STATEMENT OF CASH FLOWSCash flow itemClassification in the statement of cash flowsCurrent HKAS 7Amended HKAS 7Entities withoutspecified mainbusiness activitiesEntities with specified mainbusiness activitiesInterest receivedOperating orinvestingInvestingIf the related interest income,interest expense or dividendincome is classified entirelywithin a single category inthe statement of profit or loss,classify the related cash flowas arising from the associatedactivity.If the related interest income,interest expenses or dividendincome is classified in morethan one category in thestatement of profit or loss ,apply an accounting policy toclassify the total of each typeof cash flow in one of theassociated activities.Interest paidOperating orfinancingFinancingDividendsreceivedOperating orinvestingInvestingDividends paidOperating orfinancingFinancingDiscussions about HKFRS 18 Presentation and Disclosure in Financial Statements have largelycentered on its major changes, including the new structure of the statement of profit or loss,management-defined performance measures (MPMs), and enhanced aggregation and disaggregationrequirements. Equally important, however, are the consequential amendments that HKFRS 18introduces to several other HKFRS Accounting Standards.This issue highlights several key standards affected by those amendments and discusses practicalconsiderations that entities should address before HKFRS 18 becomes effective on 1 January 2027.HKFRS 18 NAVIGATORBEYOND THE HEADLINES: CHANGES TO OTHERHKFRS ACCOUNTING STANDARDSAUGUST 2026 ISSUE 7HKFRS 18 introduces consequential amendments to HKAS 7 Statement of CashFlows to reduce diversity in practice and improve comparability. Key changes include:
requiring entities to use the operating profit or loss subtotal as the starting pointfor reporting cash flows from operating activities using the indirect method; andremoving the presentation alternatives for interest and dividend cash flows.The changes to the classification requirements for interest and dividend cash flows are summarisedbelow:
See HKFRS 18 Navigator Issue 3 for discussion of the assessment of specified main business activities and theclassification of specified income and expenses in the statement of profit or loss.EARNINGS PER SHAREHKFRS 18 NAVIGATORBEYOND THE HEADLINES: CHANGES TO OTHERHKFRS ACCOUNTING STANDARDSAUGUST 2026 ISSUE 7Potential impactsEntities should review their current classification of interest and dividend cash flows andassess the impact of the amended HKAS 7 requirements, including any necessaryreclassifications.Entities may need to update cash flow reporting processes and chart-of-accountmappings to accommodate the new classification requirements and the requirement touse operating profit or loss as the starting point when applying the indirect method.Entities with specified main business activities should assess whether existing systemscan appropriately identify and track interest- and dividend-related cash flows to supportclassification that is consistent with the related income and expenses presented in thestatement of profit or loss.In addition to basic and diluted earnings per share, HKAS 33 Earnings per Share currently permitsentities to disclose additional amount per share calculated based on a reported component of thestatement of comprehensive income.HKFRS 18 amends HKAS 33 to permit an entity to disclose additional amount pershare only if the numerator is either a total or subtotal specified in HKFRS 18 or anMPM as defined in HKFRS 18.Where an entity discloses an additional amount per share, the amendments require itto:
disclose the additional basic and diluted amount per share with equalprominence;
calculate the additional amount per share using the weighted average number ofordinary shares determined in accordance with HKAS 33;
disclose the additional amount per share in the notes and not in the primaryfinancial statements; andprovide the disclosures required by HKFRS 18 for MPMs when the numerator isan MPM.See HKFRS 18 Navigator Issue 4 for discussion of MPM.Entities that currently disclose additional amount per share should assess whetherthose measures continue to comply with the amended requirements of HKAS 33.Entities may need to reconsider the basis on which additional amount per sharemeasures are calculated and presented, particularly where the numerator is not asubtotal specified by HKFRS 18 or an MPM.Where additional amount per share is calculated based on MPMs, entities shouldassess whether systems and processes are capable of supporting the relatedHKFRS 18 disclosure requirements.Potential impactsINTERIM FINANCIAL REPORTINGRELOCATION OF CERTAIN REQUIREMENTSHKFRS 18 NAVIGATORBEYOND THE HEADLINES: CHANGES TO OTHERHKFRS ACCOUNTING STANDARDSAUGUST 2026 ISSUE 7HKFRSHKAS 34 Interim Financial Reporting was amended to reflect the requirements ofHKFRS 18 by:
aligning presentation requirements with HKFRS 18, including the requiredcategories and subtotals in the statement of profit or loss;
