17 July 2020To:
Members of the Hong Kong Institute of CPAsAll other interested partiesINVITATION TO COMMENT ON EXPOSURE DRAFTProposed Amendments to Accounting Guideline 5Merger Accounting for Common Control Combinations (AG 5)
Comments to be received by 16 October 2020The Financial Reporting Standards Committee (FRSC) of the Hong Kong Institute ofCertified Public Accountants (Institute) is seeking comments on the Exposure DraftProposed Amendments to the Accounting Guideline 5 Merger Accounting for CommonControl Combinations. The Exposure Draft is available on the Institute's website:
http://www.hkicpa.org.hk/en/standards-and-regulations/standards/financial-reporting/exposure-drafts/In August 2016, the FRSC of the Institute issued a Request for Information to conduct apost-implementation review (PIR) of AG 5. The comment period closed in December 2016.The aim of the PIR was to proactively seek feedback from constituents on matters raisedby the FRSC's Business Combinations and Reporting Entity Advisory Panel, comprisingpreparers, technical experts from accounting firms, and representatives of regulatorybodies in Hong Kong. The PIR also asked for feedback on and assessed the benefits,challenges, and other effects of applying AG 5.The PIR Feedback Statement, issued in August 2018, provides an overview of theInstitute’s PIR process and a summary of the feedback received from constituents and thekey issues identified.Based on the feedback received, the FRSC:
(a) noted that addressing certain constituents’ comments would require amendments tothe principles and accounting requirements in AG 5. However, the FRSC noted thatthe International Accounting Standards Board (IASB) is currently discussing theaccounting approach for transactions within the scope of its Business CombinationUnder Common Control (BCUCC) project. The FRSC considered the importance ofresponding to the feedback versus the burden and confusion for preparers and usersof financial statements in Hong Kong of making two significant sets of changes to theaccounting for common control combinations within a short timeframe. On balance, theFRSC proposes not to amend the principles and accounting requirements in AG 5 nowthat could be affected by the outcome of the IASB BCUCC's project; and(b) proposes the following limited amendments to AG 5 to assist the Institute’s membersin applying AG 5 during the interim period, before the IASB’s project is finalised:
• Updating the terminologies and references in AG 5 to align with existing HKFRSStandards;
• Providing clearer rationale in paragraph 5 of AG 5;
• Adding disclosure requirements to paragraph 19 of AG 5; and• Clarifying the accounting for change in non-controlling interests in the existingexample in AG 5.Page 2 of 2The FRSC invites your comments on the proposals as set out in the Exposure Draft andalso whether any other amendments to AG 5 should be considered by the Institute by 16October 2020. Comments are most helpful if they:
(a) indicate the specific paragraph(s) in the Exposure Draft to which they relate;
(b) contain a clear rationale; and(c) include any alternative the FRSC should consider, if applicable.Comments may be sent by mail, fax or e-mail to:
Standard Setting DepartmentHong Kong Institute of Certified Public Accountants37th Floor, Wu Chung House213 Queen’s Road EastWanchai, Hong KongFax number (+852) 2865 6776E-mail: commentletters@hkicpa.org.hkComments will be acknowledged and may be made available for public review unlessotherwise requested by the respondent.
Invitation to Comment on Exposure Draft Proposed Amendments to Accounting Guideline 5 Merger Accounting for Common Control Combinations (AG 5 )
下载原件17 July 2020To:
Members of the Hong Kong Institute of CPAsAll other interested partiesINVITATION TO COMMENT ON EXPOSURE DRAFTProposed Amendments to Accounting Guideline 5Merger Accounting for Common Control Combinations (AG 5)
Comments to be received by 16 October 2020The Financial Reporting Standards Committee (FRSC) of the Hong Kong Institute ofCertified Public Accountants (Institute) is seeking comments on the Exposure DraftProposed Amendments to the Accounting Guideline 5 Merger Accounting for CommonControl Combinations. The Exposure Draft is available on the Institute's website:
http://www.hkicpa.org.hk/en/standards-and-regulations/standards/financial-reporting/exposure-drafts/In August 2016, the FRSC of the Institute issued a Request for Information to conduct apost-implementation review (PIR) of AG 5. The comment period closed in December 2016.The aim of the PIR was to proactively seek feedback from constituents on matters raisedby the FRSC's Business Combinations and Reporting Entity Advisory Panel, comprisingpreparers, technical experts from accounting firms, and representatives of regulatorybodies in Hong Kong. The PIR also asked for feedback on and assessed the benefits,challenges, and other effects of applying AG 5.The PIR Feedback Statement, issued in August 2018, provides an overview of theInstitute’s PIR process and a summary of the feedback received from constituents and thekey issues identified.Based on the feedback received, the FRSC:
(a) noted that addressing certain constituents’ comments would require amendments tothe principles and accounting requirements in AG 5. However, the FRSC noted thatthe International Accounting Standards Board (IASB) is currently discussing theaccounting approach for transactions within the scope of its Business CombinationUnder Common Control (BCUCC) project. The FRSC considered the importance ofresponding to the feedback versus the burden and confusion for preparers and usersof financial statements in Hong Kong of making two significant sets of changes to theaccounting for common control combinations within a short timeframe. On balance, theFRSC proposes not to amend the principles and accounting requirements in AG 5 nowthat could be affected by the outcome of the IASB BCUCC's project; and(b) proposes the following limited amendments to AG 5 to assist the Institute’s membersin applying AG 5 during the interim period, before the IASB’s project is finalised:
• Updating the terminologies and references in AG 5 to align with existing HKFRSStandards;
• Providing clearer rationale in paragraph 5 of AG 5;
• Adding disclosure requirements to paragraph 19 of AG 5; and• Clarifying the accounting for change in non-controlling interests in the existingexample in AG 5.Page 2 of 2The FRSC invites your comments on the proposals as set out in the Exposure Draft andalso whether any other amendments to AG 5 should be considered by the Institute by 16October 2020. Comments are most helpful if they:
(a) indicate the specific paragraph(s) in the Exposure Draft to which they relate;
(b) contain a clear rationale; and(c) include any alternative the FRSC should consider, if applicable.Comments may be sent by mail, fax or e-mail to:
Standard Setting DepartmentHong Kong Institute of Certified Public Accountants37th Floor, Wu Chung House213 Queen’s Road EastWanchai, Hong KongFax number (+852) 2865 6776E-mail: commentletters@hkicpa.org.hkComments will be acknowledged and may be made available for public review unlessotherwise requested by the respondent.