financial reporting update - nelson cpa limited | reporting update 9 march 2015 lam chi yuen nelson...

1

copy 2014-15 Nelson Consulting Limited 1

Financial Reporting Update9 March 2015

LAM Chi Yuen Nelson 林智遠MBA MSc BBA ACA ACS CFA CGMA CPA(US) CTA FCCA FCPA FCPA(Aust) FHKIoD FTIHK MHKSI MSCA


Effective for 2014 Dec Year‐End

bull Amendments to HKFRS 10 HKFRS 12 and HKAS 27 (2011)Investment Entities

bull Amendments to HKAS 32 Financial Instruments Presentation ndashOffsetting Financial Assets and Financial Liabilities

bull Amendments to HKAS 36 Recoverable Amount Disclosures for Non‐Financial Assets (Impairment of Assets)

bull Amendments to HKAS 39 Novation of Derivatives and Continuation of Hedge Accounting

bull HK(IFRIC) ndash Int 21 Levies

1 Jan 2014

1 Jan 2014

1 Jan 2014

1 Jan 2014

1 Jan 2014

Selected new interpretations and amendments to HKFRSs

Effective for periods beginning onafter

Updated to HKICPA Update No 165 of 28 January 2015

2



bull Amendments to HKAS 19 (2011) Employee Benefits ndash Defined Benefit Plans Employee Contributions

bull Annual Improvements 2010‐2012 Cycle


bull SME‐FRF and SME‐FRS (Revised 2014) (pursuant to the New Companies Ordinance (Cap 622) effective from 3 Mar 2014)

1 Jul 2014

1 Jul 2014 (or other)


3 Mar 2014 (early application not allowed)





Effective after 2015 Dec Year‐End

bull Amendments to HKFRS 11 Accounting for Acquisitions of Interests in Joint Operations

bull Amendments to HKAS 16 and HKAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation

bull Amendments to HKAS 16 and HKAS 41 Agriculture Bearer Plants

bull Amendments to HKAS 27 Equity Method in Separate Financial Statements

bull Amendments to HKFRS 10 and HKAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

bull Annual Improvements to HKFRSs 2012-2014 Cycle bull Amendments to HKAS 1 Disclosure Initiative bull Amendments to HKFRS 10 11 and 12 Investment Entities

Applying the Consolidation Exceptionbull HKFRS 14 Regulatory Deferral Accountsbull HKFRS 15 Revenue from Contracts with Customersbull HKFRS 9 (2014) Financial Instruments

1 Jan2016

1 Jan2016

1 Jan2016

1 Jan2016

1 Jan2016

1 Jan2016 (or other) 1 Jan2016 1 Jan2016

1 Jan2016 1 Jan2017 1 Jan2018




3


Investment Entities(Amendments to HKFRS 10 and 12 and HKAS 27)


Amendments to HKFRS 10

bull An entity that is a parent shall present consolidated financial statements This HKFRS applies to all entities except as follows

(a) hellip

(c) an investment entity need not present consolidated financial statements if it is required in accordance with paragraph 31 of this HKFRS to measure all of its subsidiaries at fair value through profit or loss (HKFRS 104)

4



bull A parent shall determine whether it is an investment entity

bull An investment entity is an entity that

(a) obtains funds from one or more investors for the purpose of providing those investor(s) with investment management services

(b) commits to its investor(s) that its business purpose is to invest funds solely for returns from capital appreciation investment income or both and

(c) measures and evaluates the performance of substantially all of its investments on a fair value basis

bull HKFRS 10B85AndashB85M provide related application guidance (HKFRS 1027)


Offsetting Fin Assets amp Fin Liab(Amendments to HKAS 32)

5


Amendments to HKAS 32

bull Amendments to HKAS 32 Financial Instruments Presentation ndashOffsetting Financial Assets and Financial Liabilities clarify the requirements for offsetting financial instruments

bull The amendments address inconsistencies in current practice when applying the offsetting criteria and clarify

ndash the meaning of lsquocurrently has a legally enforceable right of set‐offrsquo and

ndash that some gross settlement systems may be considered equivalent to net settlement

bull The amendments are effective for annual periods beginning on or after 1 January 2014 and are required to be applied retrospectively


Recoverable Amount Disclosures for Non-Financial Assets (Amendments to HKAS 36)

6


Introduction

bull When HKFRS 13 Fair Value Measurement was issued a consequential amendment had been made to HKAS 36 Impairment of Assets which required the disclosure of information about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal

ndash However the unintended result of those amendments were that an entity would instead be required to disclose the recoverable amount for each cash‐generating unit for which the carrying amount of goodwill or intangible assets with indefinite useful lives allocated to that unit is significant in comparison with the entitys total carrying amount of goodwill or intangible assets with definite useful lives

bull Consequently this amendment aligns the disclosure requirements in HKAS 36 with the original intention ie now delete such disclosure (those highlighted in blue above) in HKAS 36134(c)

bull Moreover additional information is required about the fair value measurement when the recoverable amount of impaired assets is based on fair value less costs of disposal


Levies (HK(IFRIC) ndash Int 21)

7


Introduction

bull HK(IFRIC) ndash Int 21 Levies addresses how an entity should account for liabilities to pay levies imposed by governments other than income taxes in its financial statements

bull The principal question raised was about when the entity should recognise a liability to pay a levy

bull This Interpretation is an interpretation of HKAS 37 Provisions Contingent Liabilities and Contingent Assets

ndash HKAS 37 sets out criteria for the recognition of a liability one of which is the requirement for the entity to have a present obligation as a result of a past event (known as an obligating event)

bull HK(IFRIC) ndash Int 21 clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy

bull HK(IFRIC) ‐ Int 21 is effective for annual periods beginning on or after 1 January 2014 with earlier application permitted


Scope of HK(IFRIC) ndash Int 21

bull HK(IFRIC) ndash Int 21 addresses

ndash the accounting for a liability to pay a levy if that liability is within the scope of HKAS 37

ndash the accounting for a liability to pay a levy whose timing and amount is certain (HK(IFRIC)‐Int 212)

bull HK(IFRIC) ndash Int 21 does not address

ndash the accounting for the costs that arise from recognising a liability to pay a levy

bull Entities should apply other Standards to decide whether the recognition of a liability to pay a levy gives rise to an asset or an expense (HK(IFRIC)‐Int 213)

8



bull A levy is

ndash an outflow of resources embodying economic benefits that is imposed by governments on entities in accordance withlegislation (ie laws andor regulations) other than

(a) those outflows of resources that are within the scope of other Standards (such as income taxes that are within the scope of HKAS 12 Income Taxes) and

(b) fines or other penalties that are imposed for breaches of the legislation

bull Government refers to

ndash government government agencies and similar bodies whether local national or international (HK(IFRIC)‐Int 214)

bull A payment made by an entity for the acquisition of an asset or for the rendering of services under a contractual agreement with a government does not meet the definition of a levy (HK(IFRIC)‐Int 215)


Issues of HK(IFRIC) ndash Int 21

a what is the obligating event that gives rise to the recognition of a liability to pay a levy

b does economic compulsion to continue to operate in a future period create aconstructive obligation to pay a levy that will be triggered by operating in that future period

c does the going concern assumption imply that an entity has a present obligation to pay a levy that will be triggered by operating in a future period

d does the recognition of a liability to pay a levy arise at a point in time or does it in some circumstances arise progressively over time

yThe activity triggering

the levy

bull To clarify the accounting for a liability to pay a levy HK(IFRIC) ndash Int 21 addresses the following issues

No

No

Recognised progressively if the obligating event occurs

over a period of time

9



e what is the obligating event that gives rise to the recognition of a liability to pay a levy that is triggered if a minimum threshold is reached

f are the principles for recognising in the annual financial statements and in the interim financial report a liability to pay a levy the same (HK(IFRIC)‐Int 217)

p p

the accounting for the liability that arises from that obligation shall be consistent with the

principles established


Yes


HKFRS 15 Revenue from Contracts with Customers

SME‐FRF and FRS and Relevant Requirements in Co Ordinance

Todayrsquos Agenda

HKFRS 9 Financial Instruments

10


SME‐FRF and FRS and Co Ord (Cap 622)


