Members’ handbook update no. 219
Update no. 219 contains amendments to accounting standards that are effective for annual reporting periods beginning on or after 1 January 2018.
Financial Reporting Standards Committee minutes
Summary of the 244th meeting of the Financial Reporting Standards Committee is now available.
Court-free amalgamation Q&As
The Institute published questions and answers relating to accounting for court-free amalgamations.
Invitation to comment
The Institute is seeking comments on the International Accounting Standards Board (IASB) Discussion Paper DP/2018/1 Financial Instruments with Characteristics of Equity by 9 November.
World Standard Setters Conference
At the International Financial Reporting Standards (IFRS) World Standard Setters Conference on 1 and 2 October, the Institute’s standard setting team participated in discussions on crypto-currencies and used the new Conceptual Framework published in June to consider how to account for them. The agenda papers and recordings of all discussions can be found on the IFRS Foundation website.
International Forum of Accounting Standard Setters
At the International Forum of Accounting Standard Setters (IFASS) on 2 and 3 October, the Institute’s standard setting team shared:
- Hong Kong stakeholders’ experiences on using the predecessor method to account for business combinations under common control (BCUCC), in a joint presentation with the Italian standard setter. Other global standard setters confirmed that the predecessor method is widely applied in the absence of a standard on BCUCC.
- IFRS/HKFRS 17 Insurance Contracts implementation progress in Hong Kong, issues raised by local stakeholders and staff observations, in a joint presentation with the Canadian and Korean standard setters. Together, we expressed our commitment to one global effective date.
- September IASB Update
- September IFRIC Update
- Final webcast in a series relating to the IASB Discussion Paper Financial Instruments with Characteristics of Equity
Professional accountants in business
How the distinct roles of internal audit and the finance function drive good governance
Effective governance involves many individuals throughout an organization, including internal audit and the finance function. International Federation of Accountants (IFAC) and The Institute of Internal Auditors have compiled insights from 11 governance experts to examine how the complementary roles of both functions drive sound governance.
The report identifies several key requirements for effective governance, including:
- An ethical corporate culture that empowers effective leaders throughout the organization to carry out good governance processes;
- Effective communication and collaboration among the various roles; and
- Requisite competencies for internal audit and the finance and accounting functions to earn stakeholder support and respect.
New CPD series on business startup
This new series of seminars from September to November address the perspectives of both the entrepreneurs as well as investors such as venture capitalists and business angels in funding the investee business, the legal implications of founding a startup and the key elements leading to a sustainable business.
There is also a related experience sharing and networking event – the Entrepreneurs Sharing Forum, where a panel of entrepreneurs will share insights and stories about building a sustainable and successful business.
New CPD Series on China Today
The new China Today Series provides members with some insights into how we are connected with China’s development – and can gain from it.
The seminars and workshops in the series run from October to December and aim to address the latest developments in China ranging from an overview of the economic outlook, to exploring new business opportunities both inside and outside China, and the continued opening up of the Chinese economy to the world.
Small and medium practitioners
Institute launches Practice Management Series of Seminars for SMPs
The Institute is holding four seminars on practice management from October to December to help small and medium practitioners better prepare for the challenges and opportunities ahead of them, and to adapt to future changes, improve their management and operational efficiency, as well as support their sustainability and help them achieve a successful future.
As reported in TechWatch Issue 188, members are encouraged to read the Guide to Practice Management for Small- and Medium-Sized Practices (Fourth Edition) recently updated by IFAC to adopt “good practices” in order to better serve their clients.
SFC announces green finance strategic framework
The Securities and Futures Commission (SFC) announced a Strategic Framework for Green Finance for supporting the development of green finance in Hong Kong on 21 September. The SFC will enhance listed companies’ disclosure of environment information, encourage asset managers take environment criteria into consideration of the investments, work closely with the Hong Kong Exchanges and Clearing Limited (HKEX) on listing and trading of green financial products and increase investors’ awareness in this aspect.
HKEX consultation on suspension of issuers with disclaimer or an adverse audit opinion
On 28 September, HKEX released a consultation paper to seek views on proposals to suspend issuers with disclaimer of opinions or adverse audit opinions on their financial statements from trading. Issuers can resume for trading if the related issues are rectified and sufficient information is disclosed to investors. The current proposals aim to enhance investor protection by improving the quality and reliability of financial information released by the issuers. A summary of the proposals is set out in the press release.
The deadline for responding to the consultation paper is 30 November.
Announcements by the Inland Revenue Department
Members may wish to be aware of the following matters:
- Automatic exchange of financial account information in tax matters between the Mainland and HKSAR now in force.
- Advance Ruling Case (No. 65) on company amalgamations published.
- Stamp Duty statistics (August 2018).
Legislation and other initiatives
Anti-money laundering notices
Members should note the following notices and publications in relation to anti-money laundering and counter-terrorist financing (AML/CFT):
- Government notice 7033: An updated list of terrorists and terrorist associates has been specified under the United Nations (UN) Sanctions (Libya) Regulation 2011 (Cap. 537 sub. Leg. AW).
- Legal notice 157: The United Nations Sanctions (ISIL and AI-Qaida) Regulation 2018 has been published in the Gazette.
- Government notice (extraordinary) 53: An updated list of terrorists and terrorist associates has been specified under the United Nations (Anti-Terrorism Measures) Ordinance (Cap. 575).
- Specially designated nationals and blocked persons list, published by the United States Treasury’s Office of Foreign Assets Control. More details on the Resource Centre of the Treasury.
Members should also refer to the relevant page of the website of the Commerce and Economic Development Bureau and the Institute’s AML webpage for further information and notices on sanctions and related matters.
For mandatory guidance and information on the AML/CFT requirements for members, see the Institute’s “Guidelines on Anti-Money Laundering and Counter- Terrorist Financing for Professional Accountants.”
Members who are licensed trust or company service providers should also see the Guideline on Compliance of Anti-Money Laundering and Counter- Terrorist Financing Requirements for Trust or Company Service Providers, by Companies Registry.
Members should be aware of the Hong Kong Money Laundering and Terrorist Financing Risk Assessment Report (in particular Chapter 6, covering designated non-financial businesses and professions), which indicates risks and vulnerabilities in the Hong Kong market.
Please refer to the full version of TechWatch 192