NAVIGATION

MEMBERS' HANDBOOK

Handbook Update No. 328 relates to the issuance of the revised HKFRS for Private Entities Accounting Standard (HKFRS for PE). This update aims to improve the information provided to users of financial statements of private entities while maintaining the simplicity of the Standard. Major amendments include:

A revised model for revenue recognition;
Updating the requirements for business combinations, consolidations and financial instruments; and
Bringing together the requirements for fair value measurement in a single location.

The Key Impact supporting material summarizes the major amendments to HKFRS for PE and their implications on local entities currently applying the extant HKFRS for PE in their financial statements.

The revised HKFRS for PE is effective for annual periods beginning on or after 1 January 2027, with early application permitted.

Handbook Update No. 329 issues The Hong Kong Standard on Auditing for Audits of Financial Statements of Less Complex Entities (HKSA for LCE). It is based on the International Auditing and Assurance Standards Board’s (IAASB) International Standard on Auditing for Audits of Financial Statements of Less Complex Entities.

This standard is tailored for smaller, less complex businesses and organizations. To ensure proper application of the HKSA for LCE in Hong Kong context, the Institute’s Auditing and Assurance Standards Committee (AASC) has modified the Authority of the standard, which sets out the intended scope of the HKSA for LCE, by (i) adding or modifying the classes of entities prohibited from using the HKSA for LCE; and (ii) establishing quantitative thresholds for its application. The Basis for Conclusions summarizes the AASC’s considerations for these local modifications and discusses mandatory disclosure requirements for the auditor’s name and practising certificate number in auditor’s reports under the HKSA for LCE. It also includes an impact analysis of key areas auditors should consider when applying the standard in audit engagements.

The HKSA for LCE is effective for audits of financial statements of less complex entities for periods beginning on or after 15 December 2025. Early adoption is permitted. To support understanding and implementation, the AASC has developed a FAQ document. Additional resources are available in the Institute's online resource center.

Reminder - Institute live webinar on HKFRS 18 - Practical Insights for Implementation

HKFRS 18 introduces new requirements that will affect all companies across various industries regarding the presentation and disclosure of financial performance in their financial statements. The live webinar on 28 May will provide a brief recap of the key requirements of HKFRS 18 and highlight the likely impact on companies in Hong Kong, as well as how they should prepare for implementation in 2025/26. In particular, the speaker will address practical issues and challenges in the following areas:

Presentation and disclosures of expenses classified in the operating category;
Determination of main business activities and specified main business activities;
Determination of categories of income and expenses for specific transactions and scenarios;
Determination of management-defined performance measures and related disclosures; and
Classification of interest and dividend cash flows in the statement of cash flows.

IASB April 2025 podcast

In this podcast, an International Accounting Standards Board (IASB) member and the Executive Technical Director discuss highlights from the April IASB meeting. Topics discussed include Business Combinations—Disclosures, Goodwill and Impairment and Climate-related and Other Uncertainties in the Financial Statements.

Q1 2025 IFRS Interpretations Committee podcast

In this podcast, the IFRS Interpretations Committee’s Chair Bruce Mackenzie and member  Lisa Bomba discuss the decisions made at the March Committee meeting.

Invitation to comment

The Institute invites comments on the IAASB's Exposure Draft Proposed Narrow-Scope Amendments to IAASB Standards Arising from the International Ethics Standards Board for Professional Accountants’ (IESBA) Using the Work of an External Expert Project by 24 June. These proposed narrow-scope amendments aim to maintain interoperability between IAASB standards and the IESBA’s International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), addressing recent revisions to the IESBA Code related to using the work of external experts.

A new milestone in sustainability assurance

In March, the Institute published its first sustainability assurance standard: HKSSA 5000 General Requirements for Sustainability Assurance Engagements, making a significant milestone that aligns with the Hong Kong government’s Roadmap on Sustainability Disclosure in Hong Kong released in December 2024. Read the latest A Plus article for an overview of HKSSA 5000.

Navigating tariffs for auditors

The recent broad set of tariffs imposed by the United States on imports from various countries introduces new complexities for businesses engaged in international trade. To assist auditors, the Accounting and Financial Reporting Council has published essential reminders based on reporting periods along with other audit considerations. Additionally, an article from the Institute of Chartered Accountants in England and Wales’ outlines four key considerations for auditors, focusing on risk assessment, financial reporting, audit evidence and documentation, and disclosure and communication.

