Webinar on interest rate benchmark reform and its effects on financial reporting
On 12 January, the Institute is holding a live webinar to provide an overview on the effects of the interest rate benchmark reform on financial reporting. The webinar will go through the necessary amendments to financial reporting standards, and walk participants through how to apply the amendments with illustrative examples.
Q&A for Hong Kong Interpretation 5 (2020) Presentation of Financial Statements – Classification by the Borrower of a Term Loan that Contains a Repayment on Demand Clause
The Institute has published questions and answers for Hong Kong Interpretation 5 (2020) Presentation of Financial Statements – Classification by the Borrower of a Term Loan that Contains a Repayment on Demand Clause, which was revised in October as a consequence of the amendments to Hong Kong Accounting Standard 1 Presentation of Financial Statements introduced by Classification of Liabilities as Current or Non-current in August. The amendments clarify how to classify debt and other liabilities as current or non-current but do not change the existing requirements, are effective for annual periods beginning on or after 1 January 2023, and apply retrospectively, with earlier application permitted.
November 2020 IASB podcast update
The November podcast, focusing on the International Accounting Standards Board (IASB) at its monthly meeting, and the November IASB Update, highlighting the tentative decisions reached at the IASB monthly meeting and discussions from the Joint IASB and Financial Accounting Standards Board education meeting held on 19 November, are now available.
IASB educational material on the effect of climate-related matters on financial statements prepared under IFRSs
The IASB has issued educational material highlighting how climate-related matters should be considered when companies prepare financial statements using International Financial Reporting Standards (IFRSs). The educational material complements an article an IASB member wrote in November 2019, and includes a non-exhaustive list of examples of when companies may need to consider climate-related matters in their reporting. The educational material is aimed at supporting the consistent application of IFRSs, and does not add to or change the requirements in IFRSs.
Auditing and assurance
Webinar on solicitors’ accounts rules and PN 840 reporting engagements
Practising members are sometimes engaged to issue an accountant’s report on a firm of solicitors. The report is prepared with regard to the requirements of the Solicitors’ Accounts Rules and Accountant’s Report Rules made under the Legal Practitioners Ordinance (Cap. 159) as explained in Practice Note (PN) 840 Reporting on Solicitors’ Accounts under the Solicitors’ Accounts Rules and the Accountant’s Report Rules. The Institute’s webinar on 4 January will explain solicitors’ obligations with respect to their handling of clients’ money and common breaches of such obligations, followed by a panel discussion on pitfalls in solicitors’ accounts reporting.
IAASB November virtual meeting
The meeting audio of the International Auditing and Assurance Standards Board (IAASB) November virtual meeting is now available.
IAASB’s videos on quality management standards
The IAASB has published video introductions to the new and revised quality management standards explaining the key aspects of the three standards to help stakeholders begin their implementation efforts.
IAASB’s support material on using automated tools and techniques when identifying risks of material misstatement
The IAASB has published non-authoritative frequently asked questions assisting auditors to understand the types of automated tools and techniques that can be used, and how they can be used, in performing risk assessment procedures in accordance with International Standard on Auditing 315 (Revised 2019) Identifying and Assessing the Risks of Material Misstatement.
IAASB’s key takeaways from roundtable series on fraud and going concern
This IAASB’s publication summarizes key themes and insights from the virtual roundtables previously held on issues and challenges related to fraud and going concern, which comprise one aspect of the IAASB’s broader information-gathering activities related to fraud and going concern that will be considered in determining possible future actions.
U.K. FRC consolidated COVID-19 guidance for companies and auditors
The United Kingdom’s Financial Reporting Council has published consolidated guidance for companies and auditors addressing audit engagements that may be affected by COVID-19.
IESBA new role and mindset fact sheet
The International Ethics Standards Board for Accountants (IESBA) has released a new fact sheet providing an overview of the recently released revisions to the International Code of Ethics for Professional Accountants (including International Independence Standards) to better promote the role and mindset expected of all professional accountants.
Invitations to comment
HKEX’s concept paper on fast interface for new issuance
On 16 November, the Stock Exchange of Hong Kong (HKEX) launched a concept paper on fast interface for new issuance, proposing to streamline the initial public offering (IPO) settlement process. In particular, the time gap between IPO pricing and trading may be shorted from five business days to one business day.
The deadline for submissions to the HKEX is 15 January 2021. Please refer to the press release for details.
HKEX’s consultation on Main Board Profit Requirement
On 27 November, the HKEX issued a consultation paper on proposals to increase the profit requirement for Main Board listing applicants. Please refer to the press release for details.
The deadline for responding to the consultation paper is 1 February 2021. Members are welcome to submit any views or comments on the proposals to the Institute (quoting their membership number and contact details) to the Advocacy and Practice Development department at firstname.lastname@example.org on or before 8 January 2021.
SFC’s proposals to introduce investor identification for the securities market in Hong Kong
On 4 December, the Securities and Futures Commission (SFC) issued a consultation paper on proposals to introduce investor identification for the securities market in Hong Kong. Please refer to the press release for details.
The deadline for submission to the SFC is 4 March 2021.
Consultation conclusions on proposed amendments to the Code on REITs
On 27 November, the SFC issued consultation conclusions on its proposals to amend the Code on Real Estate Investment Trusts (REITs). The proposals received broad support and, with some modifications to clarify specific requirements, such as those which apply to minority-owned properties, the amendments were gazetted on 4 December and became effective immediately. See the press releases on 27 November and 4 December for details.
The Institute issued a response to the original consultation paper in August, which, in general, supported the SFC’s proposals.
Disqualification of Directors – Revised Arrangement on Submission of Form D1 and Form D2
The Official Receiver (OR) issued ORO Circular No.2/2020, on 12 November, setting out a revised arrangement on submission of Forms D1 and D2 by provisional liquidators/liquidators to the OR, which includes submitting a questionnaire when filing a Form D1. The circular is effective from 1 December.
Announcements by the Inland Revenue Department
Members may wish to be aware of the following matters:
- List of Qualifying Debt Instruments (as at 30 September 2020).
- Latest arrangements of Inland Revenue Department’s public services.
- Departmental Interpretation and Practice Notes No. 62 Taxation of Ship Leasing Activities.
- Interest on Tax Reserve Certificates.
- Legislative Council question on relief measures.
- Abolition of Doubled Ad Valorem Stamp Duty on non-residential property transactions – ad valorem stamp duty and relevant frequently asked questions and illustrative examples.
- Stamp Duty statistics.
Legislation and other initiatives
Announcements by the government
Members may wish to be aware of the following matters:
- Government gazetted specifications under Prevention and Control of Disease (Compulsory Testing for Certain Persons) Regulation (Cap. 599J).
- Government further tightens social distancing measures and extends expiry dates of Regulations under Prevention and Control of Disease Ordinance.
- Government further tightens testing and isolation arrangement for crew members of aircraft and other exempted persons including Cap. 599C exempted persons.
- The Office of the Privacy Commissioner for Personal Data issues three practical Guidance Notes under the series “Protecting Personal Data under Work-from-Home Arrangements.”
Members may be interested in Anti-Money Laundering: The Basics, developed by the International Federation of Accountants and the Institute of Chartered Accountants in England and Wales, which provides brief guidance covering different AML topics.
The United Nations Sanctions (Mali) Regulation 2019 (Amendment) Regulation 2020 and the United Nations Sanctions (Central African Republic) Regulation 2020 (Amendment) Regulation 2020 were gazetted on 10 November.
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.