Your fortnightly technical updates newsletter (25 November 2020)

Standard setting

November 2020 IASB podcast and update

The November podcast, focusing on the International Accounting Standards Board (IASB) at its monthly meeting, and the November IASB Update, highlighting the tentative decisions reached at the IASB monthly meeting and discussions from the Joint IASB and Financial Accounting Standards Board education meeting held on 19 November, are now available.

Q&A for Hong Kong Interpretation 5 (2020) Presentation of Financial Statements – Classification by the Borrower of a Term Loan that Contains a Repayment on Demand Clause

The Institute has published questions and answers for Hong Kong Interpretation 5 (2020) Presentation of Financial Statements – Classification by the Borrower of a Term Loan that Contains a Repayment on Demand Clause, which was revised in October 2020 as a consequence of the amendments to Hong Kong Accounting Standard 1 Presentation of Financial Statements introduced by Classification of Liabilities as Current or Non-current in August 2020. The amendments clarify how to classify debt and other liabilities as current or non-current but do not change the existing requirements, are effective for annual periods beginning on or after 1 January 2023, and apply retrospectively, with earlier application permitted.

IASB educational material on the effect of climate related matters on financial statements prepared under IFRSs

The IASB has issued educational material highlighting how climate-related matters should be considered when companies prepare financial statements using International Financial Reporting Standards (IFRSs). The education material complements an article an IASB member wrote in November 2019, and includes a non-exhaustive list of examples of when companies may need to consider climate-related matters in their reporting. The education material is aimed at supporting the consistent application of IFRSs, and does not add to or change the requirements in IFRSs.

Invitation to comment

The Institute is seeking comments on:

Exposure Draft Practice Note 820 (Revised) The Audit of Licensed Corporations and Associated Entities of Intermediaries by 30 November
Exposure Draft Technical Bulletin AATB 5 Environmental, Social and Governance (ESG) Assurance Reporting by 2 December
Exposure Draft Practice Note 730 (Revised) Guidance for Auditors Regarding Preliminary Announcements of Results by 20 December
The International Auditing and Assurance Standards Board (IAASB) Discussion Paper Fraud and Going Concern in an Audit of Financial Statements: Exploring the Differences Between Public Perceptions About the Role of the Auditor and the Auditor’s Responsibilities in a Financial Statement Audit by 31 December.

IAASB November virtual meeting

The meeting audio of the IAASB November virtual meeting is now available.

IAASB’s videos on quality management standards

The IAASB has published video introductions to the new and revised quality management standards explaining the key aspects of the three standards to help stakeholders begin their implementation efforts.

IAASB’s support material on using automated tools and techniques when identifying risks of material misstatement

The IAASB has published non-authoritative frequently asked questions assisting auditors to understand the types of automated tools and techniques that can be used, and how they can be used, in performing risk assessment procedures in accordance with International Standard on Auditing 315 (Revised 2019) Identifying and Assessing Risks of Material Misstatement.

IAASB’s key takeaways from roundtable series on fraud and going concern

This IAASB’s publication summarizes key themes and insights from the virtual roundtables previously held on issues and challenges related to fraud and going concern which comprise one aspect of the IAASB’s broader information-gathering activities related to fraud and going concern that will be considered in determining possible future actions.

IESBA new role and mindset fact sheet

The International Ethics Standards Board for Accountants (IESBA) has released a new fact sheet providing an overview of the recently released revisions to the International Code of Ethics for Professional Accountants (including International Independence Standards) to better promote the role and mindset expected of all professional accountants.

Recordings of the webinar on Sustainability Reporting

Recordings are now available for the two webinars held by the IFRS Foundation Trustees to discuss their Consultation Paper on Sustainability Reporting. The Institute is also seeking comments on the paper by 30 November.

Advocacy and practice development

Invitation to comment

On 16 November, the Stock Exchange of Hong Kong Limited (HKEX) launched a Concept Paper on Fast Interface for New Issuance, proposing to streamline the initial public offering (IPO) settlement process. In particular, the time gap between IPO pricing and trading may be shorted from five business days to one business day.

The deadline for submissions to the HKEX is 15 January 2021. Please refer to the press release for details.

Disqualification of Directors – Revised Arrangement on Submission of Form D1 and Form D2

The Official Receiver (OR) issued ORO Circular No.2/2020, on 12 November, setting out a revised arrangement on submission of Forms D1 and D2 by provisional liquidators/ liquidators to the OR, which includes submitting a questionnaire when filing a Form D1. The circular is effective from 1 December 2020.

Announcements by the Inland Revenue Department

Members may wish to be aware of the following matters:

Announcements by the government

Members may wish to be aware of the following matters:

AML notices

The United Nations Sanctions (Mali) Regulation 2019 (Amendment) Regulation 2020 and the United Nations Sanctions (Central African Republic) Regulation 2020 (Amendment) Regulation 2020 were gazetted on 10 November.

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:

A year of evolution: CFOs on 2021 from Financial Management
Make tax planning a part of your company’s risk management strategy from Harvard Business School
How to fight the groupthink that happens when we work virtually from Fast Company
Your top 6 automation questions answered by AICPA
Whole Foods CEO John Mackey: How to ‘devastate employee morale’ in a single blow from CNBC
9 tips for successful auditing of revenue recognition from Journal of Accountancy

Install the HKICPA Events app

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