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Standard setting
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Educational publication: Financial Reporting Considerations for Closing Out 2023
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The Institute has issued the educational publication Financial Reporting Considerations for Closing Out 2023. This publication aims to provide preparers with key reminders and insights for the preparation of their 2023 annual financial statements prepared under Hong Kong Financial Reporting Standards (HKFRSs). It discusses the topical financial reporting issues, the new and revised HKFRSs mandatorily effective from 1 January 2023 and the key amendments to HKFRSs that are effective on 1 January 2024. The considerations highlighted in the publication are also relevant for upcoming interim period-ends and financial year-ends.
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The Institute’s Financial Reporting Standards Committee meeting minutes
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Minutes of the December 2023 meeting is now available.
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Educational guidance on the accounting for crypto-assets
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Companies applying International Financial Reporting Standards (IFRS) Accounting Standards or HKFRS and holding cryptocurrencies are reminded to refer to the IFRS Interpretations Committee agenda decision Holdings of Cryptocurrencies for guidance on the accounting for cryptocurrencies.
The Institute has also previously hosted a webinar on the commonly seen accounting issues for crypto-assets and the accounting considerations for more complex issues. The webinar has been archived for members’ access. Enrol now if you missed the webinar.
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IASB February 2024 podcast & update
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The International Accounting Standards Board (IASB) podcast, with its chair, vice-chair and executive technical director highlighting the projects discussed during its February meeting, and a summary of the February meeting, are now available.
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Webcast series: the forthcoming IFRS Accounting Standard for subsidiaries
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In this webcast, Michael Stewart, Senior Expert of Financial Reporting at Huawei, joined the IASB technical staff member to discuss the expected benefits of the new IFRS Accounting Standard for eligible companies.
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Call for fieldwork participants—impairment of financial assets in the IFRS for SMEs Accounting Standard
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The IASB is considering feedback on its proposals in the Exposure Draft Third edition of the IFRS for SMEs Accounting Standard, including the introduction of an expected credit loss model to account for the impairment of financial assets.
The IASB has made tentative decisions on the application of the expected credit loss model by SMEs and is now inviting preparers and users of financial statements using the IFRS for SMEs Accounting Standard to take part in the fieldwork that will explore the potential effects of the IASB’s tentative decisions. The results of the fieldwork will be considered by the IASB as part of its redeliberation of the proposals in the Exposure Draft.
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Invitation to comment
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The Institute is seeking comments on the International Auditing and Assurance Standards Board (IAASB) Exposure Draft on
Proposed Narrow Scope Amendments to International Standards on Quality Management (ISQMs); International Standards on Auditing (ISAs); and International Standard on Review Engagements (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 (PIE) in the IESBA Code by 8 March.
Key proposed revisions include extending the scope of the entities included under the ISQMs and the ISAs such that they will be subject to:
- Engagement quality reviews;
- Providing transparency in the auditor’s report on specific aspects of the audit, including auditor independence, communicating key audit matters, and the engagement partner’s name; and
- Communicating with those charged with governance to help them fulfill their responsibility overseeing the financial reporting process, (e.g., communicating about quality management and auditor independence).
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 by 5 May. Proposed revisions include:
- Clarified auditor responsibilities relating to fraud in an audit;
- Emphasized professional skepticism;
- Strengthened identification and assessment of risks of material misstatement due to fraud;
- Clarified response to fraud or suspected fraud;
- Increased ongoing communication with management and those charged with governance about fraud;
- Increased transparency about auditors’ responsibilities and fraud-related procedures in the auditor’s report; and
- Enhanced audit documentation.
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The State of Play: Sustainability Disclosure and Assurance 2019-2022, Trends and Analysis
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The study by the International Federation of Accountants (IFAC) highlights the need for companies worldwide to move toward a global system of sustainability disclosure requirements and indicates that while the frequency of reporting ESG information is very high and the incidence of assurance is on an upward trend, there continues to be a meaningful difference between reporting and assurance rates:
- 98% of companies reported some level of detail on sustainability;
- 69% obtained assurance on at least some of their sustainability disclosures;
- The mix of reporting standards used by companies remains fragmented.
