The IASB’s webinar presenting suggestions for how the IASB could amend standards to make reporting more comparable and more transparent and explaining how those suggestions would apply to BCUCC.
Members can submit their comments to the Institute by 5 July.
The Institute has submitted its comment letter on the IASB Exposure Draft ED/2020/4 Lease Liability in a Sale and Leaseback – Proposed amendment to IFRS 16.
E-seminar for SMEs/SMPs
Enrol in our new e-seminar for small and medium enterprises and practices (SMEs/SMPs) that answers some frequently asked questions from SMEs/SMPs, and covers the amendments to the SME-FRF & SME-FRS standard that became effective on 1 January 2021. The e-seminar also provides an update on the IASB comprehensive review of the IFRS for SMEs standard (equivalent to HKFRS for Private Entities).
March IASB update and podcast
The March IASB Update, highlighting the tentative decisions reached at the IASB monthly meeting, and the March podcast, focusing on the IASB discussions at its monthly meeting, are now available.
March IFRS Interpretations Committee update
The March IFRS Interpretations Committee Update newsletter, summarizing the decisions reached by the Interpretations Committee at its February meeting, is now available.
February SME Implementation Group meeting report
The IFRS Foundation’s February SME Implementation Group meeting report, summarizing discussions from the February meeting, is now available.
Auditing and assurance
IAASB March board meeting
The meeting highlights and audio recording of the International Auditing and Assurance Standards Board (IAASB) March board meeting is now available.
New IAASB guidance helps advance assurance for non-finanical reporting
The IAASB has issued Non-Authoritative Guidance on Applying ISAE 3000 (Revised) to Extended External Reporting (EER) Assurance Engagements to support the assurance of non-financial reporting. The guidance promotes consistent high-quality application of International Standard on Assurance Engagements 3000 (Revised) in EER assurance engagements to:
- Strengthen the influence of such engagements on the quality of EER;
- Enhance trust in the resulting assurance reports; and
- Increase the credibility of extended external reports so that they can be trusted and relied upon by their intended users.
More support is available on the IAASB’s EER webpage. The Institute will follow its International Convergence Programme for local adoption in due course.
Quality management standards implementation plans
The IAASB has updated its implementation plans for the new and revised Quality Management Standards. The plans explain what implementation materials stakeholders can anticipate, topics covered, and expected timing.
IAASB support material addressing risk of overreliance on technology
The Technology Working Group of the IAASB released non-authoritative support material to help auditors address the risk of overreliance on technology, whether it arises from using automated tools and techniques or from using information produced by an entity’s systems.
Navigating the second year of the COVID-19 pandemic
The COVID-19 pandemic has impacted the work of auditors. The IAASB’s COVID-19 Staff Alerts provide reminders and help for auditors navigating the ongoing disruption. The IAASB’s COVID-19 webpage provides other useful resources in these challenging times.
ICAEW audit and assurance resources
The Institute of Chartered Accountants in England and Wales (ICAEW) has the following material that may be of interest to members:
- Determining materiality in a pandemic discusses the factors to consider and practical tips for setting materiality in the current pandemic environment.
- Audit and Beyond March and April issues summarize guidance to assist auditors with difficult judgements.
Institute members can also subscribe to ICAEW’s International Standards for free to access a wide range of resources on auditing and ethics.
IESBA March board meeting
The audio of the International Ethics Standards Board for Accountants (IESBA) March board meeting is now available.
IESBA’s post-implementation review of its long association international independence standard
The IESBA released an update on its Long Association Post-Implementation Review (LAPIR). This update provides an overview of Phase 1 of the LAPIR, which began earlier in the year and will review the implementation of a specific partner rotation provision for engagement partners around the world with respect to audits of public interest entities.
Ethics, technology, and the professional accountant in the digital age
An International Federation of Accountants (IFAC) article summarizes the discussion in a global event covering the “ABCDE” of the digital age (Artificial intelligence and robotic process automation, Blockchain, Cloud, Data, and Ethics) and compliance with the Code of Ethics for Professional Accountants.