requiring the application of the aggregation and disaggregation principles inHKFRS 18; andrequiring disclosures about MPMs.For entities preparing condensed interim financial statements in the first year of applying HKFRS18:
present the headings and subtotals required by HKFRS 18 in the condensed interim statementof profit or loss;
provide reconciliations, for each line item presented in the interim statement of profit or loss,between amounts previously presented under HKAS 1 Presentation of Financial Statementsand the restated amounts presented under HKFRS 18 for the comparative periods immediatelypreceding the current and cumulative current periods in which HKFRS 18 is first applied; andsimilar reconciliations are permitted, but not required, for the current period or earliercomparative periods.Transition provisionsAs part of the restructuring of presentation and disclosure requirements, certainrequirements previously contained in HKAS 1 have been relocated to HKAS 8Accounting Policies, Changes in Accounting Estimates and Errors, including:
the concepts of true and fair view and compliance with HKFRS AccountingStandards;
the going concern assessment;
the accrual basis of accounting;
disclosures about an entity’s selection and application of accounting policies;
anddisclosures about sources of estimation uncertainty.To better reflect its revised content, the title of HKAS 8 will be changed toBasis of Preparation of Financial Statements when HKFRS 18becomes effective.HKFRS 18 NAVIGATORBEYOND THE HEADLINES: CHANGES TO OTHERHKFRS ACCOUNTING STANDARDSAUGUST 2026 ISSUE 7LOOKING AHEAD: WHAT’S NEXT IN OUR SERIESThis publication has been prepared by staff of the HKICPA for information or illustration purposes. Members of the HKICPAand other users should also read the full HKFRS Accounting Standards, as set out in the HKICPA Members' Handbook forfurther reference, and seek professional advice where necessary.Q4
8.Navigating IFRSagenda decisions onHKFRS 18
9.From theory to practiceQ3
6.A deep-dive into income,expenses & informationgrouping
7.Beyond the headlines:
Changes to otherHKFRS AccountingStandardsH1
1.Getting ready
2.Navigating the newstructure
3.Defining what you do:
Determination of mainbusiness activities
4.Management-definedPerformance Measures
5.Insights for financialinstitutionsThe IFRS Interpretations Committee has issued several agenda decisions arising from implementationquestions on IFRS 18. These publications provide useful insights into the practical application of the Standard.The next issue will explore some of these agenda decisions in more detail.
HKFRS 18 Navigator Issue 7: Beyond the headlines: Changes to other HKFRS Accounting Standards
下载原件STATEMENT OF CASH FLOWSCash flow itemClassification in the statement of cash flowsCurrent HKAS 7Amended HKAS 7Entities withoutspecified mainbusiness activitiesEntities with specified mainbusiness activitiesInterest receivedOperating orinvestingInvestingIf the related interest income,interest expense or dividendincome is classified entirelywithin a single category inthe statement of profit or loss,classify the related cash flowas arising from the associatedactivity.If the related interest income,interest expenses or dividendincome is classified in morethan one category in thestatement of profit or loss ,apply an accounting policy toclassify the total of each typeof cash flow in one of theassociated activities.Interest paidOperating orfinancingFinancingDividendsreceivedOperating orinvestingInvestingDividends paidOperating orfinancingFinancingDiscussions about HKFRS 18 Presentation and Disclosure in Financial Statements have largelycentered on its major changes, including the new structure of the statement of profit or loss,management-defined performance measures (MPMs), and enhanced aggregation and disaggregationrequirements. Equally important, however, are the consequential amendments that HKFRS 18introduces to several other HKFRS Accounting Standards.This issue highlights several key standards affected by those amendments and discusses practicalconsiderations that entities should address before HKFRS 18 becomes effective on 1 January 2027.HKFRS 18 NAVIGATORBEYOND THE HEADLINES: CHANGES TO OTHERHKFRS ACCOUNTING STANDARDSAUGUST 2026 ISSUE 7HKFRS 18 introduces consequential amendments to HKAS 7 Statement of CashFlows to reduce diversity in practice and improve comparability. Key changes include:
requiring entities to use the operating profit or loss subtotal as the starting pointfor reporting cash flows from operating activities using the indirect method; andremoving the presentation alternatives for interest and dividend cash flows.The changes to the classification requirements for interest and dividend cash flows are summarisedbelow:
See HKFRS 18 Navigator Issue 3 for discussion of the assessment of specified main business activities and theclassification of specified income and expenses in the statement of profit or loss.EARNINGS PER SHAREHKFRS 18 NAVIGATORBEYOND THE HEADLINES: CHANGES TO OTHERHKFRS ACCOUNTING STANDARDSAUGUST 2026 ISSUE 7Potential impactsEntities should review their current classification of interest and dividend cash flows andassess the impact of the amended HKAS 7 requirements, including any necessaryreclassifications.Entities may need to update cash flow reporting processes and chart-of-accountmappings to accommodate the new classification requirements and the requirement touse operating profit or loss as the starting point when applying the indirect method.Entities with specified main business activities should assess whether existing systemscan appropriately identify and track interest- and dividend-related cash flows to supportclassification that is consistent with the related income and expenses presented in thestatement of profit or loss.In addition to basic and diluted earnings per share, HKAS 33 Earnings per Share currently permitsentities to disclose additional amount per share calculated based on a reported component of thestatement of comprehensive income.HKFRS 18 amends HKAS 33 to permit an entity to disclose additional amount pershare only if the numerator is either a total or subtotal specified in HKFRS 18 or anMPM as defined in HKFRS 18.Where an entity discloses an additional amount per share, the amendments require itto:
disclose the additional basic and diluted amount per share with equalprominence;
calculate the additional amount per share using the weighted average number ofordinary shares determined in accordance with HKAS 33;
disclose the additional amount per share in the notes and not in the primaryfinancial statements; andprovide the disclosures required by HKFRS 18 for MPMs when the numerator isan MPM.See HKFRS 18 Navigator Issue 4 for discussion of MPM.Entities that currently disclose additional amount per share should assess whetherthose measures continue to comply with the amended requirements of HKAS 33.Entities may need to reconsider the basis on which additional amount per sharemeasures are calculated and presented, particularly where the numerator is not asubtotal specified by HKFRS 18 or an MPM.Where additional amount per share is calculated based on MPMs, entities shouldassess whether systems and processes are capable of supporting the relatedHKFRS 18 disclosure requirements.Potential impactsINTERIM FINANCIAL REPORTINGRELOCATION OF CERTAIN REQUIREMENTSHKFRS 18 NAVIGATORBEYOND THE HEADLINES: CHANGES TO OTHERHKFRS ACCOUNTING STANDARDSAUGUST 2026 ISSUE 7HKFRSHKAS 34 Interim Financial Reporting was amended to reflect the requirements ofHKFRS 18 by:
aligning presentation requirements with HKFRS 18, including the requiredcategories and subtotals in the statement of profit or loss;
requiring the application of the aggregation and disaggregation principles inHKFRS 18; andrequiring disclosures about MPMs.For entities preparing condensed interim financial statements in the first year of applying HKFRS18:
present the headings and subtotals required by HKFRS 18 in the condensed interim statementof profit or loss;
provide reconciliations, for each line item presented in the interim statement of profit or loss,between amounts previously presented under HKAS 1 Presentation of Financial Statementsand the restated amounts presented under HKFRS 18 for the comparative periods immediatelypreceding the current and cumulative current periods in which HKFRS 18 is first applied; andsimilar reconciliations are permitted, but not required, for the current period or earliercomparative periods.Transition provisionsAs part of the restructuring of presentation and disclosure requirements, certainrequirements previously contained in HKAS 1 have been relocated to HKAS 8Accounting Policies, Changes in Accounting Estimates and Errors, including:
the concepts of true and fair view and compliance with HKFRS AccountingStandards;
the going concern assessment;
the accrual basis of accounting;
disclosures about an entity’s selection and application of accounting policies;
anddisclosures about sources of estimation uncertainty.To better reflect its revised content, the title of HKAS 8 will be changed toBasis of Preparation of Financial Statements when HKFRS 18becomes effective.HKFRS 18 NAVIGATORBEYOND THE HEADLINES: CHANGES TO OTHERHKFRS ACCOUNTING STANDARDSAUGUST 2026 ISSUE 7LOOKING AHEAD: WHAT’S NEXT IN OUR SERIESThis publication has been prepared by staff of the HKICPA for information or illustration purposes. Members of the HKICPAand other users should also read the full HKFRS Accounting Standards, as set out in the HKICPA Members' Handbook forfurther reference, and seek professional advice where necessary.Q4
8.Navigating IFRSagenda decisions onHKFRS 18
9.From theory to practiceQ3
6.A deep-dive into income,expenses & informationgrouping
7.Beyond the headlines:
Changes to otherHKFRS AccountingStandardsH1
1.Getting ready
2.Navigating the newstructure
3.Defining what you do:
Determination of mainbusiness activities
4.Management-definedPerformance Measures
5.Insights for financialinstitutionsThe IFRS Interpretations Committee has issued several agenda decisions arising from implementationquestions on IFRS 18. These publications provide useful insights into the practical application of the Standard.The next issue will explore some of these agenda decisions in more detail.