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Consultation Paper on Financial Reporting by Private Companies

(A) Summary


The consultation period expired on 30 September 2008 and a total of 122 written comment letters and responses to questionnaires were received. Six have indicated non-disclosure.


The Financial Reporting Standards Committee (FRSC) at its meeting in November 2008 has considered the comment letters received and noted that most of the comments received confirmed general support for providing relief to private companies from applying full HKFRSs and providing an option to large private companies to choose a simpler reporting framework. However, diverse opinions were expressed in terms of how these might be achieved.


The Chairman of the FRSC advised that the diverse opinions expressed is understandable given that the Consultation Paper did not set out clear recommendations, but merely asked for views based on several options. Furthermore, the IASB ED on IFRS for SMEs in existence at the time of consulting was rather complicated and at that time did not appear to provide an easy answer. This position is expected to change. The limitation of the cost based SME-FRF & FRS when applying it to a large private entity was also not highlighted sufficiently. With hindsight, it was generally agreed that the Consultation Paper was premature. In anticipation of the release of IFRS for Private Entities (name changed from IFRS for SMEs) by the end of 2008, the FRSC decided at its November 2008 meeting to defer the discussion of the way forward in respect of the private company financial reporting framework.


The FRSC meeting summaries are posted at the Institute's website. Click here to view the November 2008 meeting summary.


(B) Comment letters received


LetterOrganisations / Submitter


Arthur Lam & Co CPA
CL3: Audit Commission
CL4: CCIF CPA Limited
CL6: Companies Registry
CL7: Eric Fok
CL8: Financial Services and The Treasury Bureau
CL9: Grant Thornton
CL10: Inland Revenue Department
CL11: K. H. Lau & Co
CL12: KCS Hong Kong Limited
CL13: Mandatory Provident Fund Schemes Authority
CL14: Nexia Charles Mar Fan & Co
CL15: Official Receiver's Office
CL16: The British Chamber of Commerce in Hong Kong
CL17: The Chinese General Chamber of Commerce
CL18: The DTC Association
CL19: The Hong Kong Association of Banks
CL20: The Society of Chinese Accountants & Auditors
CL21: The Stock Exchange of Hong Kong Ltd
CL22: Wong Wing Cheong, Dennis
CL23 - 34: Questionnaires received from Institute's website
CL35 - 110 Questionnaires received from SMPC Forum
CL111 - 116 Questionnaires received from other Institute's events