Scope ndash HK Incorporated Entity

bull The new HK Companies Ordinance (Cap 622) (ldquonew COrdquo)ndash becomes effective on 3 March 2014

ndash contains an optional reporting exemption for certain private companies and companies limited by guarantee which satisfy the conditions set out in section 359 of the new CO

bull The Small and Medium‐sized Entity Financial Reporting Framework and Financial Reporting Standard which are effective for annual periods beginning on or after 3 March 2014 (the ldquoSME‐FRF and FRS (2014)rdquo) ndash are the accounting standards issued by the HKICPA

that are to be followed in accordance with section 380(4) by those HK incorporated companies which are entitled to and decide to take advantage of this reporting exemptionin the new CO (SME‐FRF para 1)

11


Scope ndash Non‐HK Incorporated

bull In accordance with para 23 of the SME‐FRF (2014) an entity which is not a company incorporated under either the new CO or the predecessor CO (Cap 32) subject to any specific requirements imposed by the law of the entityrsquos place of incorporation and subject to its constitution ndash qualifies for reporting under the SME‐FRF when the entity meets the same

requirements that a HK incorporated entity is required to meet under section 359 of the new CO (SME‐FRF para 2)


Scope ndash Effective Date

bull Consistent with section 358 of the new CO

ndash this revised SME‐FRF becomes effective for a Qualifying Entityrsquos financial statements that cover a period beginning on or after 3 March 2014 the commencement date of the new CO

bull Earlier application of this revised SME‐FRF is not permitted(SME‐FRF para 53)

12


Key Changes from Old SME-FRF and FRS

1 A summary of the criteria for qualifying entities with cross-references to the new CO included

2 New specific disclosure requirements to cover the first year that a company transitions from a different GAAP to SME-FRS

3 New guidance on the concept of ldquorealized profits and lossesrdquo

4 New sections to cover business combinations consolidated financial statements joint arrangementsand associates

5 New guidance on presenting a cash flow statement(optional)

SME-FRF (2014) Para 22-43

SME-FRS (2014) Section 18-21

SME-FRS (2014) Section 22



Adapted from HKICPArsquos Summary of Main Changes



6 Additional disclosure requirements in the Income Taxes section for disclosure of applicable tax rates and unused tax losses

7 New guidance on determining the reporting currencyrdquo (same as functional currency)

8 The definition of related party aligned with the definition in full HKFRS

9 The definitions of active market amp fair value updated to be consistent with HKFRS 13

10New guidance on determining whether an entity is acting as an agent or principal

11Additional guidance on the non-exempted disclosure requirements in the new COand certain other provisions



SME-FRS (2014) Definitions


SME-FRS (2014) Appendix 1



13


1 Criteria for Qualifying Entities

bull Follows the new CO with some further explanations on ldquoReporting Exemptionrdquo for easy reference

bull Meeting the size tests in the first year that the new CO applies

ndash In accordance with sub‐section (2) of each of sections 361 to 366 of the new CO (as applicable) the entity will qualify for the reporting exemption for the first financial year beginning on or after 3 March 2014 if it meets the relevant size tests

(a) in that first financial year andor

(b) in the immediately preceding financial year

ndash If the entity qualifies in the first financial year in accordancewith the above it will continue to qualify until it is disqualified in accordance with sub‐section (4) (as set out in para 32 of SME‐FRS) (SME‐FRF para 30)



bull Meeting the size tests in all subsequent financial yearsndash In accordance with sub‐section (3) of each of ss 361 to 366 of the new CO (as

applicable) an entity which was previously disqualified on the grounds of its size

bull will need to meet the size tests for two consecutive reporting periods before it will qualify for the reporting exemption in the third reporting period regardless of its size in that period (SME‐FRF para 31)

Previouslydisqualified

Meet the size test

Can use reporting exemption

2015 times times

2016 times

2017 times

2018 times

2019 times

14



bull Meeting the size tests in all subsequent financial yearsndash In accordance with sub‐section (4) of each of ss 361 to 363 or sub‐section (5) of

each of ss 364 to 366 of the new CO (as applicable) where an entity has previously qualified for the reporting exemption in terms of its size

bull the entity will continue to qualify for the reporting exemption even when it no longer meets the relevant size tests unless the entity has failed the size tests for two consecutive reporting periods

bull it will then fail to qualify for the reporting exemption in the third reporting period regardless of its size in that period (SME‐FRF para 32)

Previouslyqualified

Meet the size test


2015

2016 times

2017 times

2018 times



bull An exception to this two year grace period for losing entitlement is where a new company enters the group

ndash In this case in accordance with sub‐section (4) of each of sections 364 to 366 of the new CO (as applicable)

bull if the new subsidiary is such that the group fails the size tests in that year

ndash the group will no longer be eligible for the reporting exemption in the year in which the new company enters the group (SME‐FRF para 33)

15



Company Qualifying Conditions

A A private co is a ldquosmall private cordquo or A private co is the holding co of a group of ldquosmall private companiesrdquo

Size test meeting any 2 of the following i Revenue less than $100M ii Assets less than $100Miii Employee less than 100

B An eligible private co orAn eligible private co is the holding co of a ldquogroup of eligible private companiesrdquo

Size test meeting any 2 of the following i Revenue less than $200M ii Assets less than $200M iii Employee less than 100

75 membersrsquo approval without any member objection

C A small guarantee coldquo or A guarantee co is the holding co of a group of small guarantee companies

Size test revenue less than $25M

D Option similar to s 141D of Cap 32 S 359(1)(b)



bull Size tests for group of small guarantee companies small private companies and eligible private companies

ndash each company in the group must meet the size tests and

ndash the aggregate amounts for the group in total mustmeet the size tests (SME‐FRF para 35 37 ad 39)

16



bull Shareholder Approval

ndash In accordance with section 360 of the new CO the shareholder approval requirements for the larger ldquoeligiblerdquo category of private companies or groups are as follows

a) to gain exemption as a larger ldquoeligiblerdquo private company at least 75 of all the members must pass a resolution at a general meeting that the company is to fall within the reporting exemption for the financial year with none objecting and

b) to gain exemption for a group of larger ldquoeligiblerdquo private companies all the companies in the group individually as well as the parent of the group must have obtained the necessary shareholder approval

ndash except for those subsidiaries within the group that fall within the ldquosmall private companyrdquo category




ndash The 75 vote is calculated as a percentage of the entire shareholding of a company not simply as a percentage of the shareholders who attend the general meeting

ndash The resolution is defeated if any member objects either

bull at the meeting or

bull at any time by giving notice in writing to the company

provided that the written notice is given at least 6 months before the end of the financial year to which the objection relates (SME‐FRF para 42)

ndash For s 359(1)(b) (ie new version of s141D) exemption in order to qualify it

bull The company obtain 100 approval from their shareholders each year

bull This approval must be in writing and can only be given for one year at a time (SME‐FRF para 43)

17


2 Transition from Different GAAP

bull The transition from a different GAAP (for example the transition from HKFRS) to the SME‐FRF and SME‐FRS is accounted for as followsa) All items recognised previously under a different GAAP (for example deferred tax

liability) which do not meet the recognition criteria under the SME‐FRF and SME‐FRS are to be derecognised and dealt with as a change of accounting policy under section 2 of the SME‐FRS

b) All items not recognised previously under a different GAAP which meet the recognition criteria under the SME‐FRF and SME‐FRS3 are to be recognised in accordance with the relevant section of the SME‐FRS and dealt with as a change of accounting policy under section 2 of the SME‐FRS

c) All items recognised previously under a different GAAP which meet the recognition criteria under the SME‐FRF and SME‐FRS but which were previously measured on a basis inconsistent with the SME‐FRF and SME‐FRS (for example unamortised goodwill) are to be re‐measured in accordance with the relevant section of the SME‐FRS and dealt with as a change of accounting policy under section 2 of the SME‐FRS (SME‐FRF para 44)


