Update no. 271 relates to the publication of Initial Application of HKFRS 17 and HKFRS 9 – Comparative Information (Amendment to HKFRS 17). The Amendment to HKFRS 17 is a transition option relating to comparative information about financial assets presented on initial application of Hong Kong Financial Reporting Standard (HKFRS) 17 Insurance Contracts, and is aimed at improving the usefulness of comparative information for users of financial statements. HKFRS 17, together with the amendment, is effective for annual reporting periods beginning on or after 1 January 2023.
The update also includes the withdrawal of HKFRS for Private Entities (Revised September 2015) as it was superseded by HKFRS for Private Entities (Revised May 2017) which has been effective for annual reporting periods beginning on or after 1 January 2017.
IASB February podcast and update
The International Accounting Standards Board (IASB) February podcast, with its chair, vice-chair and executive technical director highlighting the projects discussed during the February meeting, and a summary of the February meeting, are now available.
Appointment of new chair of the IFRS Interpretations Committee
On 1 March, the Trustees of the International Financial Reporting Standard (IFRS) Foundation announced the appointment of Bruce Mackenzie as the new chair of the IFRS Interpretations Committee, with effect from 1 March this year. Mackenzie has served as an IASB member since October 2020 and is taking over from Sue Lloyd, who is moving to the International Sustainability Standards Board (ISSB) as its inaugural vice-chair from March, when she also steps down as IASB vice-chair.
February IFRS Interpretations Committee Update
The IFRS Interpretations Committee Update provides a summary of discussions at its February meeting. Topics discussed include negative low emission vehicle credits, targeted longer-term refinancing operations III transactions, and profit recognition for annuity contracts.
Auditing and assurance
Live virtual workshops: New quality management standards series
Join the Institute’s new quality management standards series in April to learn key requirements, applications and illustrated examples on how small and medium practitioners could meet the requirements of the new quality management standards.
New implementation guide for ISA 220
The International Auditing and Assurance Standards Board (IAASB) released a first time implementation guide for International Standard on Auditing (ISA) 220 (Revised) Quality Management for an Audit of Financial Statements to help stakeholders understand the requirements and properly implement the standard as intended. Practitioners are required to have quality management systems designed and implemented in accordance with ISA 220 by 15 December 2022.
The IAASB also released the implementation guides for International Standard on Quality Management (ISQM) 1 Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements and ISQM 2 Engagement Quality Reviews in 2021. The suite of quality management standards will come into effect on 15 December 2022.
IAASB February board meeting
The audio recording of the IAASB February board meeting is now available.
ICAEW audit and assurance resources
The Institute of Chartered Accountants in England and Wales (ICAEW) has the following resources that may be of interest to members:
- Resources to help audit firms prepare for new quality management standards ISQM 1, ISQM 2 and ISA 220 (Revised).
- An online event series designed to help small and medium practices implement the new quality management standards.
To support auditors in addressing challenges of auditing accounting estimates when implementing the revised ISA 540 Auditing Accounting Estimates and Related Disclosures, the ICAEW has produced a series of webcasts that use practical illustrations to consider key issues in common audit areas. The first webcast of the series tackles an often-overlooked area of accounting estimates – fixed assets and depreciation.
ICAEW has also set up a new resource hub on articles, helpsheets and other practical resources and tools to support the implementation of ISA 540 (Revised).
Interested members can also subscribe to ICAEW’s International Standards platform for free access to a wide range of resources on auditing and ethics.
Invitations to comment
The Institute is seeking comments on the following International Ethics Standards Board for Accountants’ (IESBA) Exposure Drafts:
- Proposed revisions to the Code Relating to the Definition of Engagement Team and Group Audits by 30 April.
- Proposed Technology-related Revisions to the International Code of Ethics for Professional Accountants (including International Independence Standards) (the international code) by 20 May. The proposed revisions aim at enhancing the international code’s robustness and expanding its relevance in an environment being reshaped by rapid technological advancements. The proposed amendments will also guide the ethical mindset and behaviour of professional accountants in business and in public practice as they deal with changes brought by technology in their work processes and the content of the services they provide.
