Your fortnightly technical updates newsletter (27 October 2021)

Standard setting

Webinar on presentation and disclosures of financial statements

This live webinar on 3 December will provide an overview of recently issued/amended 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.

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.

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 VAT 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.

IASB article on business combinations under common control

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

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 less complex entity audits:

Participate the Institute’s roundtable on 9 November to share views on the exposure draft. Members attending the roundtable will be entitled to up to 1 CPD hour
Join the Institute’s live webinar on 19 November to get an overview of the proposed standard
Take part in the Institute’s survey, which highlights the key attributes of the exposure draft followed by yes/no questions
IAASB LinkedIn livestreams
A podcast by the Institute of Chartered Accountants in England and Wales (ICAEW)
An optional response template

Reminder: webinars on auditing and assurance

Join the following webinars in November to stay updated:

16 November: Industry update relating to licensed corporations
18 November: Industry update relating to investment funds

IAASB October board meeting

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

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 which 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

This 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.

Advocacy and practice development

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 website for details.

Announcements by the Inland Revenue Department

Members may wish to be aware of the following matters:

Announcements by the government

Members may wish to be aware of the following matters:

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 UNSC press release.

Others

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.

Useful resources

Publications from other organizations:

Sustainability: what is credible leadership? by ICAEW
More corporate directors agree action needed on board diversity from Financial Management
6 ways to make the entire organization care about anti-fraud efforts from Journal of Accountancy
Drive innovation with better decision-making from Harvard Business Review

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Disclaimer: Some sections contain information from outside sources. We endeavour to link to reputable sources but the Institute is not responsible for the accuracy of the content and the content does not necessarily represent the views of the Institute.

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