3 Concept of Realized Profits and Losses

bull New guidance on the concept of ldquorealized profits and lossesrdquondash Recognition of an item as income or expense in accordance with the SME‐FRS does

not necessarily result in that item being ldquorealizedrdquo within the meaning of s 291 of the new CO

ndash Consequently a profit which is recognised for accounting purposes under the SME‐FRS may not necessarily be capable of distribution to shareholders by way of a dividend

ndash The concept of ldquorealized profits and lossesrdquo and their relationship to profits and losses as recognised under the SME‐FRS is dealt with in para 46 to 52 of the SME‐FRF (SME‐FRF para16)

18



bull Further guidance on the concept of realized profits and realized losses can be found in Accounting Bulletin 4 and etcndash However it should be noted that this guidance is primarily intended to address a

wide variety of differences between recognition requirements under full HKFRSsand the concept of realized profits or losses (SME‐FRF para52)

ndash Although the same principles for defining realized profits and losses will apply whether a company follows full HKFRSs or SME‐FRS

bull in practice as the SME‐FRS

ndash does not permit upwards revaluation of assets and

ndash does not contain specific requirements relating to more complex financial instruments

raquo many of the differences identified in the Bulletin between recognised profits and losses and realized profits and losses will not be applicableto financial statements prepared in accordancewith the SME‐FRS (SME‐FRF para 52)


4 New Sections

bull New sections to cover business combinations consolidated financial statements joint arrangementsand associates

Section 18 Business Combinations and Goodwill

Section 19 Consolidated and Company‐level Financial Statements

Section 20 Investments in Associates

Section 21 Interests in Joint Ventures and Other Forms of Joint Arrangements

19


4 Section 18 Business Combinations

bull Section 18 is mainly based on HKFRS 3 (2004 version) but simplified and updated with some areas based on HKFRS 3 (2008 version)

ndash Apply in accounting for business combinations in a reporting entityrsquos consolidated financial statements (SME‐FRS 181)

ndash Also apply in accounting for the acquisition of an unincorporated business in a reporting entityrsquos company‐level financial statements (SME‐FRS 181)




ndash Not required to be applied to business combinations involving entities or businesses under common control

bull Common control combinations should be accounted for in accordance with one of the following methods

(a) merger accounting in accordance with Accounting Guideline 5 Merger accounting for common control combinations or

(b) at book values as stated in the financial statements of the acquired entity or in the consolidated financial statements of the previous parent (SME‐FRS 182)

Different from current AG5

20



bull All business combinations should be accounted for by applying the purchase method (SME‐FRS 183)

bull Applying the purchase method involves the following steps

(a) identifying an acquirer

(b) measuring the cost of the business combination and

(c) allocating at the acquisition date the cost of the business combination to the assets acquired and liabilities assumed (SME‐FRS 184)

Different from current HKFRS 3



bull The acquirer should measure the cost of a business combination as

ndash the aggregate of the fair values at the acquisition date of

bull assets given

bull liabilities incurred or assumed and

bull equity instruments issued by the acquirer

in exchange for control of the acquiree (SME‐FRS 188)

bull Other costs attributable to effecting the business combination do not form part of the cost of a business combination

ndash should instead be recognised as expenses in the income statement in the periods in which the costs are incurred and the services are received (SME‐FRS 189)

Same as current HKFRS 3

21



bull The contingent consideration

ndash should include the estimated amount of that adjustment in the cost of the combination at the acquisition date if

bull the adjustment is probable (ie more likely than not) and

bull can be measured reliably (SME‐FRS 1810)




bull The acquirer should recognise separately the acquireersquos identifiable assets and liabilities at the acquisition date only if they satisfy the following criteria at that date(a) in the case of an asset other than an intangible asset

it is probable that any associated future economic benefits will flow to the acquirer and its fair value can be measured reliably

(b) in the case of a liability it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and its fair value can be measured reliably and

(c) in the case of an intangible asset

bull its fair value is readily apparent or otherwise

bull can be measured reliably without undue cost or effort (SME‐FRS 1813)


22



bull Intangible asset acquired in a business combination

ndash Section 4 also states that an intangible asset should be recognised if and only if

a) in the case of an intangible asset acquired in a business combination its fair value

ndash is readily apparent or otherwise

ndash can be measured reliably without undue cost and

b) in all other cases

ndash it is probable that the future economic benefitsthat are attributable to the asset will flow to the entity and

ndash the cost of the asset can be measured reliably (SME‐FRS 42)



bull The acquirer should at the acquisition date(a) recognise goodwill acquired in a business combination

as an asset and

(b) initially measure that goodwill at its cost being the excess of the cost of the business combination over the acquirerrsquos interest in the net fair value of the identifiable assets and liabilities recognised in accordance with para 1812 (SME‐FRS 1818)

bull After initial recognition measure goodwill acquired in a business combination at ndash cost

ndash less any accumulated amortisation and any accumulated impairment losses (SME‐FRS 1819)

bull A rebuttable presumption that the useful life of goodwill will not exceed 5 years from initial recognition (SME‐FRS 1820)


Impairment testing in Section 9

23


bull Impairment of goodwill (new section)

ndash SME‐FRS Section 9 provides simplified guidance

bull An impairment loss recognised for goodwill should not be reversed in a subsequent period (SME‐FRS 913)

bull SME‐FRS Appendix provides guidance on impairment allocation

bull Impairment of assets (amended slightly)

ndash An impairment loss should not be reversed unless

bull its fair value is readily apparent or

bull the assetrsquos recoverable amount can otherwise be measured reliably without undue cost

ndash For those assets (if any) which may satisfy this condition

bull at the end of each reporting period an entity should assess whether there is any indication that an impairment loss recognised in prior periods for an asset may no longer exist or may have decreased and if so estimate the recoverable amount of that asset (SME‐FRS 95)




bull Foreign operation

ndash Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of that foreign operation

bull should be treated as assets and liabilities of the foreign operation

bull should be expressed in the reporting currency of the foreign operation and

bull should be translated at the closing rate(SME‐FRS 1510)

24



bull Previous business combination ndash an entity that has not previously issued consolidated financial statements should apply Section either(a) retrospectively to all past business combinations as a change in accounting policy

in accordance with Section 2 or

(b) as if all the past business combinations that occurred before the beginning of the comparative period had taken place at the beginning of the comparative period

bull The difference between the consideration transferred and the carrying amounts of assets and liabilities of the business acquired that meet the recognition criteria under the SME‐FRF and SME‐FRS at the beginning of the comparative period should be made against the opening balance of retained earnings

bull Any business combination for which the acquisition date falls between the beginning of the comparative period and the date of the first application of this Section should be accounted for in accordance with this Section

bull In the case where this option is used this fact should be disclosed (SME‐FRS

1827)


4 Section 19 Consolidated FS

bull Section 19 is mainly based on HKAS 27 not HKFRS 10

ndash A subsidiary is an entity that is controlled by the parent

ndash Control (of an entity) is defined as

bull the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities (SME‐FRS 194 and Definitions)

ndash Control is presumed to exist

bull when the parent owns directly or indirectly through subsidiaries more than half of the voting power of an entity

bull that presumption should be overcome if it can be clearly demonstrated that such ownership does not constitute control (SME‐FRS 195)


25



bull An entity which is a parent at the end of the financial year is required to present consolidated financial statements in accordance with the SME‐FRS except when(a) it is a wholly‐owned subsidiary of another entity or

(b) it meets all of the following conditions‐

i) it is a partially‐owned subsidiary of another entity

ii) at least 6 months before the end of the financial year the directors notify the members in writing of the directors intention not to prepare consolidated financial statements for the financial year and the notification does not relate to any other financial year and

iii) as at a date falling 3 months before the end of the fin year no member has responded to the notification by giving the directors a written request for the preparation of consol fin statements for the financial year or

(c) all of its subsidiaries qualify for exclusion from consolid in accordance with paragraph 192 (SME‐FRS 191)

