Technical news

The latest standards and technical developments

Financial reporting 

Institute’s webinar on presentation and disclosures of financial statements
A live webinar on 3 December will provide an overview of recently issued/amended Hong Kong Financial Reporting Standards (HKFRSs), Hong Kong Interpretations and HKFRS Practice Statements in relation to the presentation and disclosures of financial statements. It will also provide an update on the development of related International Accounting Standards Board (IASB) projects and findings from the Institute’s practice review programme on presentation and disclosures.

Institute’s webinar on considerations in performing impairment assessments

A live webinar on 14 December will discuss how to perform an impairment assessment and the related considerations for applying the requirements of Hong Kong Accounting Standard 36 Impairment of Assets and Hong Kong Standard on Auditing 540 (Revised) Auditing Accounting Estimates and Related Disclosures. The speaker will also share tips on reviewing valuation reports and common pitfalls in performing an impairment test.

Institute’s webinar on IFRS Interpretations Committee agenda decisions that are relevant to Hong Kong
A live webinar on 15 December will cover several IFRS Interpretations Committee agenda decisions/tentative agenda decisions that may have wider implications in Hong Kong. The speaker will explain how the applicable principles and requirements in the International Financial Reporting Standards (IFRSs) apply to specific fact patterns.

IASB webcast on Exposure Draft Subsidiaries without Public Accountability: Disclosures

The IASB has published a short video that introduces the proposals for a new accounting standard that would permit eligible subsidiaries to apply IFRSs with reduced disclosure requirements in their financial statements.

IASB webcast series on Exposure Draft Management Commentary

A series of bitesize webcasts on Exposure Draft Management Commentary has been produced to address frequently asked questions about the IASB’s proposals for a new framework for preparing management commentary.

IASB article on BCUCC

Ann Tarca, a member of the IASB, published an article that explains the IASB’s preliminary views for accounting for business combinations under common control (BCUCC). The IASB’s proposals aim to reduce diversity in practice and to improve the information provided to investors.

IASB October podcast and October update

The IASB October podcast, with its chair and vice-chair highlighting the projects discussed during the October meeting, and a summary of the October meeting, are now available.

October IFRS Interpretations Committee podcast

The IFRS Interpretations Committee podcast, highlighting the committee’s key activities during the third quarter, is now available. Topics discussed include non-refundable value-added tax on lease payments, accounting for warrants that are financial liabilities on initial recognition, demand deposits with restrictions on use and cash received via electronic transfer as settlement for a financial asset.

Auditing and assurance

Invitation to comment

The Institute is seeking comments on International Auditing and Assurance Standards Board (IAASB) Exposure Draft Proposed International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (LCEs) by 31 December. Members may be interested in the following regarding the proposed standard for LCE audits:

  • Take part in the Institute’s survey, which highlights the key attributes of the exposure draft followed by yes/no questions. The survey can be found on the Standard Setting Department’s “What’s new” webpage.
  • IAASB LinkedIn livestreams.
  • Follow the IAASB on Linkedin for the next upcoming Linkedin Live LCE session.
  • An optional response template.
  • A podcast by the Institute of Chartered Accountants in England and Wales (ICAEW).

IAASB Quality management webinar series

Watch the recording of the IAASB’s webinars that take a deep dive into aspects of the International Standard on Quality Management 1 Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements.

Institute’s Auditing and Assurance Standards Committee meeting minutes

Minutes of the meeting held in September is now available.

Financial Reporting Council reports

The Financial Reporting Council issued its Annual Investigation and Compliance Report, covering the 18-month period from 1 October 2019 to 31 March 2021. It also published its Interim Inspection Report in the middle of its first three-year inspection cycle.

IAASB October board meeting

The audio recording of the IAASB October board meeting is now available.

IAASB first digital handbook

The IAASB’s digital handbook of pronouncements is now live on its website. It is designed to meet stakeholders’ needs, allows for quick reference to other standard-setting boards’ standards and related resources.

