Annual Improvements to HKFRSs Cycle

Transcription

1 Annual Improvements to HKFRSs Cycle January Newsletter Issue No. 1/2014 MAIN FEATURES Background Amendments related to the following standards: HKAS 16 Property, plant and equipment HKAS 24 Related party disclosures HKAS 38 Intangible assets HKFRS 2 Share-based payment HKFRS 3 Business combinations HKFRS 8 Operating segments HKFRS 13 Fair value measurement In order to maintain coverage with IFRSs, the HKICPA has issued Annual Improvements to HKFRSs Cycle to incorporate the amendments to the seven standards. These amendments are identical as the revised IFRSs issued by IASB in December Apply the amendments for annual periods beginning on or after 1 July 2014 unless otherwise stated. Early application is permitted. 1 SHINEWING (HK) CPA Limited - Newsletter January 2014

2 What are the amendments? The following table lists out the areas addressed by the amendments to seven standards: HKFRS / HKAS Subject of amendment Before amendments Summary of amendments HKAS 16 Revaluation method When an asset is Clarify the gross proportionate restatement revalued, the carrying amount is of accumulated accumulated restated in a manner depreciation depreciation at the consistent with the date of the revaluation of the HKAS 38 Revaluation method revaluation is restated carrying amount after proportionate restatement proportionately with taking into account of accumulated the change in the accumulated amortization gross carrying impairment losses. amount so that the carrying amount The accumulated equals its revalued depreciation / amount after amortization is the revaluation. difference between the gross and the net carrying amounts. An entity is required to apply to amendments to all revaluations recognised in the annual period and in the immediately preceding annual period. An entity is permitted, but not required to restate any earlier periods presented. 2 SHINEWING (HK) CPA Limited - Newsletter January 2014

3 HKAS 24 Key management N/A The definition of related personnel party is extended to include an entity or a member of its group provides key management personnel services to the reporting entity ( Management Entity ). A separate disclosure is required for the service fee paid or payable to the Management Entity. Disclosure of the categories of such compensation is not required. HKFRS 2 Definition of vesting Definition of Add definitions for condition performance performance condition condition and and service condition service condition separately. are included within Further clarify: the definition of (a) a performance target is vesting condition defined by reference to the entity s own operations (or activities) or the price (or value) of its equity instruments; 3 SHINEWING (HK) CPA Limited - Newsletter January 2014

4 (b) a performance target relates either to the performance of the entity as a whole or to some part of the entity, such as a division; (c) If the counterparty, regardless of the reason, ceases to provide service during the vesting period, the counterparty has failed to satisfy the service condition; (d) a service condition does not require a performance target to be met; and (e) performance condition might include a market condition. Apply prospectively to share-based payment transactions with a grant date on or after 1 July SHINEWING (HK) CPA Limited - Newsletter January 2014

5 HKFR 3 Accounting for Contingent Clarify contingent contingent consideration consideration that is consideration in a classified as an asset classified as an asset or a business combination or a liability that is a liability should be financial instrument measured at fair value at and is within the each reporting date, scope of HKFRS 9 or regardless of whether it HKAS 39 shall be is a financial instrument measured at fair within the scope of value. HKFRS 9 or HKAS 39 or a non-financial Contingent instrument. consideration is not within the scope of Apply prospectively to HKFRS 9 shall be business combination for accounted for in which the acquisition accordance with date is on or after 1 July HKAS 37 or other HKFRSs as appropriate. Early application is permitted provided that HKFRS 9 and HKAS 37 (both as amended by Annual Improvements to HKFRSs cycle) have also been applied. 5 SHINEWING (HK) CPA Limited - Newsletter January 2014

6 HKFRS 8 (a) Aggregation of N/A Disclose the judgements operating segments made by management in applying the aggregation criteria to operating segments, including a brief description of the aggregated operating segments and the economic indicators that have been assessed in determining that they share similar economic characteristics. (b) Reconciliation of the An entity shall Clarify only applicable to total of the provide reconciliation those segments assets that reportable segments of the total of the are regularly reported to assets to the entity s reporting segments the chief operating assets assets to the entity s decision maker. assets 6 SHINEWING (HK) CPA Limited - Newsletter January 2014

7 HKFRS 13 Short-term receivables and payables N/A Clarify the issuance of HKFRS 13 and consequential amendments to HKFRS 9 and HKAS 39 did not intend to change practice in the measurement of those short-term receivables and payables. If the short-term receivables and payables with no stated interest rate at invoice amounts, they are measured without discounting is still allowable provided that the effect of not discounting is immaterial. 7 SHINEWING (HK) CPA Limited - Newsletter January 2014

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