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Your fortnightly technical updates newsletter (22 November 2023) |
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Members' Handbook |
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Handbook Update No. 302 relates to the publication of International Tax Reform — Pillar Two Model Rules (Amendments to the HKFRS for Private Entities). The amendments provide a temporary relief from accounting for deferred taxes arising from the implementation of the Organisation for Economic Cooperation and Development’s Pillar Two Model Rules, and clarify that the Standard requires companies that apply the HKFRS for Private Entities to disclose information that enables users of their financial statements to evaluate the nature and financial effect of income tax consequences of the Pillar Two legislation. Entities are required to apply the temporary exception immediately upon the issuance of the amendments and to provide the disclosures as set out in the amendments for annual reporting periods beginning on or after 1 January 2023. |
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Standard setting |
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Educational Publication: HKFRS 17 Insurance Contracts – Journal Entries on Reinsurance Contracts Held |
Following the previous publication, “HKFRS 17 Insurance Contracts – Journal Entries”, the Institute has issued another educational publication titled “HKFRS 17 Insurance Contracts – Journal Entries on Reinsurance Contracts Held”. This publication explains the key concepts of the accounting for reinsurance contracts held (RCH) under HKFRS 17 and provides illustrations of the journal entries for four simplified fact patterns of RCH transactions. These examples demonstrate how the journal entries impact an entity’s statement of financial position and statement of financial performance. |
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First annual assessment of HKSQM by 15 December 2023 |
In Alert 45, members are referred to the monitoring and remediation process and the requirement to evaluate a firm’s system of quality management under Hong Kong Standard on Quality Management (HKSQM) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements. HKSQM 1 has been in effect for almost a year. To ensure compliance with the HKSQM 1 requirements, firms should evaluate their system of quality management annually. The first of these evaluations must be performed by 15 December 2023, i.e., within one year after the effective date of HKSQM 1, and every year thereafter. Firms should ensure the evaluation be carried out according to paragraphs 53 to 56 of HKSQM 1, and maintain proper documentation regarding their evaluation, findings and conclusions. |
Industry update relating to investment funds |
The live webinar on 28 November will cover:
- Regulatory regime for SFC Type 13 Regulated Activity;
- Practical issues in relation to certification of funds for carried interest tax concession;
- Latest development of the eMPF Platform and relevant regulatory updates; and
- Accounting treatment for long service payment as a result of the passing of the Employment and Retirement Schemes Legislation (Offsetting Arrangement) (Amendment) Bill 2022.
Click here to learn more and register now. |
E-learning on HKSA 315 (Revised 2019) |
The on-demand e-learning, Implementing HKSA 315 (Revised 2019) – What you need to know, is now available. Register now to take a deep dive into selected areas of the standard and gain practical insight to implement the new requirements effectively. |
ISA for LCE is coming soon |
The International Auditing and Assurance Standards Board (IAASB) will release the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE) on 6 December, a new IAASB standard for financial audits of less complex entities. Watch the IAASB’s new video to learn more about it. |
FAQ on auditor’s responsibilities for general information technology controls |
This CPA Canada’s publication addresses common questions from auditors about general information technology controls (GITCs) in the audit of financial statements and auditors’ responsibilities related to GITCs throughout the audit. It provides auditors with considerations when obtaining an understanding of the IT environment, including GITCs for determining whether, when and how to test GITCs. |
The Institute’s Auditing and Assurance Standards Committee meeting |
Minutes of the 410th and 411th meetings are now available. |
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IESBA September meeting |
The highlights and decisions of the International Ethics Standards Board for Accountants (IESBA) September 2023 meeting is now available. |
HKICPA resource centre |
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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GRI establishes Sustainability Innovation Lab in coordination with the IFRS Foundation |
The Global Reporting Initiative (GRI) will launch the Sustainability Innovation Lab (SIL), in partnership with the IFRS Foundation as its Convening Partner. The goal of the SIL is to support stakeholders and all market participants on their disclosure journeys, guiding them to address disparities in sustainability reporting requirements while supporting the further harmonization of the reporting landscape at the global level. It will seek to streamline the process for companies that report on a multi-stakeholder basis. The SIL will also bring together global and local partners to advance capabilities for reporting using the GRI Standards and the IFRS Sustainability Disclosure Standards. In addition, representatives of GRI, the International Sustainability Standards Board and other key stakeholders will collaborate to identify emerging sustainability disclosure topics, developing concepts, best practices and data-driven solutions. |
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Advocacy and practice development |
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Announcements by the Inland Revenue Department |
Members may wish to be aware of the following matters:
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Announcements by the government |
Members may wish to be aware of the following matters:
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Anti-money laundering (AML) notices and news |
FATF publication on high-risk and other monitored jurisdictions The Financial Action Task Force (FATF) published a statement on 27 October regarding high risk jurisdictions subject to a call for action, calling on its members and all jurisdictions to apply specific measures and actions on Iran, the Democratic People's Republic of Korea and Myanmar. The FATF also issued a notice on jurisdictions under increased monitoring, referring to other jurisdictions that have been identified to have strategic deficiencies in their anti-money laundering/ counter-terrorist regimes and that are working with the FATF to address these deficiencies. Albania, Barbados, Burkina Faso, Cayman Islands, Democratic Republic of Congo, Gibraltar, Haiti, Jamaica, Jordan, Mali, Mozambique, Nigeria, Panama, Philippines, Senegal, South Africa, South Sudan, Tanzania, Türkiye, UAE, and Uganda had their progress reviewed by the FATF since October 2023 and updated statements are provided for these jurisdictions. Cameroon, Croatia, Syria and Vietnam chose to defer reporting. In addition, Bulgaria has been newly included on the list. Sanctions update
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Useful resources |
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Informative publications: |
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