Your fortnightly technical updates newsletter (28 April 2021)

Members' Handbook

Update No. 259:

Amendments to Hong Kong Accounting Standard (HKAS) 1 Presentation of Financial Statements and Hong Kong Financial Reporting Standard (HKFRS) Practice Statement 2 Making Materiality Judgements (Disclosure of Accounting Policies)
Amendments to HKAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (Definition of Accounting Estimates)

Update No. 260:

Amendments to Chapter A of the Code of Ethics for Professional Accountants to conform with the corresponding revisions to the International Ethics Standard Board for Accountants’ (IESBA) International Code of Ethics for Professional Accountants (Including Independence Standards) addressing the objectivity of an engagement quality control reviewer and other appropriate reviewers
Issuance of Hong Kong Standard on Quality Management (HKSQM) 1, HKSQM 2 and Hong Kong Standard on Auditing (HKSA) 220 (Revised) to strengthen and modernize an audit firm’s approach to quality management through a robust, proactive and effective approach and requires an engagement partner and engagement team to be proactive in managing and achieving quality

Standard setting

Invitation to comment

The Institute is seeking comments on the International Accounting Standards Board (IASB) Exposure Draft ED/2021/4 Lack of Exchangeability by 30 July.

Webinar on common application issues of HKFRS 3 Business Combinations

Join the live webinar on 11 June focusing on some commonly seen arrangements in business combination transactions and how to apply HKFRS 3 Business Combinations, and other relevant standards. It will also illustrate some common application issues of applying the standard through case studies.

Webinar on common application issues of AG 5 Merger Accounting for Common Control Combinations

This webinar on 21 June will discuss common application issues of Accounting Guideline 5 Merger Accounting for Common Control Combinations and what constitutes a business combination under common control (BCUCC). The IASB Discussion Paper on BCUCC will also be covered.

March 2021 IFRS for SMEs update

The March 2021 IFRS for SMEs Update newsletter, providing a summary of news, events, and other information about the IFRS for SMEs standard and related SME activities, is now available.

IASB investor perspective article

Issue 23 of the IASB Investor Update is now available and provides a brief overview of the proposals of the IASB Exposure Draft ED/2021/1 Regulatory Assets and Regulatory Liabilities. The update also discusses how investors may find the new information useful in analysing the financial performance of rate-regulated companies. Members can submit their comments on the exposure draft to the Institute by 30 June.

IFRS Interpretations Committee agenda decision

The IFRS Interpretations Committee published an agenda decision on IAS 38 Intangible Assets covering the configuration or customization costs in a cloud computing arrangement. The committee’s website contains all agenda decisions.

Recording of IASB virtual workshop on the post-implementation review of IFRS 10, IFRS 11, and IFRS 12

A recording is now available of the virtual workshop held by the staff of the IASB in conjunction with the European Accounting Association and the European Financial Reporting Advisory Group on the Request for Information Post-implementation Review of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities. The review seeks feedback on applying these three standards and on the information provided to users of financial statements.

IASB webcast in Putonghua on Discussion Paper Business Combinations under Common Control

The IASB has published a webcast in Putonghua on the IASB Discussion Paper DP/2020/2 Business Combinations under Common Control, which explains the IASB’s preliminary views on how to reduce diversity in practice and improve the transparency and comparability in reporting business combinations under common control. Members can submit their comments on the paper to the Institute by 5 July.

Auditing and Assurance Standards Committee meeting minutes

Minutes of the 390th meeting held in March is now available.

Resource centre on quality management standards

Visit the Institute’s resource centre on the new and revised quality management standards for pronouncements, guides and articles relating to quality management for firms and engagements.

IAASB Public Report

The International Auditing and Assurance Standards Board (IAASB) Public Report details its progress to support the public interest between July 2019 and December 2020 and how it responded to the global pandemic by issuing guidance and engaging with a broad range of stakeholders in order to sustain trust in audit and assurance.

Artificial intelligence and automation’s impact on audit

A publication prepared by the Chartered Professional Accountants of Canada (CPA Canada) and the American Institute of CPAs (AICPA) explores the benefits of an artificial intelligence (AI) enabled audit and how AI evolves the audit and the role of the auditor
A CPA Canada article discusses opportunities and examples for using automation and analytics at every stage of the auditing process

IESBA’s technology initiative update

IESBA released an update on its progress made on technology initiative, next steps and timing. It also recognized the increased burdens stakeholders have shouldered as a result of the pandemic.

Advocacy and practice development

HKMA responds to insolvency practitioners’ concerns on opening of bank accounts

After discussions between the Hong Kong Monetary Authority (HKMA), the Official Receiver’s Office and the Institute’s Restructuring and Insolvency Faculty Executive Committee, the HKMA has compiled a list of designated contact points of retail banks for insolvency practitioners to enquire about account-opening related matters with specific banks.

The HKMA has also provided the following dedicated email account and hotline to facilitate bank customers to provide feedback regarding opening and maintenance of bank accounts:

Email: accountopening@hkma.gov.hk
Hotline: 2878-1133

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:

Designated flights under HK-Singapore Air Travel Bubble to begin on May 26
Extension of Return2hk Travel Scheme to Hong Kong residents staying in other Mainland provinces and municipalities (Upon fulfilment of all specified conditions Hong Kong residents could be exempted from the 14-day compulsory quarantine requirement. Visit the scheme’s webpage for more information.)

AML notices

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:

The pandemic pushed us forward. Let’s keep evolving from CPA Insider
CFOs step up to face their new enemy: Poor data from Financial Management
Derisking digital and analytics transformations from McKinsey & Company
Where to focus your cyber security – the sequel by ICAS

Install the HKICPA Events app

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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