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Invitation to comment
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The Institute is seeking comments on the following Exposure Drafts issued by the International Ethics Standards Board for Accountants (IESBA) on:
Using the Work of an External Expert by 30 March which proposes an ethical framework to guide professional accountants or sustainability assurance practitioners, as applicable, in evaluating whether an external expert has the necessary competence, capabilities and objectivity in order to use that expert’s work for the intended purposes. The proposals also include provisions to aid in applying the Code’s conceptual framework when using the work of an external expert. Watch the IESBA’s webinar to understand more about the exposure draft!
International Ethics Standards for Sustainability Assurance (including International Independence Standards) (IESSA) and Other Revisions to the Code Relating to Sustainability Assurance and Reporting by 10 April. The Exposure Draft proposes a clear framework of expected behaviors and ethics provisions for use by all sustainability assurance practitioners regardless of their professional backgrounds, as well as professional accountants involved in sustainability reporting. Members may be interested in the following resources provided by the IESBA for the proposals:
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HKICPA resource centre
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Access resources and publications at the Institute’s Resource Centre to the Code which will keep you updated on the latest ethics pronouncements.
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The Institute issues Alert on updates on its Sustainability Disclosure Standards development
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The Institute has issued Alert - Issue 49: Updates on the Institute's Sustainability Disclosure Standards development to provide members with an update on the progress of its standard-setting work and bring member’s attention to local and international developments in the area of sustainability reporting, capacity building efforts, and next steps.
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ISSB February 2024 podcast & update
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Featuring its chair and vice-chair, the International Sustainability Standards Board (ISSB) podcast discusses the key takeaways from the February 2024 meeting, the ISSB's capacity building programme and the Preview of the Inaugural Jurisdictional Guide for the adoption or other use of ISSB Standards. In addition, a summary of the February 2024 meeting is now available.
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IFRS Sustainability Symposium convenes in New York City as market participants get ready to use the ISSB Standards
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Around 1,000 companies, investors, regulators and other key stakeholders from over 50 jurisdictions met at the IFRS Sustainability Symposium in New York City to exchange insights on the introduction of the ISSB Standards globally.
Adoption of the ISSB Standards is happening through two key routes. Find out more in this article.
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IFRS Foundation webcast highlights importance of industry-specific disclosures to investors
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In this webcast, Elizabeth Seeger, ISSB member, together with two investors, discuss key reasons why investors use industry-specific information in their analysis and decision-making, and why industry-specific requirements are an important feature of the ISSB Standards.
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New resources supporting the implementation of the ISSB Standards
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The IFRS Foundation has recently published the following new resources as part of capacity building for the implementation of ISSB Standards:
- Using the SASB Standards to meet the requirements in IFRS S1 provides guidance on how companies can consider the content in the Sustainability Accounting Standards Board (SASB) Standards to meet the requirements in IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information. IFRS S1 requires a company to disclose material information about all sustainability-related risks and opportunities that could reasonably be expected to affect the company’s cash flows, its access to finance or cost of capital over the short, medium or long term. IFRS S1 references the SASB Standards as a source of guidance that companies are required to consider when identifying sustainability-related risks and opportunities and determining the information to disclose about those risks and opportunities.
- How to apply the Integrated Reporting Framework with IFRS S1 and IFRS S2: A mapping tool maps IFRS S1 and IFRS S2 Climate-related Disclosures core content disclosure requirements to the Integrated Reporting Framework content elements, showing one possible way to incorporate IFRS S1 and IFRS S2 disclosures within an integrated report. Nevertheless, the mapping does not capture all disclosures required by IFRS S1 and IFRS S2.
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