Joint report on fraud, going concern and the expectation gap in audit

A report by the Association of Chartered Certified Accountants, Chartered Accountants Australia and New Zealand, Chartered Professional Accountants of Canada and the Canadian Auditing and Assurance Standards Board examines the auditor’s role in the areas of fraud and going concern and the related expectation gap and identifies recommendations to narrow this gap.

ICAEW audit and assurance resources 

The ICAEW has the following material that may be of interest to members:

  • The recording of ICAEW’s Financial Reporting, Audit and Assurance Conference to explore a wide range of technical topics.
  • Technical articles on fraud and audit; improving audit quality etc. through ICAEW’s Audit and Beyond October 2021.

Institute members can also subscribe to ICAEW’s International Standards for free to access a wide range of resources on auditing and ethics.


2021 IESBA Handbook

The International Ethics Standards Board for Accountants (IESBA) has released the 2021 Edition of the Handbook of the International Code of Ethics for Professional Accountants (including International Independence Standards). It contains recently approved revisions to the code, including:

  • The revisions to Part 4B to align terms and concepts used in the code to those in International Standard on Assurance Engagements 3000 (Revised) Assurance Engagements Other Than Audits or Reviews of Historical Financial Information that became effective in June 2021.
  • The revisions to Parts 1 and 2 to promote the role and mindset expected of professional accountants that will become effective in December 2021, with early adoption encouraged.

Approved revisions that are not yet effective have been included in the back of the handbook. These revisions will become effective in December 2022 and include:

  • Revisions to the code addressing the objectivity of an engagement quality reviewer and other appropriate reviewers.
  • Revisions to the non-assurance services provisions of the code.
  • Revisions to the fee-related provisions of the code.

Using specialists in the COVID-19 environment

A publication by IESBA, IAASB and the American Institute of CPAs provides guidance to assist professional accountants in business and in public practice determine when there might be a need to use the services of a specialist to assist in perform specific tasks and other professional activities within their employing organizations and in serving their clients in the COVID-19 environment. It also highlights relevant ethical considerations for accountants when thinking about using a specialist, as well as circumstances that indicate a need for a specialist during an audit of financial statements.

Launch of eCode 2.0

The IESBA launched eCode 2.0 using the e-International Standards platform. In addition to providing electronic access to the authoritative standards developed by the IESBA, it provides access to non-authoritative resource materials, including staff-prepared basis for conclusions, and questions and answers publications.


Formation of a new International Sustainability Standards Board and other updates related to sustainability standards development

At the 2021 United Nations Climate Change Conference (COP26) on 3 November, the IFRS Foundation Trustees announced the formation of a new International Sustainability Standards Board, a commitment to consolidate with the Climate Disclosure Standards Board and the Value Reporting Foundation, and the publication of prototype climate and general disclosure requirements developed by its Technical Readiness Working Group. The speech delivered by Erkki Liikanen, Chair of the trustees, and a recording of a panel discussion from COP26 on this topic are now available.

Free webinar: Sustainability offers new opportunities for SMPs  

A free live webinar on 15 December, co-hosted by the European Federation of Accountants and Auditors for SMEs and the International Federation of Accountants, will cover recent developments focused on small- and medium-sized practices (SMPs) and small- and medium-sized enterprises (SMEs) and involve a distinguished panel covering how SMPs can get started, and examples of those taking action in sustainability.

ICAEW sustainability articles

The ICAEW has the following articles that may be of interest to members:

  • Climate change: the basics on getting started: How businesses can get started on making a positive change for the climate.
  • How SMEs can take steps towards net zero: A finance director of an SME explains what the company has done so far, and how other SMEs can follow suit.

Corporate finance

Institute submission on HKEX consultation on SPACs

The Institute issued a submission in response to the consultation paper published by the Hong Kong Exchanges and Clearing (HKEX), seeking public feedback on proposals to create a listing regime for special purpose acquisition companies (SPACs) in Hong Kong.

The submission agrees that the listing of SPACs is an issue that merits consideration by the HKEX. However, the view is that, if a new listing regime for SPACs is introduced, we should proceed with caution in the first instance, given the specific characteristics of the Hong Kong market, which still has a substantial proportion of retail investor participation. This also takes into account that regulatory changes relating to SPACs in the United Kingdom and Singapore are still very recent, and that the surge in SPAC listings in the United States over the past couple of years has been accompanied by increased regulatory scrutiny and warnings to investors from the U.S. Securities and Exchange Commission.

