NAVIGATION

Institute Virtual Roundtable Discussion: IASB ED on Business Combinations-Disclosures, Goodwill and Impairment

The Institute will be holding a virtual roundtable on 27 May to obtain views from stakeholders on the International Accounting Standards Board (IASB) Exposure Draft (ED) Business Combinations—Disclosures, Goodwill and Impairment. The ED would affect any entity that enters into a business combination or has cash-generating units containing goodwill, as well as the impairment test for all assets to which International Accounting Standard 36 Impairment of Assets applies.

Members and other interested parties are highly encouraged to join the roundtable to understand the effects of the ED and express their views on how business combinations should be reported. Register to reserve your place by 17 May.

Invitation to comment

The Institute is seeking comments on the IASB ED Addendum to the Exposure Draft Third edition of the IFRS for SMEs Accounting Standard by 25 June.

IASB investor perspectives: Performance of acquisition

In this article, Zach Gast, IASB member, discusses how the proposals in the IASB ED Business Combinations—Disclosures, Goodwill and Impairment will enable investors to better assess companies’ acquisitions.

New IFRS Accounting Standard will aid investor analysis of companies’ financial performance

The IASB has completed its work to improve the usefulness of information presented and disclosed in financial statements. The new standard, International Financial Reporting Standard (IFRS) 18 Presentation and Disclosure in Financial Statements, will give investors more transparent and comparable information about companies’ financial performance, thereby enabling better investment decisions. It will affect all companies using IFRS Accounting Standards.

IFRS 18 introduces three sets of new requirements to improve companies’ reporting of financial performance and give investors a better basis for analyzing and comparing companies:

Improved comparability in the statement of profit or loss (income statement)
Enhanced transparency of management-defined performance measures
More useful grouping of information in the financial statements

Q1 2024 IFRS Interpretations Committee podcast

In this podcast, Bruce Mackenzie, IFRS Interpretations Committee Chair and IASB member, discusses the decisions made at the March Committee meeting.

IFRS for SMEs Accounting Standard April Update

The IFRS for SMEs Accounting Standard April Update is now available.

Article: Digital financial reporting—Facilitating digital comparability and analysis of financial reports

The IFRS Foundation has published an introductory article to explain:

what digital financial reports are and how they are created;
the benefits of digital financial reporting for investors, companies and regulators; and
the importance of the IFRS digital taxonomies.

Invitation to comment

The Institute is seeking comments on the International Auditing and Assurance Standards Board (IAASB) Exposure Draft on Proposed International Standard on Auditing 240 (Revised), The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements and Proposed Conforming and Consequential Amendments to Other ISAs (ED-240) by 5 May. These proposed revisions significantly strengthen the IAASB’s standard on auditors’ responsibilities related to fraud by defining the expectations in relation to fraud, delineating more robust procedures, and increasing transparency about the auditors’ responsibilities and fraud-related procedures in the auditor’s report.

The IAASB has released a new four-part video series exploring the proposed changes to the standard. The series will help stakeholders understand the proposed changes that strengthen auditor’s responsibilities related to fraud, and the rationale behind them.

The Institute is interested in hearing your views about ED-240. You are invited to take part in the online survey which highlights the key attributes of the proposals followed by yes/no questions. The survey will close on 5 May. Click here to participate now.

Institute submission

The Institute has submitted its comment letter on the IAASB’s Proposed Narrow Scope Amendments to ISQMs; ISAs; and ISRE 2400 (Revised), Engagements to Review Historical Financial Statement as a Result of the Revisions to the Definitions of Listed Entity and Public Interest Entity in the IESBA Code.

Workshop for new auditors (re-run)

Tailored for audit staff with less than two years of experience, the Institute’s workshop held across 8, 24 and 27 May will focus on the core concepts and practical skills essential for new auditors of financial statement audits. The workshop applies an interactive learning format through discussions, case studies and role-play. Speakers will discuss auditing concepts and practical skills, as well as share their practice experience relevant to new auditors.

