Investor Presentaiton
S380
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C(AS(PB))R
Compliance with International Financial Reporting Standards (IFRS Accounting Standards)
Since the completion of the IFRS Accounting Standards convergence project with effect from 1 January
2005, the HKICPA has maintained its policy of adopting word for word all amendments and Interpretations
from their IFRS Accounting Standards equivalents and with the same effective dates. Hence the body of
HKFRSS is almost identical to the body of IFRS Accounting Standards.
However, some legacy differences remain and these may still result in financial statements prepared under
HKFRSS showing different amounts and disclosures than would have been shown by an entity that had
adopted IFRS Accounting Standards. For example, entities which carried property, plant and equipment at
revalued amounts in financial statements relating to periods ended before 30 September 1995 are not
required to make regular revaluations in accordance with paragraphs 31 and 36 of HKAS 16, Property, plant
and equipment, even if the carrying amounts of the revalued assets are materially lower than the asset's fair
values, provided that they have not revalued their property, plant and equipment subsequent to 30
September 1995.
Further information on these differences between HKFRSS and IFRS Accounting Standards can be found
from a detailed comparison maintained by the HKICPA on their website.
In addition, an entity is required to apply IFRS 1, First-time adoption of International Financial Reporting
Standards, when preparing its "first IFRS financial statements" as described in that standard. In this
connection, IFRS 1 contains a number of elections that can be made on first time adoption of IFRS Standards
and a number of other mandatory transitional requirements. This process of transition could also lead to
differences between financial statements prepared in accordance with IFRS Accounting Standards and those
that would have been prepared in accordance with HKFRSS (or other local GAAP) had the entity not
transitioned to IFRS Accounting Standards.
Listed issuers which prepare their annual reports in accordance with IFRS Accounting Standards should
check carefully the impact of these differences before using this Guide for reference².
Section 380 of the CO requires companies incorporated under the CO to prepare their annual financial statements in accordance
with the applicable accounting standards "issued or specified" by the HKICPA. Accordingly, issuers incorporated under the CO can
adopt IFRS Standards only when they assert dual compliance with both HKFRS and IFRS Standards. Companies that are not
incorporated under the CO, can choose to apply IFRS Accounting Standards or HKFRS or both, as allowed by the Hong Kong Listing
Rules.
Further information on this requirement and guidance on asserting dual compliance can be found in our Hong Kong Companies
Ordinance Information Sheet "Meeting the requirement to comply with applicable accounting standards and asserting dual
compliance", available from your usual KPMG contact.
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