Under the circumstances, the proposed restrictions, including limiting investment in SPACs to professional investors, until they have merged with a substantive business that meets most of the normal listing requirements, are understandable from an investor protection perspective. In addition, the Institute’s Corporate Finance Advisory Panel commented on a number of the detailed proposals, putting forward suggestions aimed at making the future market in SPACs more active, liquid and viable.

HKEX consults on Proposed Amendments to Listing Rules relating to Share Schemes of Listed Issuers

HKEX has issued a consultation paper seeking market views on its proposal to extend Chapter 17 of the Listing Rules to also govern share award schemes, in view of the increasing adoption of these schemes. HKEX, in particular, proposes changes to specific requirements in Chapter 17, such as the definition of eligible participants and the requirements for scheme mandate refreshments, to align them with the purpose of share schemes and to improve disclosure of grants of share options and share awards. The deadline for submissions to HKEX is 31 December.

SFC’s consultation conclusions on conduct requirements for bookbuilding and placing activities

On 29 October, the Securities and Futures Commission (SFC) released consultation conclusions on the conduct requirements for capital market transactions in Hong Kong, which clarify the roles of intermediaries and set out the standards expected of them in bookbuilding, pricing, allocation and placing activities.

The amendments to the Code of Conduct for Persons Licensed by or Registered with the SFC and Guideline to sponsors, underwriters and placing agents involved in the listing and placing of GEM stocks become effective on 5 August 2022.

Please refer to the press release for details.

Please also refer to the Institute’s submission, generally supporting the underlying aims of the SFC’s proposals.


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.

Announcements by the IRD

Members may wish to be aware of the following matters:

  • Arrangements relating to Application for Business Registration Documents.
  • Stamp Duty statistics.

Legislation and other initiatives

Announcements by the government

Members may wish to be aware of the following matters:

  • Government welcomes passage of Financial Reporting Council (Amendment) Bill 2021.
  • Government welcomes passage of Mandatory Provident Fund Schemes (Amendment) Bill 2021.
  • Standing Committee on Company Law Reform publishes annual report.
  • Hong Kong Monetary Authority announces list of eligible banks in Hong Kong for launching Cross-boundary Wealth Management Connect Pilot Scheme.
  • Government welcomes Organization for Economic Co-operation and Development’s announcement of Base Erosion and Profit Shifting 2.0 implementation plan.
  • Government announces Hong Kong’s Climate Action Plan 2050.

AML news and notices

FATF publication on high-risk and other monitored jurisdictions

The Financial Action Task Force (FATF) published a statement on 21 October regarding High Risk Jurisdictions Subject to a Call for Action, calling on its members and all jurisdictions to continue to apply specific measures and actions on Iran and the Democratic People’s Republic of Korea.

The FATF also issued a notice on Jurisdictions under Increased Monitoring, referring to other jurisdictions that have been identified to have strategic anti-money laundering/counter-terrorist strategic deficiencies and that are working with the FATF to address these deficiencies. Following recent reviews, Botswana and Mauritius are no longer subject to increased monitoring and updated statements are provided for some of the remaining 20 jurisdictions on the list. In addition, Jordan, Mali, and Turkey have been newly included on the list.

Sanctions update

The List of individuals and entities published under section 43 of the United Nations Sanctions (Libya) Regulation 2019 (Cap. 537CF) was updated on 26 October. See the relevant United Nations Security Council press release.

The United Nations Sanctions (South Sudan) Regulation 2019 (Amendment) Regulation 2021 was gazetted on 29 October.

The United Nations Sanctions (Central African Republic) Regulation 2020 (Amendment) Regulation 2021 was gazetted on 29 October.


AMLbites, produced by the ICAEW, contains the basics on popular money laundering topics. The videos are aimed at money laundering reporting officers, compliance principals and people in regulatory roles.

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. 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: 

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