Different from current HKFRS 10 but same

as s 379(3)



bull If a parent is exempt from preparing consolidated financial statements and does not prepare such financial statements

ndash it should prepare company‐level financial statements

bull Company‐level financial statements are those in which investments in subsidiaries associates and joint ventures are accounted for using the cost model set out in Section 6

bull If consolidated financial statements are presented they should include all subsidiaries of the parent

ndash except that one or more subsidiaries may be excludedfrom consolidation when

(a) their exclusion measured on an aggregate basis is not material to the group as a whole or

(b) their inclusion would involve expense and delay out of proportion to the value to members of the company (SME‐FRS 192)

26



bull A parent may not exclude a subsidiary from consolidation on the grounds of expense and delay out of proportion to the value to members of the company unless the members of the company have been informed in writing about and do not object to this exclusion

bull In order to satisfy this condition(a) the notification to the members of the company must

(i) state which financial year that the notification relates to (and the notification must not relate to more than one financial year)

(ii) specify the subsidiary or subsidiaries proposed to be excluded and

(iii) state the directorsrsquo reasons for believing that the inclusion of the subsidiary or subsidiaries in the consolidated financialstatements may involve expense and delay out of proportion to the value to the shareholders



bull In order to satisfy this condition(b) in the case of an entity which needs to obtain shareholder approval in

accordance with para 41 to 43 of SME‐FRF in order to qualify for the reporting exemption the notification to the members of the co proposing to exclude one or more subsidiaries from consolidation must be included as part of the notice to obtain the necessary shareholder approvals required to qualify for the reporting exemption and must be subject to the same approval and objection processes as apply to that approval

(c) in all other cases the notification must be sent to the members before the date of approval of the financial statements and must allow the members of the co a period of no less than one month to raise objections unless all the members of the co confirm that such a period is not necessary and

(d) within the time frame allowed in accordance with (b) or (c) no member has indicated to the co that they disagree with the directorsrsquo assertion that the inclusion of the subsidiary or subsidiaries would involve expense and delay out of proportion to the value to members of the co (SME‐FRS 193)

27



bull Consolidation procedures follows HKAS 27 except that

ndash On disposal of subsidiary

bull the gain or loss includes the cumulative amount of any exchange differences that relate to the subsidiary recognised in equity in accordance with Section 15

ndash except when undue cost or effort is needed to arrive at such cumulative amount of exchange difference and disclosure is made in the financial statements for such exclusion on a transaction by transaction basis (SME‐FRS 1911)

bull If an entity ceases to be a subsidiary but the investor (former parent) continues to hold some equity shares

ndash the carrying amount of any investment retained in theformer subsidiary at the date that the entity ceases to be a subsidiary should be regarded as the cost on initial measurement of an investment (SME‐FRS 1912)



bull Parentrsquos Company‐Level Statement of Financial Position

ndash In accordance with s 380(3)(a) and Part 1 of Sch 4 to the new CO if a parent company presents consolidated financial statements it must also include in the notes to the consolidated financial statements

a) a note which contains the parent companyrsquos company‐level statement of financial position in the format in which that statement would have been prepared if the parent company had not been required to prepare consolidated financial statements and

b) a note which discloses the movement in the parent companyrsquos reserves

ndash Further notes to the parent companyrsquos company‐level statement of financial position are not required (SME‐FRS 123)

28


4 Section 20 Associates

bull Section 20 specifies

ndash A reporting entity should make an accounting policy choice between

bull the benchmark treatment and

bull the allowed alternative treatment and

apply the policy consistently in accordance with para 22 ndash 23 (SME‐FRS 203)

Benchmark

Allowed Alternative

bull Cost model irrespective of company‐level or consolidated financial statements

bull Equity method for consolidated financial statements and

bull Cost model for all other cases


4 Section 21 Joint Ventures amp Other JA

bull Section 21 states

ndash A joint venture

bull is a contractual arrangement whereby two or more parties undertake an economic activity through an entity that is separate from the parties and subject to joint control (SME‐FRS 212)

bull does not include other forms of joint arrangements

ndash such as an arrangement to use the assets and other resources of the venturers or the joint ownership by the venturers of one or more assets contributed to or acquired for the purpose of the joint arrangement

ndash as these do not involve the establishment of an entity that is separate from the venturersthemselves (SME‐FRS 213)

Joint Venture

Other Joint Arrangements

29



bull A reporting entity should make an accounting policy choice between

ndash the benchmark treatment and

ndash the allowed alternative treatment and

apply the policy consistently in accordance with paragraphs 22 ndash 23 (SME‐FRS 214)

Joint Venture

Benchmark

Allowed Alternative






bull In respect of its interests in these other forms of joint arrangements a venturershould recognise in its financial statements(a) its assets and its share of any jointly controlled assets

classified according to the nature of the assets

(b) any liabilities that it has incurred and its share of any liabilities incurred jointly with the other venturers in relation to the joint arrangement

(c) any income from the sale or use of its share of the output of the joint arrangement together with its share of any expenses incurred by the joint arrangement and

(d) any expenses that it has incurred in respect of its

interest in the joint arrangement (SME‐FRS 213)


Similar to current HKFRS 11

30


5 Cash Flow Statement

bull New guidance on presenting a cash flow statement (optional)

ndash In accordance with section 11 of the SME‐FRS

bull an entity which prepares and presents its financial statements in accordance with the SME‐FRS is not required to include a cash flow statement in those financial statements

ndash However if an entity voluntarily includes a cash flow statement in those financial statements

bull then this cash flow statement should be prepared in accordance with the requirements of section 22 of the SME‐FRS (SME‐FRS 221)


6 Additional Disclosure for Income Taxes

bull Additional disclosure requirements in the Income Taxes Section

ndash An entity should disclose

a) the accounting policy adopted for income taxes and

b) major components of tax expense (income)

c) the applicable tax rates and jurisdictions in which the tax expense arose and

d) the amount of unused tax losses available to be carried forward against future taxable profits and the expiry dates of those losses (SME‐FRS 149)

New

New

31


7 Determining Reporting Currency

bull New guidance on determining the ldquoreporting currencyrdquo

ndash Consistent with the definition and guidance in HKAS 21 about ldquofunctional currencyrdquo

bull SME‐FRS defines

ndash An entityrsquos reporting currency is the currency of the primary economic environment in which the entity operates

bull SME‐FRS 151 requires

ndash Each entity should identify its reporting currency

bull SME‐FRS Section 15 provides other guidance similar to HKAS 21


8 Definition of Related Party

bull Definition of ldquorelated partyrdquo aligned with that of full HKFRS

ndash A related party is a person or entity that is related to the entity that is preparing its financial statements (the lsquoreporting entityrsquo)

a) A person or a close member of that personrsquos family is related to a reporting entity if that personi has control or joint control over the reporting entity

ii has significant influence over the reporting entity or

iii is a member of the key management personnel of the reporting entity or of a parent of the reporting entity

b) An entity is related to a reporting entity if any of the following conditions appliesi The entity and the reporting entity are members of the same group

(which means that each parent subsidiary and fellow subsidiary is related to the others)

ii One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member)

32





b) An entity is related to a reporting entity if any of the following conditions appliesiii Both entities are joint ventures of the same third party

iv One entity is a joint venture of a third entity and the other entity is an associate of the third entity

v The entity is a post‐employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity If the reporting entity is itself such a plan the sponsoring employers are also related to the reporting entity

vi The entity is controlled or jointly controlled by a person identified in (a)

vii A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity)


9 Active Market and Fair Value

bull Definitions of ldquoactive marketrdquo and ldquofair valuerdquo updated to similar to HKFRS 13

ndash An active market

bull is a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis

ndash Fair value

bull is the price that would be received to sell an assetor paid to transfer a liability in an orderly transaction between a knowledgeable willing buyer and a knowledgeable willing seller in an armrsquos length transaction

