Investor Presentaiton
Effective
date*
Table B2:
Appendix B
New and amended HKFRSS
1 January
2024
1 January
2024
1 January
2024
1 January
2025
To be
determined
Amendments to HKFRSS which are not yet mandatory for annual periods beginning 1 January 2023 but may be
adopted early
Amendments to HKAS 1,
Presentation of financial
statements (issued in August 2020)
"Classification of liabilities as
current or non-current"
Amendments to HKAS 1,
Presentation of financial
statements (issued in December
2022)
"Non-current liabilities with
covenants"
Amendments to HKFRS 16, Leases
"Lease liability in a sale and
leaseback"
Amendments to HKAS 7,
Statement of cash flows and HKFRS
7, Financial instruments:
disclosures
"Supplier finance arrangements"
Amendments to IAS 21, The effects
of changes in foreign exchange
rates
"Lack of exchangeability"¹
Amendments to HKFRS 10,
Consolidated financial statements
and HKAS 28, Investments in
associates and joint ventures
"Sale or contribution of assets
between an investor and its
associate or joint venture"
In August 2020, the HKICPA issued amendments to HKAS 1 ("2020 HKAS 1
amendments") to clarify the requirements on determining if a liability is current
or non-current, in particular the determination over whether an entity has the
right to defer settlement of the liability for at least 12 months after the reporting
period. The amendments:
•
specify that an entity's right to defer settlement must exist at the end of the
reporting period;
clarify that classification is unaffected by management's intentions or
expectations about whether the entity will exercise its right to defer
settlement;
clarify how lending conditions affect classification; and
clarify the classification of liabilities that will or may be settled by issuing an
entity's own equity instruments.
In December 2022, the HKICPA published further amendments to HKAS 1 ("2022
HKAS 1 amendments") to clarify how an entity determines the current/non-
current classification of a liability when its right to defer the settlement is subject
to compliance with covenants.
The 2020 and 2022 HKAS 1 amendments are to be applied as a package on a
retrospective basis for annual reporting periods beginning on after 1 January
2024.
The amendments clarify how an entity accounts for a sale and leaseback after
the date of the transaction. The amendments require the seller-lessee applies
the general requirements for subsequent accounting of the lease liability in such
a way that it does not recognise any gain or loss relating to the right of use it
retains.
The amendments introduce disclosure requirements to enhance transparency of
supplier finance arrangements and their effects on an entity's liabilities, cash
flows and exposure to liquidity risk.
The amendments specify when a currency is exchangeable into another currency
and when it is not, and how an entity determines a spot rate when a currency
lacks exchangeability.
Under the amendments, entities are required to provide additional disclosures to
help users evaluate how a currency's lack of exchangeability affects, or is
expected to affect, its financial performance, financial position and cash flows.
The amendments introduce new requirements on loss of control over assets in a
transaction with an associate or joint venture. These requirements require the
full gain to be recognised when the assets transferred meet the definition of a
"business" under HKFRS 3, Business combinations.
The amendments as originally issued had an effective date of annual periods
beginning on or after 1 January 2016. In December 2015, the IASB decided to
remove the effective date of the equivalent amendments to IFRS 10 and IAS 28
and indicated that the effective date will be determined when its research
project on equity accounting is completed. The HKICPA followed the IASB's
decision and indefinitely deferred the effective date of the equivalent
amendments to HKFRS 10 and HKAS 28 accordingly.
[End of Table B2]
1 The amendments to IAS 21, Lack of exchangeability were issued by the IASB in August 2023. The equivalent HKFRS amendments have
not been issued as at 31 August 2023, but they are expected to be issued by the HKICPA in due course.
B3
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