Financial Reporting Advisory

Financial Reporting Advisory

Every business faces a financial reporting or accounting issue at some point when preparing their financial reports. In these situations, expert advice underpinned by an in-depth understanding of the financial reporting standards (International Financial Reporting Standards (IFRS) or Hong Kong Financial Reporting Standards (HKFRS), as applicable) is crucial.

BDO has one of the largest technical accounting divisions in Hong Kong, with a number of its team members closely connected with BDO International’s global IFRS team.

Via our extensive global network, BDO is at the forefront of IFRS/HKFRS reporting and implementation.  

Our service offering in each technical area includes:
•    Specialist technical advice
•    Implementation services of new accounting standards
•    Forensic / expert witness services in application of accounting standards
•    Training
•    Preparation of accounting manuals and policies
•    Advising on financial statements presentation and disclosure


Financial Reporting Advisory Services 

New accounting standards

Hong Kong financial reporting is poised to go through the biggest upheaval since International Financial Reporting Standards were fully adopted in 2005, with the introduction of a number of new standards that will significantly change the financial reporting landscape for entities in different industry sectors.

We can help you by guiding you through the maze of these new standards and support your implementation team to develop interpretations of the new requirements.


New insurance standard, HKFRS 17 Insurance contracts

The newly issued insurance standard is presumably the biggest game changer in the history of insurers’ accounting. For most insurers, they will adopt HKFRS 9 together with HKFRS 17 to minimise accounting mismatch. The reporting of financial results will change significantly under HKFRS 17, with new requirements to evaluate insurance contract liabilities based on current estimates of fulfilment cash flows, risk adjustment methodology and contractual service margin. The changes will bring particular impacts on how loss-making business and reinsurance contracts are reported.

Effective date - Mandatory for periods beginning on or after 1 January 2023. 


New leases standard, HKFRS 16 Leases

For lessees the new standard does away with the current operating/finance lease distinction, requiring lessees to recognise all but low value leases on the balance sheet as a right of use asset and a corresponding lease liability. The operating lease rental expense will be replaced by an amortisation charge for the right of use asset and a finance cost. 

Effective date - Mandatory for periods beginning on or after 1 January 2019. 


New revenue standard, HKFRS 15 Revenue from Contracts with Customers

The new standard’s core principle requires entities to recognise revenue to depict the transfer of promised goods or services to customers in amounts that reflect the consideration (payment) to which the entity expects to be entitled in exchange for those goods or services.

This new standard significantly increases complexity around the recognition of revenue, meaning that in a significant number of industries the invoiced amount will not correspond to the pattern of revenue recognition.

Effective date - Mandatory for periods beginning on or after 1 January 2018.

New financial instruments standard, HKFRS 9 Financial Instruments

The objective of the new standard is to simplify the accounting for financial instruments. HKFRS 9 applies to general purpose financial statements prepared in accordance with HKFRS.

This new standard applies to financial instruments including, cash, trade receivables, trade payables, investments in shares etc. The standard introduces significant changes to the classification and measurement of financial assets, how impairment losses are recognised and the rules around qualifying to apply hedge accounting.

Effective date - Mandatory for periods beginning on or after 1 January 2018.


HKFRS/IFRS updates


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Simon Riley

Director and Head of Financial Reporting Advisory and Quality Assurance
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