Invitations to comment
The Institute is seeking comments on:
- The International Auditing and Assurance Standards Board’s (IAASB) Public Consultation on Proposed Guidance Extended External Reporting Assurance by 1 June.
- IAASB’s Exposure Draft: International Standard on Auditing (ISA) 600 (Revised) Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors) and Proposed Conforming and Consequential Amendments to Other ISAs by 14 August.
- The International Accounting Standards Board’s (IASB) Exposure Draft: ED/2019/7 General Presentation and Disclosures by 21 August (extended from 22 May).
- IASB Request for Information: Comprehensive Review of the IFRS for SMEs Standard by 11 September (extended from 12 June).
- IASB Discussion Paper: DP/2020/1 Business Combinations – Disclosures, Goodwill and Impairment by 14 November (extended from 7 August).
- IASB Exposure Draft: ED/2020/2 COVID-19-Related Rent Concessions – Proposed amendment to International Financial Reporting Standard (IFRS) 16.
Audit and assurance
- IAASB technical director update on COVID-19 response.
- IAASB staff audit practice alert: going concern.
- IAASB non-authoritative support material: audit documentation when using automated tools and techniques.
- IAASB videoconference audios for meetings held on 1 April, 8 April and 14 April.
- International Federation of Accountants Exploring the IESBA Code Instalment 5: Independence.
- International Ethics Standards Board for Accountants (IESBA) Staff Questions & Answers: COVID-19 Ethics and Independence Considerations.
- April 2020 IASB update and podcast.
- April 2020 supplementary IASB update – impact of COVID-19. At the supplementary meeting, the IASB decided to:
– Propose an amendment to IFRS 16 Leases to help lessees account for COVID-19-related rent concessions, such as rent holidays. The Exposure Draft was published on 24 April with a 14-day comment period. The IASB expects to publish the final amendments to IFRS 16 in May and the Institute aims to respond quickly regarding equivalent amendments to Hong Kong Financial Reporting Standard 16 (see Institute submission for our comment letter, available on the Institute website);
– Propose a deferral of the effective date of Classification of Liabilities as Current or Non-current, an amendment to International Accounting Standard 1 Presentation of Financial Statements (issued in January 2020), by one year to annual reporting periods beginning on or after 1 January 2023. The Exposure Draft was published on 4 May with a 30-day comment period. The Institute will monitor the IASB’s redeliberations with a view to issuing equivalent amendments to Hong Kong Accounting Standard 1 once the IASB issues the final amendment to the effective date; and
– Extend the consultation period of the three published consultation documents by approximately three months: Exposure Draft ED/2019/7 General Presentation and Disclosures to September, Request for Information Comprehensive Review of the IFRS for SMEs Standard to October and Discussion Paper DP/2020/1 Business Combinations – Disclosures, Goodwill and Impairment to December.
To coincide with the IASB’s revised timelines, the Institute has also extended its own comment deadlines. Refer to the invitations for comment section for additional information.
- IASB education document on applying IFRS 16 to COVID-19-related rent concessions.
- IFRS 17 Insurance Contracts podcast covering the discussion at the April IASB meeting.
- Exposure Draft General Presentation and Disclosures investors webinar.
- April 2020 IFRS Interpretations Committee update.
- The IFRS Interpretations Committee second biannual Compilation of Agenda Decisions covering agenda decisions from October 2019 to March 2020.
The model for an uncertified securities market
On 8 April, the Securities and Futures Commission (SFC), Hong Kong Exchanges and Clearing Limited (HKEX) and the Federation of Share Registrars Limited jointly issued the consultation conclusions on the proposed operational model for implementing an uncertificated securities market in Hong Kong, which will:
- Enable securities to be moved into and out of the clearing and settlement system much more efficiently and cost effectively than present;
- Address concerns about settlement efficiencies being compromised, and the potential impact on market participants’ funding needs; and
- Result in less market disruption and costs as it builds on existing processes, operational flows and infrastructure.
The SFC, HKEX and the Federation of Share Registrars Limited will further develop the model and the regulatory framework to support it with a view to implementing the uncertificated securities market regime from 2022.
For further details, please refer to the consultation conclusions and press release. You may also wish to see the consultation paper and the Institute’s submission on the consultation.
HKEX extends deadline of consultation on corporate weighted voting rights
HKEX has announced an extension of the consultation deadline for the proposals on corporate weighted voting rights to 31 May (originally 1 May).
Restructuring and insolvency
Letter from the ORO regarding impact of COVID-19 pandemic
The Official Receiver’s Office (ORO) has issued a letter dated 14 April aimed at officeholders, which, among other things, advises on actions that should be taken where officeholders may face difficulty in complying with specified timelines or other requirements, due to the impact of the COVID-19 pandemic, and encouraging provisional trustees and trustees to exercise their professional judgement in relation to the use of flexibility in administering cases.
Announcements by the Inland Revenue Department
Members may wish to be aware of the following matters:
- Extended deadlines for tax payments.
- Interest on Tax Reserve Certificates.
- Latest arrangement for “Auto Tax Payment Service” under the “Electronic Tax Reserve Certificates” Scheme and “Save-As-You-Earn” Scheme.
- Profits tax return – fair value accounting.
- Tax Guide for Charitable Institutions and Trusts of a Public Character.
- DIPN 31 (Revised) on advance rulings.
- Gazettal of amendment notices made under Inland Revenue Ordinance.
- Stamp duty statistics (March 2020).
- Jail terms for two company directors.
Legislation and other initiatives
Anti-money laundering notices
For the current lists of terrorists, terrorist associates and relevant person or entities under United Nations (UN) sanctions, members should refer to the Institute’s anti-money laundering (AML) webpage, which is updated regularly. The UN Security Council Sanctions webpage of the Commerce and Economic Development Bureau contains consolidated lists of UN sanctions currently in force in Hong Kong.
For mandatory guidelines and information from the Institute on the Anti-Money Laundering/Counter-Terrorist Financing (AML/CFT) requirements for members, see the Institute’s Guidelines on Anti-Money Laundering and Counter-Terrorist Financing for Professional Accountants. Member practices may also find the Financial Action Task Force’s (FATF) Guidance for a Risk-Based Approach for the Accounting Profession to be a useful reference when developing their own risk-based approach to applying the AML/CFT requirements.
Members who are licensed to provide trust or company services need to be familiar with the Guideline on Compliance of Anti-Money Laundering and Counter-Terrorist Financing Requirements for Trust or Company Service Providers, by Companies Registry.
Members should be aware of the Hong Kong Money Laundering and Terrorist Financing Risk Assessment Report (in particular Chapter 6, covering designated non-financial businesses and professions), which indicates ML/TF risks and vulnerabilities in the Hong Kong market. The FATF’s Mutual Evaluation Report on Hong Kong is also a useful reference in terms of highlighting areas for improvement in the implementation of the AML/CFT regime in Hong Kong.
Please refer to the full version of TechWatch 211 here.