HKICPA technical training on auditing and assurance

Join the Institute’s upcoming technical training workshops and webinars designed to enhance your auditing knowledge.

Face-to-face workshop for audit managers/seniors in-charge (14, 15, and 21 May): Focuses on advanced topics such as risk assessment procedures, auditing accounting estimates, and going concern assessments.
Face-to-face workshop for new auditors (13, 19, and 20 June): Covers core concepts and practical skills essential for financial statement audits, sharing relevant experiences for new auditors.
HKICPA sustainability assurance webinar (12 June): Offers a comprehensive overview of HKSSA 5000, including fundamental principles, engagement acceptance, and group sustainability assurance engagements.
Live webinar: Navigating assurance and AUP standards (18 June): Enhances understanding of HKSAE 3000 (Revised) and HKSRS 4400 (Revised), discussing key requirements and common pitfalls.

Updates on the IAASB projects

The IAASB is actively advancing several important projects aimed at enhancing auditing and assurance standards. To stay informed, check out the IAASB latest updates on projects, including:

Discussions on the Audit Evidence and Risk Response project which involves concurrent revisions of ISA 500, Audit Evidence, ISA 330, The Auditor’s Responses to Assessed Risks, and ISA 520, Analytical Procedures.
Publication of ISA 570 (Revised 2024), Going Concern. Effective for audits of financial statements for periods beginning on or after 15 December 2026 , the revised going concern standard aims to promote consistent practice and behavior from auditors when addressing going concern. The Institute will follow its due process for the convergence and adoption of the standard.
Approval of ISA 240 (Revised), The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements. The IAASB expects to publish this standard in July 2025, with an effective date for audits of financial statements for periods beginning on or after 15 December 2026. The Institute will follow its due process for the convergence and adoption of the standard.
To support effective implementation of ISSA 5000, the IAASB invites stakeholders to submit implementation questions or matters for the IAASB’s consideration. More details and a submission form can be found on the ISSA 5000 web page.

The Institute’s Auditing and Assurance Standards Committee meeting minutes

Minutes of the 424th meeting is available.

Invitation to comment

The Institute invites comments on the IESBA Consultation Paper: Collective Investment Vehicles and Pension Funds by 30 May.

The consultation seeks views on auditor independence matters pertaining to the audits of Investment Schemes that involve external parties. It also aims to inform the IESBA’s consideration of whether its International Independence Standards are sufficiently clear and fit for purpose for such audits.

HKICPA resource centre

Access resources and publications at the Institute’s Resource Centre to the Code where you can stay informed about the latest ethics pronouncements. Watch this video to learn how to easily access these valuable resources.

Invitation to comment

The Institute is seeking comments on the International Sustainability Standards Board (ISSB) Exposure Draft Amendments to Greenhouse Gas Emissions Disclosures—Proposed amendments to IFRS S2 Climate-related Disclosures by 27 May.

Reminder – HKFRS SDS Workshop: Climate risk and opportunities, Scenario analysis & Anticipated Financial Effects

Join our upcoming workshop on 21 May to explore the challenging areas identified in our previous consultations on IFRS/HKFRS Sustainability Disclosure Standards (SDS). During this workshop, speakers will delve into the following areas and share insights on practical applications using illustrative examples and case studies:

Climate risk and opportunities;
Scenario analysis;
Anticipated financial effects;
Introduction of industry-based disclosure requirements and their importance; and
Proportionality relief.

Electronic filing of 2024/25 individual tax returns – Convenience with eTAX

The Inland Revenue Department (IRD) encourages taxpayers to consider filing their tax returns through the IRD’s eTAX gateway to enjoy personalized online tax services. To save paper, taxpayers can also select to receive electronic notices and documents.

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 workshops:

The coming AML workshops (in Cantonese) will provide the latest updates and practical guidance on complying with AML requirements. Part I will be held on 2 June, followed by Part II on 27 June.

Anti-Money Laundering and Counter-Terrorist Financing Series - Latest updates and practical guidance on implementing AML/ CFT requirements (re-run)
CPD hour: 4 I 2 & 27 June

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.

Other AML news:

Publications from other organizations:

Accounting role outsourcing drops 25% YoY despite lingering talent issues from CFO.com
Your business doesn't need to be perfect – Here's how customer loyalty really works from Entrepreneur.com
Excel modelling: how to implement 3 types of checks from Financial Management
How CPAs can combat the rising threat of deepfake fraud from Journal of Accountancy
In a moment of tariffs, can the world find balance and trust to thrive? by McKinsey & Company

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