IAASB resources on ISA for LCE

The ISA for Less Complex Entities, known as the ISA for LCE, is tailored to meet the specific audit needs of smaller and less complex businesses and organizations. The IAASB has created a designated webpage for the ISA for LCE which offers various resources to support the utilization of the standard. These resources include videos, fact sheet, frequently asked questions (FAQs) and presentation decks.

The Institute’s Auditing and Assurance Standards Committee will consider the applicability of the ISA for LCE in a local context and will follow the due process for adoption in Hong Kong.

IAASB latest on projects

Access the IAASB eNews to understand the latest updates from the IAASB’s projects.

HKICPA Proposed Revisions to the Definitions of Listed Entity and Public Interest Entity in the Code

We welcome your feedback on the Institute’s Proposed Revisions to the Definitions of Listed Entity and Public Interest Entity in the Code. The proposal incorporates changes resulting from the final pronouncement issued by the International Ethics Standards Board for Accountants (IESBA) in April 2022, with local refinements to define a public interest entity (PIE) more explicitly to align with the circumstances in Hong Kong.

Notably, the proposal incorporates the following additional PIE categories in the Institute’s Code of Ethics for Professional Accountants, taking into account the specific context of Hong Kong.

MPF schemes registered under the MPF Ordinance.
ORSO schemes registered under the ORSO Ordinance with total assets exceeding HK$100 million by reference to the most recent set of audited financial statements.

Watch the video to understand the proposed revisions and submit your insights by 27 April.

Ethics standards on tax planning

The IESBA’s final pronouncement, Revisions to the Code Addressing Tax Planning and Related Services, provides a principles-based framework and a global ethical benchmark applicable to tax planning services and activities. These revisions establish a consistent point of reference for all professional accountants, as well as other tax professionals who are strongly encouraged to use them, when dealing with tax planning, to ensure due consideration of public interest as well as potential reputational, commercial, and wider economic consequences for their clients or employing organizations.

The revisions are aimed at complementing and further strengthening the relevance of the existing IESBA’s International Code of Ethics for Professional Accountants (Including International Independence Standards) that addresses tax planning and related services. They will be effective 1 July 2025.

The Institute’s Ethics Committee will follow the due process to converge and adopt the revisions for inclusion in the Institute’s Code of Ethics for Professional Accountants as appropriate.

HKICPA resource centre

Access resources and publications at the Institute’s Resource Centre to the Code which will keep you updated on the latest ethics pronouncements.

ISSB Implementation Insights podcast

This new podcast series is designed to share insights from the International Sustainability Standards Board (ISSB)’s Transition Implementation Group meetings, reflecting on questions from preparers and those using the ISSB Standards.

The first episode discusses why the Transition Implementation Group was set up and what the group aims to achieve, and shares the submissions made to the group and its members' insights.

Institute responds to Public Consultation on Legislative Proposals to Regulate Over-the-Counter Trading of Virtual Assets

The Institute issued a submission in response to the Financial Services and the Treasury Bureau (FSTB)’s Consultation Paper seeking market feedback on its proposed licensing regime for providers of over-the-counter (OTC) trading services of virtual assets (VA).

The Institute, in principle, supports FSTB’s proposals to widen the regulation of VA activities to cover OTC trading of VAs to better protect investors in Hong Kong and safeguard the reputation of Hong Kong’s financial system against fraud and money laundering. The Institute’s submission makes various comments on the specific questions including suggesting that the board or senior management team of a licensed VA OTC operator should include a full-time qualified accountant, to ensure the operator’s compliance with anti-money laundering/ counter-terrorist financing requirements, improve corporate governance safeguards and provide greater protection to investors.

Please refer to the submission for further details.