New IFRS Foundation of a working group
The IFRS Foundation trustees announced the formation of a working group to accelerate convergence in global sustainability reporting standards focused on enterprise value and to undertake technical preparation for a potential international sustainability reporting standards board under the foundation. The working group will provide a forum for structured engagement with initiatives focused on enterprise value reporting. This follows a recent statement by the International Organization of Securities Commissions, calling for the coordination of work to drive international consistency of sustainability-related disclosures with a focus on enterprise value creation.
The IFAC issued a response to the announcement, welcoming it, and including a link to a letter from its chief executive on the matter.
Invitation to comment
The Stock Exchange of Hong Kong Limited has issued a consultation paper seeking public feedback on proposals to enhance and streamline the listing regime for overseas issuers, aiming to provide:
- Streamlined requirements with a single set of shareholder protection standards to ensure consistent protection is provided to all investors.
- Expansion of secondary listing regime for overseas-listed Greater China companies from traditional sectors without weighted voting rights.
- Greater flexibility for issuers seeking dual-primary listings while maintaining their existing weighted voting right structures and variable interest entity structures.
Please refer to the press release for details. The deadline for responding to the consultation paper is 31 May.
Official Receiver’s Office circular on presenting multiple winding up petitions
On 24 March, the Official Receiver (OR) issued a circular, concerning a number of recent cases where more than one winding-up petition has been presented against the same debtor company. The OR states that this is inappropriate in most circumstances, and any creditor who presents a winding-up petition while another is already pending risks bearing costs.
Electronic filing of Profits Tax Returns
Corporations and partnerships satisfying the conditions specified by the Commissioner of Inland Revenue can file their Profits Tax Returns for any year of assessment from 2015/16 to 2020/21 and attach supplementary forms to Profits Tax Return S1, S2, S3 and S4 electronically through eTAX. Please visit the Inland Revenue Department’s (IRD) website for details.
Electronic filing of Employer’s Return – Easy, secure and environment-friendly
The IRD will issue Employer’s Return of Remuneration and Pensions on 1 April, requesting employers to report the income details of their employees within one month from the date of issue. Employers can file their returns via the Internet through the e-Filing services under eTAX. Alternatively, employers can use IR56 Forms Preparation Tool to prepare annual IR56B data file for uploading to IRD via the Mixed Mode service. Please visit the IRD website for details.
Announcements by the IRD
Members may wish to be aware of the following matters:
- Suspension of service for filing of Tax Return – Individuals through eTAX.
- Profits tax, property tax and employer’s returns for 2020-21 issue.
- Pay promptly as second instalment is falling due.
- Block Extension Scheme for lodgement of 2020/21 tax returns.
- Suspension of instant business registration service.
- Legislative Council on assisting enterprises in exploring overseas business opportunities.
- Government welcomes passage of abolition of Doubled Ad Valorem Stamp Duty on non-residential properties.
- Gazettal of Inland Revenue (Amendment) (Miscellaneous Provisions) Bill 2021.
- Tax Representatives’ Corner.
- Interest on Tax Reserve Certificates.
- Stamp Duty statistics.
Legislation and other initiatives
Announcements by the government
Members may wish to be aware of the following matters:
- Clarification on implementation of inspection arrangements for Companies Register (See article from Webb-site.com).
- Government extends social distancing measures under Prevention and Control of Disease Ordinance.
Gazetted list of terrorists and terrorist associates designated by the United Nations Security Council (UNSC), published pursuant to the United Nations (Anti-Terrorism Measures) Ordinance (Cap. 575) was gazetted on 24 March and 7 April. See the relevant UNSC press release.
The List of individuals and entities published under section 30 of the United Nations Sanctions (Yemen) Regulation 2019 (Cap. 537CI) and List of individuals and entities published under section 31 of the United Nations Sanctions (Yemen) Regulation 2019 (Cap. 537CI) was updated on 6 April. See the relevant UNSC press release.
The List of individuals and entities published under section 33 of the United Nations Sanctions (Central Africa Republic) Regulation 2020 (Cap. 537CM) was updated on 6 April. See the relevant UNSC press release.
For the current lists of terrorists, terrorist associates and relevant persons/entities under UN sanctions, members should refer regularly to the Institute’s AML webpage. Other useful documents and guidance can also be found on the same page.
Please refer to the full versions of Technical News on the Institute’s website.