33


10 New Guidance on Revenue

bull Appendix 1 B20 ndash Determining whether anentity is acting as a principal or as an agent

ndash SME‐FRS Para 117 states that

bull In an agency relationship the gross inflows ofeconomic benefits include amounts collected on behalf of the principal and which do not result in increases in equity for the entity

bull The amounts collected on behalf of the principal are not revenue

bull Instead revenue is the amount of commission

ndash Determining whether an entity is acting as a principal or as an agent requires judgement and consideration of all relevant facts and circumstances

ndash An entity is acting as a principal when it has exposure to the significant risks and rewards associated with the sale of goods or the rendering of services




ndash Features that indicate that an entity is acting as a principal include

a) the entity has the primary responsibility for providing the goods or services to the customer or for fulfilling the order for example by being responsible for the acceptability of the products or services ordered or purchased by the customer

b) the entity has inventory risk before or after the customer order during shipping or on return

c) the entity has latitude in establishing prices either directly or indirectly for example by providing additional goods or services and

d) the entity bears the customerrsquos credit risk for the amount receivable from the customer

34




ndash An entity is acting as an agent when it does not have exposure to the significant risks and rewards associated with the sale of goods or the rendering of services

ndash One feature indicating that an entity is acting as an agent is that the amount the entity earns is predetermined being either

bull a fixed fee per transaction or

bull a stated percentage of the amount billed to the customer


11 Guidance on Non-Exempted Disclosure

bull Appendix 1 Section D

ndash As explained in para 21 of the SME‐FRF unless specifically exempt from a particular requirement

bull the financial statements and directorsrsquo report prepared by a qualifying entity are required to follow the same requirements in the new CO as apply to full financial statements and directorsrsquo reports

ndash These non‐exempt disclosure requirements which apply under the new CO are set out below

bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35


HKFRS 15 Revenuefrom Contracts with Customers


HKFRS 15 Issued in 2014

1 Identify the Contract with a Customer

2 Identify the Performance Obligations

3 Determine the Transaction Price

4 Allocate Transaction Price to Performance

Obligations

5 Recognise Revenue When a Performance Obligation is Satisfied

bull HKFRS 15

ndash establishes a comprehensive framework for determining

bull when to recognise revenue and

bull how much revenue to recognise

bull The core principle in that framework is that an entity recognises revenue ndash to depict the transfer of promised goods or services to customers

ndash in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services

bull Under HKFRS 15 an entity applies a 5‐step approach in recognising revenue

36







Obligations


bull Effective Date

ndash An entity shall apply HKFRS 15 for annual reporting periods beginning on or after 1 January 2017

ndash Earlier application is permitted

ndash If an entity applies HKFRS 15 it shall disclose that fact







Obligations


bull HKFRS 15 supersedes the following Standards

a HKAS 11 Construction Contracts

b HKAS 18 Revenue

c HK(IFRIC)‐Int 13 Customer Loyalty Programmes

d HK(IFRIC)‐Int 15 Agreements for the Construction of Real Estate

e HK(IFRIC)‐Int 18 Transfers of Assets from Customers

f HK(SIC)‐Int 31 Revenue mdash Barter Transactions Involving Advertising Services

37


Contents in HKFRS 15 Issued in 2014





Obligations


A Objective

B Scope

C Recognitionndash Identifying the contract (Step 1)

ndash Identifying performance obligations (Step 2)

ndash Satisfaction of performance obligations (Step 5)

D Measurementndash Determining the transaction price (Step 4)

ndash Allocating the transaction price to performance obligations (Step 5)

E Contract costs (not to be discussed today)

F Presentation (not to be discussed today)

G Disclosure (not to be discussed today)


A Objective

bull The objective of HKFRS 15 is

ndash to establish the principles that an entity shall apply to report useful information to users of financial statements about the nature amount timing and uncertainty of revenue and cash flows arising from a contract with a customer (HKFRS 151)

bull To meet the objective

ndash The core principle of HKFRS 15 is that an entity shall recognise revenue

bull to depict the transfer of promised goods or services to customers

bull in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services (HKFRS 152)

bull When applying HKFRS 15 an entity shall

ndash consider the terms of the contract and all relevant facts and circumstances

ndash apply HKFRS 15 including the use of any practical expedients consistently to contracts with similar characteristics and in similar circumstances (HKFRS 153)

38


A Objective

bull HKFRS 15 specifies the accounting for an individual contract with a customer

ndash However as a practical expedient an entity may applyHKFRS 15 to a portfolio of contracts (or performance obligations) with similar characteristics

bull if the entity reasonably expects that the effects on the financial statements of applying HKFRS 15 to the portfolio would not differ materially from applying HKFRS 15 to the individual contracts (or performance obligations) within that portfolio

ndash When accounting for a portfolio an entity shall use estimates and assumptions that reflect the size and composition of the portfolio (HKFRS 154)


B Scope

bull An entity shall apply HKFRS 15 to all contracts with customers except the following

ndash lease contracts within the scope of HKAS 17 Leases

ndash insurance contracts within the scope of HKFRS 4 Insurance Contracts

ndash financial instruments and other contractual rights or obligations within the scope of

bull HKFRS 9 Financial Instruments (or HKAS 39 if HKFRS 9 not yet applied)

bull HKFRS 10 Consolidated Financial Statements HKFRS 11 Joint Arrangements HKAS 27 Separate Financial Statements and HKAS 28 Investments in Associates and Joint Ventures and

ndash non‐monetary exchanges between entities in the same line of business to facilitate sales to customers or potential customers

bull For example HKFRS 15 would not apply to a contract between two oil companies that agree to an exchange of oil to fulfil demand from their customers in different specified locations on a timely basis (HKFRS155)

39


C Recognition and D Measurement





Obligations



C Recognition




bull Step 1 Identifying the Contract(s)

ndash Combination of contracts

ndash Contract modifications

bull Step 2 Identifying Performance Obligations

ndash Promises in contracts with customers

ndash Distinct goods or services

bull Step 5 Satisfaction of performance obligations

ndash Performance obligations satisfied over time

ndash Performance obligations satisfied at a point in time

ndash Measuring progress towards complete satisfaction of a performance obligation

40


Step 1 Identify the Contract(s)



ndash A contract is an agreement between two or more parties that creates enforceable rights and obligations

ndash The requirements of HKFRS 15 apply to each contract that has been agreed upon with a customer and meets specified criteria

bull In some cases HKFRS 15 requires an entity to combine contracts and account for them as one contract

bull HKFRS 15 also provides requirements for the accounting for contract modifications (HKFRS 15IN7)



bull An entity shall account for a contract with a customer that is within the scope of HKFRS 15 only when all of the following criteria (ie contract criteria) are met

a the parties to the contract have approved the contract (in writing orally or in accordance with other customary business practices) and are committed to perform their respective obligations

b the entity can identify each partyrsquos rights regarding the goods or services to be transferred

c the entity can identify the payment terms for the goods or services to be transferred

d the contract has commercial substance(ie the risk timing or amount of the entityrsquosfuture cash flows is expected to change as a result of the contract) and

41




e it is probable that the entity will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer

bull In evaluating whether collectability of an amount of consideration is probable an entity shall consider only the customerrsquos ability and intention to pay that amount of consideration when it is due

bull The amount of consideration to which the entity will be entitled may be less than the price stated in the contract if the consideration is variable because the entity may offer the customer a price concession (see HKFRS 1552) (HKFRS 159)




bull An entity shall combine two or more contracts entered into at or near the same time with the same customer (or related parties of the customer) and account for the contracts as a single contract if one or more of the following criteria are met

a the contracts are negotiated as a package with a single commercial objective

b the amount of consideration to be paid in one contract depends on the price or performance of the other contract or

c the goods or services promised in the contracts (or some goods or services promised in each of the contracts) are a single performance obligation in accordance with HKFRS 1522ndash30 (HKFRS 1517)

Combination of Contracts

Contract Modification

42




bull An entity shall account for a contract modification as a separate contract if both of the following conditions are present

a the scope of the contract increases because of the addition of promised goods or services that are distinct (in accordance with HKFRS 1526ndash30) and

b the price of the contract increases by

bull an amount of consideration that reflects the entityrsquos stand‐alone selling prices of the additional promised goods or servicesand

bull any appropriate adjustments to that price to reflect the circumstances of the particular contract (HKFRS 1520)