Joint CFIG-FSIG seminar: Navigating the Latest Regulatory Landscape of Virtual Assets in Hong Kong

CPA hour: 1 I 24 April

Exchange’s Consultation Conclusions on Proposed Amendments to Listing Rules Relating to Treasury Shares

On 12 April, the Stock Exchange of Hong Kong Limited (Exchange) released consultation conclusions to the above captioned consultation paper. The new treasury share regime will come into effect on 11 June.

The key proposals adopted include:

removing the requirement to cancel repurchased shares and issuers may hold the repurchased shares in treasury subject to the laws of their places of incorporation and their constitutional documents;
resale of treasury shares by an issuer to follow the Listing Rules that currently apply to an issue of new shares;
imposing a 30-day moratorium period to restrict (i) a resale of treasury shares after a share repurchase (subject to certain carve-out provisions); and (ii) an on-Exchange share repurchase after an on-Exchange resale of treasury shares; and
prohibiting a resale of treasury shares on the Exchange (i) when there is undisclosed inside information; (ii) during the 30-day period preceding the results announcement; or (iii) if it is knowingly made with a core connected person

The Institute issued a submission in response to this consultation on 22 December 2023, generally supporting the Exchange’s proposals. Please refer to the press release for details.

Inland Revenue Department – 2023/24 Profits Tax Filing

The Inland Revenue Department (IRD) issued 2023/24 profits tax returns to corporations and partnership businesses on 2 April 2024.

This is the second year in which the IRD has implemented arrangements for the voluntary e-filing of profits tax returns, so that taxpayers can e-file the returns together with the supporting documents (including financial statements and tax computations) in iXBRL format, on a voluntary basis.

To facilitate taxpayers in preparing the required iXBRL data files, the IRD is providing the IRD Taxonomy Package (the Taxonomy) and the IRD iXBRL Data Preparation Tools (including the Template Tool and Tagging Tool, collectively known as “the Tools”), which are available to be downloaded from the IRD website, free of charge. The Taxonomy and the Tools have been updated and enhanced this year. The major enhanced features include:

Adding a roll-over function
Increasing the gross income threshold for the use of the Template Tool from HK$2 million to HK$5 million

Meanwhile, the first Traditional Chinese edition of the Taxonomy and the Traditional Chinese Tools, which enable taxpayers to convert their traditional Chinese supporting documents into iXBRL data files, will also be launched.

Taxpayers are encouraged to participate in the voluntary e-filing of profits tax returns. More details can be found on the IRD’s webpages on e-filing of profits tax returns and iXBRL filing.

For enquiries in relation to the iXBRL filing requirements and the use of the Tools, you may contact the IRD, or access e-Appointment to book a specific timeslot to make enquiries via phone.

Benefits of e-filing

Minimizing errors in tax filing
Reducing the turnaround time for signature or authorization arrangements
Enhancing the efficiency, reliability and accuracy
Providing round-the-clock service

Announcements by the IRD

Members may wish to be aware of the following matters:

Announcements by the government

Members may wish to be aware of the following matters:

Anti-money laundering (AML) notices and news

AML notices:

The List of individuals and entities published under section 31 of the United Nations Sanctions (Democratic People’s Republic of Korea) Regulation (Cap.537AE) was updated on 16 April. See the relevant UNSC press release.
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:

How to establish and maintain effective work boundaries as an entrepreneur (and why it’s important) from Entrepreneur.com
How finance leaders can motivate their teams (and themselves) from Financial Management
The post-IPO checklist: 7 insights for CFOs from CFO.com
Building a resilient tomorrow: concrete actions for global leaders by McKinsey

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.

This email together with the file(s) transmitted is intended solely for addressee(s) only and may contain confidential or privileged information. If you received this email in error, please contact the sender and delete it together with its attachment(s) from your computer(s). You should note that the views expressed in this email are those of the author and do not necessarily represent those of the Institute. The recipient should check this email and all attachments for the presence of virus. The Institute will not accept liability for any damage caused by any viruses transmitted with this email.

Manage communication preferences | Privacy policy | Personal information | Contact us