Your fortnightly technical updates newsletter (9 June 2021)

Members' Handbook

Update No. 262 relates to the publication of Deferred tax related to assets and liabilities arising from a single transaction (amendments to HKAS 12 Income Taxes).

Standard setting

Invitation to comment

The Institute is seeking comments on the International Accounting Standards Board (IASB) Exposure Draft ED/2021/6 Management Commentary by 8 October.

May 2021 IASB update and podcast

The May IASB Update, highlighting the tentative decisions reached at the IASB monthly meeting, and the May podcast, focusing on the IASB discussions at its monthly meeting, are now available.

Recording of IASB webinar on the Exposure Draft Disclosure Requirements in IFRS Standards—A Pilot Approach

The webinars on the IASB Exposure Draft ED/2021/3 Disclosure Requirements in IFRS Standards—A Pilot Approach cover the IASB’s proposals in developing disclosure requirements in IFRSs and new disclosure requirements for IFRS 13 Fair Value Measurement and IAS 19 Employee Benefits.

The recording of the first webinar, providing an overview of the exposure draft
The second live webinar on 17 June will cover detailed and particular aspects of the proposed approach, such as comparability, enforceability and electronic reporting

Members can submit their comments on the exposure draft to the Institute by 31 August.

Recordings of IASB presentations

Recordings are now available of the two presentations delivered by the IASB to attendees of the European Accounting Association Virtual Congress. The recordings provide an overview of the IASB Request for Information Third Agenda Consultation as well as progress of other projects. The Institute is seeking comments on the request for information by 10 August.

Speech by the IASB Chair

Hans Hoogervorst, Chair of the IASB, delivered a speech at the IFRS Foundation Virtual Conference 2021 reflecting how IFRSs have evolved during his 10-year tenure and the importance of independent standard setting.

Invitation to comment

The Institute is seeking comments on the International Auditing and Assurance Standards Board (IAASB) Survey Consultation, the IAASB’s Work Plan for 2022-2023 by 5 July.

Webinars on quality management standards

The IAASB and the International Federation of Accountants (IFAC) will hold a series of webinars on International Standard on Quality Management 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements via Zoom, including question and answer sessions. Recordings will be available on the IAASB’s YouTube channel afterwards. Register now: 24 Jun, 29 Jul, 5 Aug, 18 Aug.

Webinar on climate risk in statutory audit

Join the Institute of Chartered Accountants in England and Wales’ webinar on climate risk in the statutory audit. It considers how auditors are taking account of climate-related risks and offers practical tips for improving audit quality in this area.

IAASB auditor post-implementation review feedback statement

The IAASB published a feedback statement after its post-implementation review of auditor reporting. It summarizes the key themes and views shared by respondents as well as a roundtable discussion held in September 2020.

IESBA webinars on revisions to the Code

The International Ethics Standards Board for Accountants’ (IESBA) will hold webinars on the recently released revisions to the Non-Assurance Services (NAS) and Fee-related provisions of the International Code of Ethics for Professional Accountants (including International Independence Standards). During each webinar, the IESBA representatives will explain key provisions of the revised NAS and fee-related independence standards that will come into effect in December 2022. Register now: 16 June fees webinar, 17 June NAS webinar.

Extended deadline to IESBA’s Long Association Post-Implementation Review questionnaire

The IESBA has extended the closing date for stakeholders to submit responses to its Long Association Post-Implementation Review questionnaire to 30 June. This feedback will help inform the IESBA’s review of the implementation of the five-year cooling-off requirement for engagement partners on audits of public interest entities in the International Independence Standards.

IFRS Foundation Trustees webinar update on sustainability project

The IFRS Foundation Trustees invite interested stakeholders to register for live webinars on 7 July, which will provide an update on the work on setting up a proposed International Sustainability Standards Board. The webinars will summarize the feedback gathered during the Trustees’ 2020 Consultation and outline the Trustees’ strategic decisions and the remaining steps before the Trustees make a final determination on the new board by the United Nations COP26 conference in November.

