|Extent of IFRS application||Status||Additional Information|
|IFRS Standards are required for domestic public companies||Domestic companies whose securities trade in a public market are required to use Hong Kong Financial Reporting Standards (HKFRS), which are virtually identical to IFRS Standards, with the following exception: A company that is domiciled in Hong Kong but that is incorporated outside of Hong Kong is permitted to use either HKFRS or IFRS Standards as issued by the Board.|
|IFRS Standards are permitted but not required for domestic public companies|
|IFRS Standards are required or permitted for listings by foreign companies||Permitted. For example, more than 250 mainland Chinese companies listed on the Stock Exchange of Hong Kong use either IFRS Standards or HKFRS.|
|The IFRS for SMEs Standard is required or permitted||Permitted.|
|The IFRS for SMEs Standard is under consideration|
Role of the organisation
As one of two Special Administrative Regions of China (the other being Macao), Hong Kong has its own legal system, including its own legal framework for developing accounting standards.
The HKICPA is the only body authorised by law to promulgate financial reporting, auditing and ethical standards for professional accountants in Hong Kong pursuant to Section 18A of the Professional Accountants Ordinance (Chapter 50).
Has the jurisdiction made a public commitment in support of moving towards a single set of high quality global accounting standards?
Has the jurisdiction made a public commitment towards IFRS Standards as that single set of high quality global accounting standards?
What is the jurisdiction's status of adoption?
Additional comments provided on the adoption status?
If the jurisdiction has NOT made a public statement supporting the move towards a single set of accounting standards and/or towards IFRS Standards as that set of standards, explain the jurisdiction's general position towards the adoption of IFRS Standards in the jurisdiction.
For DOMESTIC companies whose debt or equity securities trade in a public market in the jurisdiction:
Are all or some domestic companies whose securities trade in a public market either required or permitted to use IFRS Standards in their consolidated financial statements?
If YES, are IFRS Standards REQUIRED or PERMITTED?
Does that apply to ALL domestic companies whose securities trade in a public market, or only SOME? If some, which ones?
Are IFRS Standards also required or permitted for more than the consolidated financial statements of companies whose securities trade in a public market?
For instance, are IFRS Standards required or permitted in separate company financial statements of companies whose securities trade in a public market?
For instance, are IFRS Standards required or permitted for companies whose securities do not trade in a public market?
If the jurisdiction currently does NOT require or permit the use of IFRS Standards for domestic companies whose securities trade in a public market, are there any plans to permit or require IFRS Standards for such companies in the future?
For FOREIGN companies whose debt or equity securities trade in a public market in the jurisdiction:
Are all or some foreign companies whose securities trade in a public market either REQUIRED or PERMITTED to use IFRS Standards in their consolidated financial statements?
If YES, are IFRS Standards REQUIRED or PERMITTED in such cases?
Does that apply to ALL foreign companies whose securities trade in a public market, or only SOME? If some, which ones?
Annual accounts of foreign company that is publicly traded in Hong Kong are required to conform to:
- HKFRS, which are virtually identical to IFRS Standards; or
- IFRS; or
- China Accounting Standards for Business Enterprises (ASBE) in the case of an issuer from the People’s Republic of China that has adopted ASBE for the preparation of its annual financial statements; or
- an overseas issuer that has a secondary listing on the Hong Kong Exchange may prepare its accounts in conformity with Generally Accepted Accounting Principles in the United States of America (US GAAP).
At 30 October 2018, a total of 391 Chinese companies trade in Hong Kong (on the ‘Red Chip’ and ‘H-Share’ main boards). The financial reporting frameworks used by those companies in Hong Kong are as follows:
Number of companies
Per cent of companies
Per cent of market capitalisation
Which IFRS Standards are required or permitted for domestic companies?
The auditor's report and/or the basis of presentation footnotes states that financial statements have been prepared in conformity with:
Does the auditor's report and/or the basis of preparation footnote allow for ‘dual reporting’ (conformity with both IFRS Standards and the jurisdiction’s GAAP)?
Are IFRS Standards incorporated into law or regulations?
