Investor Presentaiton
HKAS 1.51(a)
HKAS 1.49
HK Listco Ltd
Financial statements for the year ended 31 December 2023
HKAS 1.10(f),
40A-D
HKAS 1.113
HKAS 1.29, 30A
HKAS 1.55, 57-
58
61
62
63
The CO explicitly uses the term "statement of financial position" in different sections, including section 387 and section 2 of Part 1 of
Schedule 4 to the CO. Given that these requirements explicitly refer to "statement of financial position", we believe that the company
should use the title "statement of financial position", and not other titles such as "balance sheet". The term "statement of financial
position" is also in line with the terminology in Appendix 16 to the MBLRs.
HKAS 1 requires entities to include a statement of financial position as at the beginning of the preceding period when an entity
applies an accounting policy retrospectively, makes a retrospective restatement of items, or when it reclassifies items; and such
retrospective application, restatement or reclassification has a material effect on the information in the statement of financial
position at the beginning of the preceding period.
Each item on the face of the statement of financial position shall be cross-referenced to any related information in the notes.
As discussed in footnote 48, HKAS 1 requires an entity to present separately items of a dissimilar nature or function, unless they
are immaterial, and take into consideration all relevant facts and circumstances in deciding how it aggregates information in the
financial statements. Specifically, an entity should not reduce the understandability of the financial statements by aggregating
material items that have different natures or functions.
An entity should also present additional line items, headings and subtotals (i.e. in addition to those specifically required by HKFRS)
in the statement of financial position when the size, nature or function of an item (or aggregation of similar items) is such that
separate presentation is relevant to an understanding of the entity's financial position. In assessing whether it is required to
present additional items separately, an entity considers:
• the nature and liquidity of assets;
CP
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HKAS 1.29-30A,
55, 77
65
•
the function of assets within the entity; and
the amounts, nature and timing of liabilities.
Although there is no specific requirement under HKFRSS or the MBLRs to disclose the amounts of net current assets (liabilities) and
total assets less current liabilities, it is a common local practice to disclose these two subtotals.
Entities should apply judgement in determining whether the following HKFRS 15 items should be presented separately (either in the
statement of financial position or in the notes) or aggregated with another line item (and if so, then which line item):
refund/repurchase liability;
•
right to recover a returned good;
•
costs to obtain/fulfil a contract (contract costs); and
•
asset relating to the consideration paid to the customer.
HKFRS 15.128
HKFRS 15.55,
B21, BC367
HKFRS 16.47
HKFRS 16.48
HKAS 19.133
66
67
As further explained in footnote 201, in this illustration, HK Listco aggregates capitalised contract costs with inventories as a single
line item in the statement of financial position because of their similar nature. The closing balances of the capitalised costs are
disclosed in the note under the disclosure requirements of paragraph 128 of HKFRS 15 (see note 19).
In this illustration, HK Listco also aggregates the asset recognised for its right to recover returned goods with inventories, and refund
liabilities arising from right to return and volume rebates with trade and other payable, in the statement of financial position
because of their similar nature, and discloses them separately in the notes (see note 19 for the right to recover returned goods and
note 24 for refund liabilities).
In this illustration, it is assumed that HK Listco does not have any liabilities arising from repurchase agreements or assets relating to
consideration paid to the customers.
For right-of-use assets and lease liabilities, an entity can as an accounting policy election either present them separately in the
statement of financial position or disclose them separately in the notes. If the entity chooses not to present right-of-use assets
separately in the statement of financial position, the amounts shall be presented within the same line item as that within which the
corresponding underlying assets would be presented if they were owned. In this illustration, HK Listco has chosen not to present
right-of-use assets separately and therefore includes the amount of the right-of-use assets within "Property, plant and equipment",
i.e. the same line item used to present the underlying assets of the same nature that it owns (see note 11).
However, the above accounting policy choice does not apply to right-of-use assets that meet the definition of investment property.
These assets are specifically required to be presented as investment property in the statement of financial position.
HKAS 19 states that it does not specify whether assets and liabilities arising from post-employment benefits should be distinguished
between current and non-current portions. We interpret this to mean that there is no need to apply the current/non-current
distinction to all such assets and liabilities. However, where the distinction is clear, for example for outstanding contributions to
defined contribution schemes due within 12 months, the distinction should be made. Also, a note may be necessary in accordance
with paragraph 61 of HKAS 1, for example as illustrated in note 28(b)(i) to these financial statements, with regard to whether any of
these balances include amounts due within and after 12 months.
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