IFRS Foundation response to G7 finance ministers’ communique regarding global sustainability standards

The IFRS Foundation provided comments on the communique issued by the G7 finance ministers that referenced ongoing work of the Trustees to consider the formation of a new sustainability board within the governance structure of the IFRS Foundation.

IFRS Foundation establishes Eminent Persons Group

The IFRS Foundation has established an Eminent Persons Group to provide strategic advice and counsel to the Trustees on the proposed formation of the International Sustainability Standards Board and its connectivity with jurisdictional initiatives. Its work complements other working groups and committees established to support the IFRS Foundation’s determination of its role in sustainability-related financial disclosures. The Institute is seeking comments on the IFRS Foundation Exposure Draft ED/20215 Proposed Targeted Amendments to the IFRS Foundation Constitution to Accommodate an International Sustainability Standards Board to Set IFRS Sustainability Standards by 2 July.

Advocacy and practice development

Institute submission on HKEX consultation on listing regime for overseas issuers

The Institute issued a submission in response to the Consultation Paper published by the Hong Kong Exchanges and Clearing Limited (HKEX) seeking public feedback on proposals to enhance and streamline the listing regime for overseas issuers.

The Institute’s Corporate Finance Advisory Panel generally supports the underlying aims of the proposals to address the fragmented and, to some extent, inconsistent regulatory requirements for different kinds of overseas issuers. However, there are reservations about proposals to allow grandfathered overseas issuers with non-compliant weighted voting rights and/ or variable interest entity structures to apply for dual primary listing directly on the Hong Kong Stock Exchange and for these companies, and also companies with a secondary listing in Hong Kong, to retain their non-compliant structures even if they are de-listed from the exchange where they have a dual primary or primary listing. The concern is that this would create different regulatory regimes for different issuers with primary listings in Hong Kong, depending on whether they were listed only in Hong Kong at the outset or originally held a primary listing or dual primary listing on an overseas exchange.

HKEX consults on changes to the Corporate Governance Code and related rules

HKEX is consulting on changes to the Corporate Governance Code and related listing rules. Issues covered in the consultation paper include corporate culture; directors’ independence and attendance at general meetings; board diversity, communications with shareholders; and linkages with environmental social and governance (ESG) reporting, including the timing of publication of ESG reports. The deadline for submissions to HKEX is 18 June.

Announcements by the Inland Revenue Department

Members may wish to be aware of the following matters:

Passage of Inland Revenue (Amendment) (Miscellaneous Provisions) Bill 2021
This bill implements four areas of amendments to the Inland Revenue Ordinance: (i) the tax treatment for amalgamation of companies under the court-free procedures as provided for under the Companies Ordinance; (ii) the tax treatment for transfer or succession of specified assets under certain circumstances; (iii) refining the statutory framework for the furnishing of tax returns, including paving the way for an expansion of e-filing; and (iv) enhancing the foreign tax deduction regime. The amendments will come into operation on 11 June. Amendments in relation to foreign tax deduction will take effect from the year of assessment 2021/22.
Interest on Tax Reserve Certificates
Legislative Council question on re-industrialization in Hong Kong
Legislative Council question on profits tax
Online Appointment Booking for Stamp Office Lease Counter Service
Stamp Duty statistics

Announcements by the government

Members may wish to be aware of the following matters:

AML notices

United Nations Sanctions (Yemen) Regulation 2019 (Amendment) Regulation 2021 was gazetted on 28 May.

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:

Business transformation: capturing 6 components to make informed decisions from Financial Management
Enterprise risk management: How to make it a priority from CFO.com
5 trends to watch during the pandemic recovery from Journal of Accountancy
The new digital edge: Rethinking strategy for the postpandemic era from McKinsey & Company
Cybersecurity isn’t just an IT issue by ICAEW

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