Financial reporting standards issued by the HKICPA are recognised as authoritative under Hong Kong law.
If yes, how does that process work?
If no, how do IFRS Standards become a requirement in the jurisdiction?
Does the jurisdiction have a formal process for the 'endorsement' or 'adoption' of new or amended IFRS Standards (including Interpretations) in place?
If yes, what is the process?
The HKICPA’s due process procedures are as follows:
- HKFRS are developed through a due process that involves members and member practices of the HKICPA, listed companies in Hong Kong, the stock exchange, regulatory and legal authorities, academics and other interested individuals and organisations.
- The HKICPA Financial Reporting Standards Committee (FRSC) consults the HKICPA Standards and Quality Accountability Board (SQAB) on major projects, agenda decisions, and work priorities. The FRSC identifies potential agenda items for which timely guidance can be provided. Due process for projects may involve any or all of the following steps which are conducted by the FRSC except for noted otherwise:
- identifying and reviewing all the issues associated with an exposure draft or a draft interpretation issued by the IASB Board for possible adoption in Hong Kong or any other topics and considering the application of the Framework to the issues, if needed;
- studying pronouncements of the IASB Board and other standard setting bodies and accepted industry practices about the issues;
- consulting the SQAB about the advisability of adding the topic to the FRSC’s agenda;
- forming an advisory group to give advice to the FRSC on the project;
- publishing for public comment a discussion document and, in the case of the IASB Board issuing a discussion document, issuing an invitation to comment in Hong Kong on that discussion document with a request for comment before the comment deadline imposed by the IASB so as to allow the FRSC a reasonable time to consider the comments before Council makes a submission to the IASB Board;
- publishing for public comment an exposure draft or a draft interpretation and, in the case of the IASB Board issuing an exposure draft or a draft interpretation, issuing an invitation to comment in Hong Kong on that IASB exposure draft or draft interpretation with a request for comment before the comment deadline imposed by the IASB so as to allow the FRSC a reasonable time to consider the comments before Council makes a submission to the IASB;
- publishing within an exposure draft a basis for conclusions;
- considering all comments received within the comment period on discussion documents, exposure drafts, and draft interpretations and those received in response to the Hong Kong invitation to comment on the IASB documents and, when appropriate, preparing a comment letter to the IASB Board;
- following publication of the finalised IFRS Standard or Interpretation of IFRS Standard, considering the changes made, if any, by the IASB Board and adopting the finalised IFRS Standard or Interpretation of IFRS Standards in Hong Kong with the same effective date;
- approving a standard or an Interpretation, including that converged with the equivalent IFRS Standard or Interpretation of IFRS Standards, by Council; and
- publishing within a standard a basis for conclusions, if appropriate, explaining how the conclusions were reached and giving background information that may help users of HKFRS to apply them in practice or, in the case of a standard that is converged with IFRS, publishing within the standard the IASB Basis for Conclusions with an explanation of the extent to which Council agrees with the IASB Basis for Conclusions so as to enable users to understand any changes made to the IFRS Standard.
- On occasion, the FRSC may consult and raise issues specific to Hong Kong proactively with the IASB Board.
If no, how do new or amended IFRS Standards become a requirement in the jurisdiction?
Has the jurisdiction eliminated any accounting policy options permitted by IFRS Standards and/or made any modifications to any IFRS Standards?
If yes, what are the changes?
Other comments regarding the use of IFRS Standards in the jurisdiction?
Are IFRS Standards translated into the local language?
If they are translated, what is the translation process? In particular, does this process ensure an ongoing translation of the latest updates to IFRS Standards?
Has the jurisdiction adopted the IFRS for SMEs Standard for at least some SMEs?
If no, is the adoption of the IFRS for SMEs Standard under consideration?
Did the jurisdiction make any modifications to the IFRS for SMEs Standard?
If the jurisdiction has made any modifications, what are those modifications?
Which SMEs use the IFRS for SMEs Standard in the jurisdiction, and are they required or permitted to do so?
For those SMEs that are not required to use the IFRS for SMEs Standard, what other accounting framework do they use?