Separate Contract




bull If a contract modification is not accounted for as a separate contract in accordance with HKFRS 1520 (as set out in last slide)

ndash an entity shall account for the promised goods or services not yet transferred at the date of the contract modification (ie the remaining promised goods or services) in whichever of the following ways is applicable

a as if it were a termination of the existing contractand the creation of a new contract if helliphellip

b as if it were a part of the existing contract if helliphellip

c a combination of (a) and (b) helliphellip


New Contract

Part of Existing Contract

Separate Contract

43







Obligations



Step 2 Identify Performance Obligations


bull Step 2 Identifying the Performance Obligations in the Contract

ndash A contract includes promises to transfer goods or services to a customer

ndash If those goods or services are distinct the promises

bull are performance obligations and

bull are accounted for separately

ndash A good or service is distinct if

bull the customer can benefit from the good or service on its own or together with other resources that are readily available to the customer and

bull the entityrsquos promise to transfer the good or service to the customer is separately identifiablefrom other promises in the contract (HKFRS 15IN7)

Performance obligations

44



bull At contract inception an entity shall

ndash assess the goods or services promised in a contract with a customer and

ndash identify as a performance obligation each promise to transfer to the customer either

a a good or service (or a bundle of goods or services) that is distinct or

b a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer (see HKFRS 1523) (HKFRS 1522)

Performance obligationsHKFRS 15 defines performance obligation as

bull A promise in a contract with a customer to transfer to the customer either


b a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer



bull A good or service that is promised to a customer is distinct if bothof the following criteria are met

a the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (ie the good or service is capable of being distinct) and

b the entityrsquos promise to transfer the good or service to the customer is separately identifiable from other promises in the contract(ie the good or service is distinct within the context of the contract) (HKFRS 1527)


45



bull If a promised good or service is not distinct

ndash an entity shall combine that good or service with other promised goods or services until it identifies a bundle of goods or services that is distinct

bull In some cases that would result in the entity accounting for all the goods or services promised in a contract as a single performance obligation (HKFRS 1530)








Obligations


46


D Measurement



Obligations

bull Step 3 Determining the Transaction Prices

ndash Variable consideration

ndash The existence of a significant financing component in the contract

ndash Non‐cash consideration

ndash Consideration payable to a customer

bull Step 4 Allocating the Transaction Price to Performance Obligationsndash Allocation based on stand‐alone selling prices

ndash Allocation of a discount

ndash Allocation of variable consideration

ndash Changes in the transaction price


Step 3 Determine Transaction Price



ndash The transaction price

bull is the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer

bull can be a fixed amount of customer consideration but it may sometimes include

ndash variable consideration or

ndash consideration in a form other than cash

bull is also adjusted for the effects of the time value of money if the contract includes a significant financing component and for any consideration payable to the customer (HKFRS 15IN7)

47





ndash If the consideration is variable an entity estimates the amount of consideration to which it will be entitled in exchange for the promised goods or services

ndash The estimated amount of variable consideration will be included in the transaction price

bull only to the extent that it is highly probablethat a significant reversal in the amount of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is subsequently resolved (HKFRS 15IN7)



bull To determine the transaction price an entity shall consider

ndash the terms of the contract and

ndash its customary business practices

bull The consideration promised in a contract with a customer may include

ndash fixed amounts

ndash variable amounts or

ndash both (HKFRS 1547)

HKFRS 15 defines transaction price as

bull The amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer excluding amounts collected on behalf of third parties (for example some sales taxes)

48



bull The nature timing and amount of consideration promised by a customer affect the estimate ofthe transaction price

bull When determining the transaction price anentity shall consider the effects of all of thefollowing

a variable consideration (see HKFRS 1550ndash55 and 59)

b constraining estimates of variable consideration (see HKFRS 1556ndash58)

c the existence of a significant financing componentin the contract (see HKFRS 1560ndash65)

d non‐cash consideration (see HKFRS 1566ndash69) and

e consideration payable to a customer(see HKFRS 1570ndash72) (HKFRS 1548)

Variable Consideration

Constraining Estimates of Variable Con

Significant Financing Component

Non‐cash Consideration

Consideration Payable to Customer



bull If the consideration promised in a contract includes a variable amount

ndash an entity shall estimate the amount of consideration to which the entity will be entitled in exchange for transferring the promised goods or services to a customer (HKFRS 1550)


49



bull An entity shall estimate an amount of variable consideration by using either of the following methods depending on which method the entity expects to better predict the amount of consideration to which it will be entitled

a The expected valuemdash the expected value is the sum of probability‐weighted amounts in a range of possible consideration amounts

bull An expected value may be an appropriate estimate of the amount of variable consideration if an entity has a large no of contracts with similar characteristics

b The most likely amountmdash the most likely amount is the single most likely amount in arange of possible consideration amounts (ie the single most likely outcome of the contract)

bull The most likely amount may be an appropriate estimate of the amount of variable consideration ifthe contract has only two possible outcomes (eg an entity either achieves a performance bonus or does not) (HKFRS 1553)


Expected Value

Most Likely Amount



bull An entity shall include in the transaction price some or all of an amount of variable consideration estimated in accordance with HKFRS 1553

ndash only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is subsequently resolved (HKFRS 1556)

bull In assessing such highly probable circumstance

ndash an entity shall consider both the likelihood and the magnitude of the revenue reversal


50



bull In determining the transaction price

ndash an entity shall adjust the promised amount of consideration for the effects of the time value of money

bull if the timing of payments agreed to by the parties to the contract (either explicitly or implicitly) provides the customer or the entity with a significant benefit of financing the transfer of goods or services to the customer

bull In those circumstances the contract containsa significant financing component

ndash A significant financing component may exist regardless of whether the promise of financing is

bull explicitly stated in the contract or

bull implied by the payment terms agreed to bythe parties to the contract (HKFRS 1560)




bull As a practical expedient an entity need not adjustthe promised amount of consideration for the effects of a significant financing component

ndash if the entity expects at contract inception that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less (HKFRS 1563)


51



bull An entity shall present

ndash the effects of financing (interest revenue or interest expense) separatelyfrom

ndash revenue from contracts with customers in the statement of comprehensive income

bull Interest revenue or interest expense is recognised only to the extent that a contract asset (or receivable) or a contract liability is recognised in accounting for a contract with a customer (HKFRS 1565)




bull To determine the transaction price for contracts in which a customer promises consideration in a form other than cash

ndash an entity shall measure the non‐cash consideration (or promise of non‐cash consideration) at fair value (HKFRS 1566)

bull If an entity cannot reasonably estimate the fair value of the non‐cash consideration

ndash the entity shall measure the consideration indirectly by reference tothe stand‐alone selling price of the goods or services promised to the customer (or class of customer) in exchange for the consideration (HKFRS 1567)


Fair Value

52



bull An entity shall account for consideration payable to a customer

ndash as a reduction of the transaction price and therefore of revenue

bull unless the payment to the customer is in exchange for a distinct good or service (as described in HKFRS 1526ndash30) that the customer transfers to the entity

bull If the consideration payable to a customer includes a variable amount

ndash an entity shall estimate the transaction price(including assessing whether the estimate of variable consideration is constrained) in accordance with HKFRS 1550ndash58 (HKFRS 1570)








Obligations


53


Step 4 Allocate Transaction Price to PO


Obligations

bull Step 4 Allocating the Transaction Price to Performance Obligations

ndash An entity typically allocates the transaction price to each performance obligation on the basis of the relative stand‐alone selling prices of each distinct good or service promised in the contract

bull If a stand‐alone selling price is not observable an entity estimates it

ndash Sometimes the transaction price includes a discount or a variable amount of consideration that relates entirely to a part of the contract

bull HKFRS 15 specify when an entity allocates the discount or variable consideration to one or more but not all performance obligations (or distinct goods or services) in the contract (HKFRS 15IN7)



bull The objective when allocating the transaction price is

ndash for an entity to allocate the transaction price to each performance obligation (or distinct good or service) in an amount that depicts the amount of consideration to which the entity expects to be entitled in exchange fortransferring the promised goods or services to the customer (HKFRS 1573)


