Your fortnightly technical updates newsletter (4 August 2021)

Members' Handbook

Consequential amendments arising from the following standards, which were previously set out in the appendices to the respective standards but are now incorporated into the text and basis for conclusions.

Interest Rate Benchmark Reform — Phase 2: Amendments to HKAS 39 Financial Instruments: Recognition and Measurement, HKFRS 4 Insurance Contracts, HKFRS 7 Financial Instruments: Disclosures, HKFRS 9 Financial Instruments and HKFRS 16 Leases
Covid-19-related rent concessions beyond 30 June 2021: Amendment to HKFRS 16 Leases

The Preface to Hong Kong Financial Reporting Standards is updated for the issuance of invitations to comment on IFRS Interpretations Committee tentative agenda decisions.

HKAS 36 Impairment of Assets is updated for editorial corrections.

Standard setting

Invitation to comment

The Institute is seeking comments on the following International Accounting Standards Board (IASB) exposure drafts:

Exposure Draft ED/2021/8 Initial Application of IFRS 17 and IFRS 9 – Comparative Information (Proposed amendment to IFRS 17) by 20 August
Exposure Draft ED/2021/7 Subsidiaries without Public Accountability: Disclosures by 17 December

July 2021 IASB and joint IASB-FASB update and podcast

The July IASB and joint IASB-FASB Update, highlighting the tentative decisions reached at the IASB monthly meeting and discussions from the joint meeting with the Financial Accounting Standards Board (FASB), and the July podcast, focusing on the IASB discussions at its monthly meeting, are now available.

Recording of the IASB webinar on Exposure Draft Management Commentary webinar

A recording is now available for a webinar held by the IASB on Exposure Draft ED/2021/6 Management Commentary, which sets out a proposed comprehensive framework for companies preparing management commentary in response to investors and creditors’ changing information needs and developments in narrative reporting. Members can submit comments on the exposure draft to the Institute by 8 October.

Invitation to comment

The Institute is seeking comments on:

Exposure Draft Practice Note 740 (Revised) Auditor’s Letter on Continuing Connected Transactions under the Hong Kong Listing Rules by 30 August
The International Auditing and Assurance Standards Board (IAASB) Exposure Draft Proposed International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE) by 31 December. The new proposed standard aims at focusing the work of auditors through requirements designed to be proportionate to the typical nature and circumstance of less complex entities

Auditing and Assurance Standards Committee meeting minutes

Minutes of the meeting held in May is now available.

IAASB July board meeting

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

Auditor’s reporting requirements for the Funding Scheme for Children’s Well-being and Development

The reporting requirements for the Funding Scheme for Children’s Well-being and Development requires auditors to report on certain aspects of the funded organizations following HKSRS 4400 Engagements to Perform Agreed-Upon Procedures Regarding Financial Information and the specimen agreed-upon procedures report developed by the Commission on Children (Commission). In order to report the findings required by the Commission, the Institute’s alert suggests practising members to consider performing procedures beyond the scope of HKSRS 4400.

Keeping up with Changes to the International Code of Ethics for Professional Accountants: A Primer for SMPs and SMEs

The article highlights the key changes to the Code of Ethics and the role and mindset expected of professional accountants.

Institute submission

The Institute has submitted its comment letteron the IFRS Foundation Exposure Draft Proposed Targeted Amendments to the IFRS Foundation Constitution to Accommodate an International Sustainability Standards Board to Set IFRS Sustainability Standards.

Advocacy and practice development

Best Corporate Governance and ESG Awards 2021 open for entry until 9 August

Don’t miss the deadline to enter the Institute’s revamped Best Corporate Governance and ESG Awards of 9 August. More details about the awards, and how to enter them can be found on the website.

Announcements by the Inland Revenue Department

Members may wish to be aware of the following matters:

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:

COSO provides guidance on application of ERM to cloud computing from Journal of Accountancy
Finance leaders’ opinions on top skills for the future from Financial Management
Your business survived the pandemic – Now what? from CFO.com
How to keep your most valued employees during 'the great resignation' from Entrepreneur
5 aspects of business resilience (from 5 different viewpoints) from In the Black

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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