Ethics in an era of complexity and digital change
The Chartered Professional Accountants of Canada, the Institute of Chartered Accountants of Scotland, the IESBA and the International Federation of Accountants (IFAC) released the third publication in a four-part thought leadership series examining the impact of rapid technological change on ethical leadership and the accounting profession. The latest instalment examines the high-stakes impact that bias and mis- and disinformation have on trust and objective decision-making. The first two instalments are available on IESBA’s designated “Ethical Leadership in the Digital Age” webpage.
IFRS Foundation agrees to establish ISSB presence in Frankfurt
On 2 March, the Trustees of the IFRS Foundation signed Memoranda of Understanding (MoUs) with German public and private sector institutions to formalize the partnerships and funding arrangements required to establish the presence of the ISSB in Frankfurt. The MoUs mark a key first step towards establishing the ISSB’s global, multi-location presence to support its broad stakeholder base.
Letter from the ORO regarding the impact of COVID-19 pandemic
The Institute has received a letter from the Official Receiver’s Office (ORO), advising on actions that should be taken where insolvency practitioners and appointment takers may face difficulties in complying with specified timelines or other requirements, due to the impact of the COVID-19 pandemic, and encouraging them to exercise professional judgment in relation to the flexibility in administering cases. Please also refer to the guidance set out in the ORO’s previous letter dated 14 April 2020 for details.
New online service for debtors: appointment booking for attestation services
With effect from 18 February, ORO has launched a new service for the debtors who intend to file “Debtor’s Bankruptcy Petition” and wish to have it attested before an authorized staff of the ORO to reserve the attestation service online via the GovHK Portal.
Please refer to the ORO’s website for details.
Institute’s response to 2022-23 budget
The government’s 2022-23 budget included a number of suggestions made by the Institute in its budget submission. The Institute welcomed the government’s Budget 2022-23, acknowledging the government’s efforts to help the public cope with the latest wave of the pandemic and to tackle the economic downturn. Read the Institute’s press release for more details.
Announcements by the IRD
Members may wish to be aware of the following matters:
- A letter to tax representatives, further extending the due date for filing 2020/21 Profits Tax returns for loss cases with Accounting Date Code “M” to from 28 February to 31 March and from 31 March to 30 April.
- Gazettal of Revenue (Tax Concessions) Bill 2022.
- Gazettal of Rating (Exemption) Order 2022 and Revenue (Reduction of Business Registration Fees and Branch Registration Fees) Order 2022.
- Tax measures proposed in 2022-23 budget and further information.
- Legislative Council question on promoting popularization of electric vehicles.
- Latest arrangements of public services for Inland Revenue Department’s (IRD)Business Registration Office.
- Suspension of service for filing of Tax Return – Individuals through eTAX.
- Latest stamp duty statistics.
Legislation and other initiatives
Announcements by the government
Members may wish to be aware of the following matters:
- Courts to generally adjourn all proceedings between 7 March and 11 April.
- Government explains latest criteria for early discharge from isolation and home quarantine.
- Hongkong Post to maintain essential postal services.
- Government announces postponement of retail green bond offering.
- Government announces 2022-23 Land Sale Programme.
- Budget provides support for people and businesses to ride out global pandemic and echoes determination to defeat virus, revitalize economy.
- Government extends place-specific flight suspension mechanism.
IFAC, together with ICAEW, released a new instalment in its Anti-Money Laundering: The Basics educational series – Instalment Seven: Virtual Assets.
The list of individuals and entities published under section 29 of the United Nations Sanctions (Somalia) Regulation 2019 (Cap. 537CG) was updated on 19 February.
The list of terrorists and terrorist associates designated by the United Nations Security Council, published pursuant to the United Nations (Anti-Terrorism Measures) Ordinance (Cap. 575) was gazetted on 8 March.
The list of individuals and entities published under section 25 of the United Nations Sanctions (ISIL and Al-Qaida) Regulation (Cap. 537CB), was updated on 8 March.
The list of individuals and entities published under section 30 of the United Nations Sanctions (Yemen) Regulation 2019 (Cap. 537CI), was updated on 3 March.
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: www.hkicpa.org.hk