Obligations

Based on Stand‐alone Selling Price (SASP)

Allocation of a Discount

Allocation of Variable Consideration

54



bull To meet the allocation objective an entity shall allocate the transaction price to each performance obligation identified in the contract on a relative stand‐alone selling price basis in accordance with HKFRS 1576ndash80 except as specified in

ndash HKFRS 1581ndash83 (for allocating discounts) and

ndash HKFRS 1584ndash86 (for allocatingconsideration that includes variable amounts) (HKFRS 1574)





Obligations



bull To allocate the transaction price to each performance obligation on a relative stand‐alone selling price basis an entity shall

ndash determine the stand‐alone selling price at contract inception of the distinct good or service underlying each performance obligation in the contract and

ndash allocate the transaction price in proportion tothose stand‐alone selling prices (HKFRS 1576)


HKFRS 15 defines stand‐alone selling price as

bull The price at which an entity would sell a promised good or service separately to a customer

55



bull The best evidence of a stand‐alone selling price is

ndash the observable price of a good or service when the entity sells that good or service separatelyin similar circumstances and to similar customers

bull A contractually stated price or a list price for a good or service may be (but shall not be presumed to be) the stand‐alone selling price of that good or service (HKFRS 1577)




bull If SASP is not directly observable

ndash an entity shall estimate the SASP at an amount that would result in the allocation of the transaction price meeting the allocation objective in HKFRS 1573

bull When estimating SASP

ndash an entity shall consider all information(including market conditions entity‐specific factors and information about the customer or class of customer) that is reasonably available to the entity

ndash In doing so an entity shall

bull maximise the use of observable inputs and

bull apply estimation methods consistently in similar circumstances (HKFRS 1578)


56



bull Suitable methods for estimating SASP of a good or service include (not limited to)

a Adjusted market assessment approach

b Expected cost plus a margin approach

c Residual approach

d Combination of the above








Obligations


57


Step 5 Satisfy Performance Obligations



ndash A an entity recognises revenue when (or as) it satisfies a performance obligation by transferring a promised good or service to a customer

bull which is when the customer obtains control of that good or service

ndash The amount of revenue recognised is the amount allocated to the satisfied performance obligation (HKFRS 15IN7)





ndash A performance obligation may be satisfied

bull at a point in time (typically for promises to transfer goods to a customer) or

bull over time (typically for promises to transfer services to a customer)

ndash For performance obligations satisfied over time an entity recognises revenue over time by selecting an appropriate method for measuring the entityrsquos progress towards complete satisfaction of that performance obligation (HKFRS 15IN7)

58



bull An entity shall recognise revenue

ndash when (or as) the entity satisfies a performance obligation by transferring a promised good or service (ie an asset) to a customer

bull An asset is transferred

ndash when (or as) the customer obtains control of that asset (HKFRS 1531)



bull For each performance obligation identified in accordance with HKFRS 1522ndash30

ndash an entity shall determine at contract inception whether it

bull satisfies the performance obligation over time(in accordance with HKFRS 1535ndash37) or

bull satisfies the performance obligation at a point in time (in accordance with HKFRS 1538)

ndash If an entity does not satisfy a performance obligation over time the performance obligation is satisfied at a point in time (HKFRS 1532)

Over Time

At a Point in Time

59



bull Goods and services are assets even if only momentarily when they are received and used (as in the case of many services)

bull Control of an asset

ndash refers to the ability to direct the use of and obtain substantially all of the remaining benefits from the asset

ndash includes the ability to prevent other entities from directing the use of and obtaining the benefits from an asset

bull When evaluating whether a customer obtains control of an asset

ndash an entity shall consider any agreement to repurchase the asset (see HKFRS 15B64ndashB76) (HKFRS 1533)

Over Time

At a Point in Time



bull An entity transfers control of a good or service over time and therefore satisfies a performance obligation and recognises revenue over time if one of the following criteria is met

a the customer simultaneously receives and consumesthe benefits provided by the entityrsquos performance as the entity performs (see HKFRS 15B3ndashB4)

b the entityrsquos performance creates or enhances an asset (eg work in progress) that the customer controls as the asset is created or enhanced (see HKFRS 15B5) or

c the entityrsquos performance does not create an asset with an alternative use to the entity (see HKFRS 1536) and the entity has an enforceable right to payment for performance completed to date (see HKFRS 1537) (HKFRS 1535)

Over Time

60



bull If a performance obligation is not satisfied over time in accordance with HKFRS 1535ndash37 an entity satisfies the performance obligation at a point in time

bull To determine the point in time at which a customer obtains control of a promised asset and the entity satisfies a performance obligation

ndash the entity shall consider the requirements for control in HKFRS 1531ndash34 (HKFRS 1538)

At a Point in Time



bull In addition an entity shall consider indicators of the transfer of control which include but are not limited to the following

a The entity has a present right to payment for the asset

b The customer has legal title to the asset

c The entity has transferred physical possession of the asset

d The customer has the significant risks andrewards of ownership of the asset

e The customer has accepted the asset

At a Point in Time

61



Measuring Progress Towards Complete Satisfaction of a Performance Obligation

ndash For each performance obligation satisfied over time in accordance with HKFRS 1535ndash37

bull an entity shall recognise revenue over time by measuring the progress towards complete satisfaction of that performance obligation

ndash The objective when measuring progress is to depict an entityrsquos performance in transferring control of goods or services promised to a customer (ie the satisfaction of an entityrsquos performance obligation) (HKFRS 1539)

Over Time

Measuring Progress




ndash An entity shall apply a single method of measuring progress for each performance obligation satisfied over time and the entity shall apply that method consistently to similar performance obligations and in similar circumstances

ndash At the end of each reporting period

bull an entity shall remeasure its progress towards complete satisfaction of a performance obligation satisfied over time (HKFRS 1540)

Over Time

Measuring Progress

62



Methods for Measuring Progress

ndash Appropriate methods of measuring progress include output methods and input methods (HKFRS 15B14ndashB19 provide guidance)

ndash In determining the appropriate method for measuring progress an entity shall consider the nature of the good or service that the entity promised to transfer to the customer (HKFRS 1541)

ndash When applying a method for measuring progress an entity shall exclude from the measure of progress any goods or services for which the entity does not transfer control to a customer

ndash Conversely an entity shall include in the measure of progress any goods or services for which the entity does transfer control to a customer when satisfying that performance obligation (HKFRS 1542)

Over Time

Measuring Progress







Obligations


bull When (or as) a performance obligation is satisfied

ndash an entity shall recognise as revenue

bull the amount of the transaction price(which excludes estimates of variable consideration that are constrained in accordance with HKFRS 1556ndash58) that is allocated to that performance obligation (HKFRS 1546)

63





bull Effective Date

ndash An entity shall apply HKFRS 9 for annual periods beginning on or after 1 January 2018


ndash If an entity elects to apply HKFRS 9 early it must disclose that fact and apply all of the requirements in HKFRS 9 at the same time (but see also paragraphs 712 7221 and 732)

ndash It shall also at the same time apply the amendments in Appendix C (para 711)

64



1 Objective

2 Scope

3 Recognition and Derecognition

4 Classification

5 Measurement

6 Hedge Accounting

7 Effective Date and Transition

bull Transferred from HKAS 39

bull Debt instruments can now be measured at fair value through other comprehensive income

bull Initial measurement of trade receivablebull New impairment requirements

bull Changes mainly on hedge conditions



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65


Chapter 41 Classification of FA

bull Unless para 415 of HKFRS 9 (so‐called ldquofair value optionrdquo) applies an entity shall classify financial assets as subsequently measured at either

ndash amortised cost

ndash fair value through other comprehensive income or

ndash fair value through profit or loss

on the basis of both

a) the entityrsquos business model for managing the financial assets and

b) the contractual cash flow characteristics of the financial asset (para 411)