Other comments regarding use of the IFRS for SMEs Standard?
Hong Kong Financial Reporting Standards (HKFRS) have been fully converged with IFRS for annual reporting periods commencing from 1 January 2005. For a fuller description of the reporting requirements within the Hong Kong Special Administrative Region of the People’s Republic of China (Hong Kong), see the jurisdictional profile.
General requirements for companies for-profit entities
In general, private companies are required by law to prepare annual financial statements in accordance with the ‘relevant accounting standards’ (which could be full HKFRS (equivalent to full IFRS), HKFRS for Private Entities (equivalent to the IFRS for SMEs) or a locally developed ‘Small and Medium Sized Entity Financial Reporting Framework and Financial Reporting Standard’, depending on the company’s facts and circumstances) and present these financial statements to the company’s shareholders on an annual basis. These financial statements are also generally required to be submitted to the Inland Revenue Department as part of a company’s tax filing. However, private companies are not required to file their financial statements with the Hong Kong Companies Registrar (the ‘Companies Registrar’) and are not otherwise required to place their financial statements on public record.
In addition, companies in regulated sectors (such as banking and insurance) are required to file their financial statements with their respective industry regulators.
Public companies and companies limited by guarantee are required to file their annual financial statements with the Companies Registrar.
The Companies Registrar requires that a public company, if the financial year begins:
- before 3 March 2014, files within 42 days after the date of the company’s annual general meeting; and
- on or after 3 March 2014, files within 42 days after the date, which is six months after the end of the company’s accounting reference period.
For a company limited by guarantee, if the financial year begins:
- before 3 March 2014, files within 42 days after the date of the company’s annual general meeting; and
- on or after 3 March 2014, files within 42 days after the date, which is nine months after the end of the company’s accounting reference period
Under the listing rule requirements in Hong Kong, main board issuers must publish: (a) annual reports not later than four months; and (b) half-yearly reports not later than three months after the date upon which the financial period ended. GEM (Growth Enterprise Market) issuers must publish:
- annual reports not later than three months; and
- quarterly and half-yearly reports not later than 45
General requirement for companies
Private companies are not required to file their financial statements with the Companies Registrar.
Inland Revenue Department:
Companies must file hard copies of tax returns to the Inland Revenue Department. (Small corporations/businesses that have a gross income of less than HKD2 million and that satisfy other specified conditions can elect to use internet filing ‘eTax’).
What type or format of structured electronic filing is required or permitted?
What is the purpose of the electronic filing?
What documents are required to be filed to the electronic filing system?
Is the financial data provided in XBRL format publicly available?
Is the XBRL reporting system based on the IFRS Taxonomy issued by the IASB?
If no, what are the reasons for not using the IFRS Taxonomy?
Is the IFRS for SMEs filing adopted in the XBRL reporting system?
If no, are there any plans to implement the IFRS for SMEs filing in the future?
How is the XBRL financial statement reporting system set up?
What is (are) the intended purpose(s) of the local base taxonomy?
Which IFRS Taxonomy files are used?
Which part(s) of the IFRS (local) Taxonomy do filer's submissions import/refer to?
Are filers permitted to replace or override any aspects or specified features of the IFRS (local) Taxonomy?
If yes, which aspects and how does this work?
What is the scope or coverage of XBRL filing/tagging?
Are there any plans to extend the coverage of the XBRL filing/tagging in the future?
Which version of the IFRS Taxonomy is being used
If the taxonomy is to be updated to the 2014/2015 version, which of the following module(s) is (are) to be used?
Any guidelines or submission rules for filers?
Do bodies in this jurisdiction use XBRL for purposes other than general purpose financial reports? (For example, taxation authorities, statistical purposes etc.)
Role of the organisation
As one of two special administrative regions of China (the other being Macao), Hong Kong has its own legal system, including its own legal framework for developing accounting Standards.
The HKICPA is the only body authorised by law to promulgate financial reporting, auditing and ethical standards for professional accountants in Hong Kong, pursuant to Section 18A of the Professional Accountants Ordinance (Chapter 50).