Amortised CostFair Value Through Other Comprehensive income

Fair Value Through Profit or Loss



bull A financial asset shall be measured at fair value through other comprehensive income if both of the following conditions are met

a the financial asset is held within a business model whose objective is achieved by both

bull collecting contractual cash flows and selling financial assets and

b the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding

bull Para B411ndashB4126 provide guidance on how to apply these conditions (para 412A)

Held within a business model to collect contractual

cash flow and for sale

Fair Value Through Other Comprehensive income

66



bull For the purpose of applying para 412(b) and 412A(b)a principal is the fair value of the financial asset at initial recognition Para

B417B provides additional guidance on the meaning of principal

b interest consists of consideration for the time value of money for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs as well as a profit margin (Para B417A and B419AndashB419E provide additional guidance on the meaning of interest) (para 413)

Yes

Contractual cash flowsare solely principal and

interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67


Chapter 5 Measurement

Initial measurement

bull Except for trade receivables within the scope of para 513

ndash at initial recognition an entity shall measure a financial asset or financial liability

bull at its fair value

bull plus or minus in the case of a financial asset or financial liability not at fair value through profit or loss transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability (para 511)

bull However if the fair value of the financial asset or financial liability at initial recognition differs from the transaction price an entity shall apply para B512A (para 511A)

Initial MeasurementFair Value

Transaction Cost

+



Subsequent Measurement of Financial Assets

bull After initial recognition an entity shall measure a financial asset in accordance with para 411ndash415 at

a amortised cost

b fair value through other comprehensive income or

c fair value through profit or loss (para 521)



68



bull An entity shall apply the impairment requirements in Section 55

ndash to financial assets that are measured at amortised cost in accordance with para 412 and

ndash to financial assets that are measured at fair value through other comprehensive income in accordance with para 412A (para 522)




New Impairment Requirements



bull An entity shall apply the hedge accounting requirements in para 658ndash6514 (and if applicable para 89ndash94 of HKAS 39 for the fair value hedge accounting for a portfolio hedge of interest rate risk) to a financial asset that is designated as a hedged item (para 523)




69



bull Interest revenue shall be calculated by using the effective interest method (see Appendix A and para B541ndashB547)

ndash This shall be calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for

a purchased or originated credit‐impaired financial assets

ndash For those financial assets the entity shall apply the credit‐adjusted effective interest rate to the amortised cost of the financial asset from initial recognition

b financial assets that are not purchased or originated credit‐impaired financial assets but subsequently have become credit‐impaired financial assets

ndash For those financial assets the entity shall apply the effective interest rate to the amortised cost of the financial asset in subsequent reporting periods (para 541)

Amortised Cost Measurement on Financial Assets


Chapter 55 Impairment

Topics Covered

1 Recognition of Expected Credit Losses

ndash General approach

ndash Determining significant increases in credit risk

ndash Modified financial assets

ndash Purchased or originated credit‐impaired financial assets

2 Simplified Approach for Trade Receivables Contract Assets and Lease Receivables

3 Measurement of Expected Credit Losses

70



bull An entity shall recognise a loss allowance for expected credit losses on

ndash a financial asset that is measured in accordance with para 412 or 412A

ndash a lease receivable

ndash a contract asset or

ndash a loan commitment and a financial guarantee contract to which the impairment requirements apply in accordance with para 21(g) 421(c) or 421(d) (para 551)

Recognition of Expected Credit Losses ndash General Approach

HKFRS 9 defines expected credit losses as

bull The weighted average of credit losses with the respective risks of a default occurring as the weights




HKFRS 9 defines credit losses as

bull The difference between

all contractual cash flows that are due to an entity in accordance with the contract and

all the cash flows that the entity expects to receive

(ie all cash shortfalls) discounted at the original effective interest rate (or credit‐adjusted effective interest rate for purchased or originated credit‐impaired financial assets)

71





bull An entity shall estimate cash flows by considering all contractual terms of the financial instrument (for example prepayment extension call and similar options) through the expected life of that financial instrument

bull The cash flows that are considered shall include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms

bull There is a presumption that the expected life of a financial instrument can be estimated reliably

bull However in those rare cases when it is not possible to reliably estimate the expected life of a financial instrument the entity shall use the remaining contractual term of the financial instrument




HKFRS 9 defines

bull Lifetime expected credit losses as

The expected credit losses that result from all possible default events over the expected life of a financial instrument

bull 12‐month expected credit losses as

The portion of lifetime expected credit losses that represent the expected credit losses that result from default events on a financial instrument that are possible within the 12 months after the reporting date

72



bull An entity shall apply the impairment requirements for the recognition and measurement of a loss allowance for

ndash financial assets that are measured at fair value through other comprehensive income in accordance with para 412A

bull However the loss allowance

ndash shall be recognised in other comprehensive income and

ndash shall not reduce the carrying amount ofthe financial asset in the statement of financial position (para 552)





bull Subject to para 5513ndash5516 at each reporting date

ndash an entity shall measure the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition (para 553)

bull The objective of the impairment requirements is

ndash to recognise lifetime expected credit losses forall financial instruments for which there have been significant increases in credit risk since initial recognition mdash whether assessed on an individual or collective basis mdash considering all reasonable and supportable information including that which is forward‐looking (para 554)


73



bull Subject to para 5513ndash5516 if at the reporting date the credit risk on a financial instrument has not increased significantly since initial recognition

ndash an entity shall measure the loss allowance for that financial instrument at an amount equal to 12‐month expected credit losses (para 555)

bull For loan commitments and financial guarantee contracts

ndash the date that the entity becomes a party to the irrevocable commitment shall be considered to be the date of initial recognition for the purposes of applying the impairment requirements (para 556)




bull If an entity has measured the loss allowance for a financial instrument at an amount equal to lifetime expected credit losses in the previous reporting period but determines at the current reporting date that para 553 is no longer met

ndash the entity shall measure the loss allowance at an amount equal to 12‐month expected credit losses at the current reporting date(para557)

bull An entity shall recognise in profit or loss as an impairment gain or loss

ndash the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised in accordance with HKFRS 9 (para 558)


74


Chapter 55 ImpairmentExample

bull Entity A originates a single 10 year amortising loan for $1 million

ndash Taking into consideration

bull the expectations for instruments with similar credit risk (using reasonable and supportable information that is available without undue cost or effort)

bull the credit risk of the borrower and

bull the economic outlook for the next 12 months

ndash Entity A estimates that the loan at initial recognition has a probability of default (PD) of 05 per cent over the next 12 months

bull Entity A also determines that changes in the 12‐month PD are a reasonable approximation of the changes in the lifetime PD for determining whether there has been a significant increase in credit risk since initial recognition



bull At the reporting date (which is before payment on the loan is due)

ndash there has been no change in the 12‐month PD and

ndash Entity A determines that there was no significant increase in credit risk since initial recognition

bull Entity A determines that 25 per cent of the gross carrying amount will be lostif the loan defaults (ie the LGD is 25 per cent)

ndash Entity A measures the loss allowance at an amount equal to 12‐month expected credit losses using the 12‐month PD of 05 per cent

ndash Implicit in that calculation is the 995 per cent probability that there is no default

bull At the reporting date the loss allowance for the 12 month expected credit losses is $1250 (05 times 25 times $1000000)

75



bull At each reporting date

ndash an entity shall assess whether the credit risk on a financial instrument has increased significantly since initial recognition

bull When making the assessment an entity shall use

ndash the change in the risk of a default occurring over the expected life of the financial instrument

ndash instead of the change in the amount of expected credit losses

Recognition of Expected Credit Losses

ndash Determining Significant Increases in Credit Risk



bull An entity may assume that

ndash the credit risk on a financial instrument has not increased significantly since initial recognition if the financial instrument is determined to have low credit risk at the reporting date (see para B5522‒B5524) (para5510)



76



bull If the contractual cash flows on a financial asset have been renegotiated or modified and the financial asset was not derecognised

ndash an entity shall assess whether there has been a significant increase in the credit risk of the financial instrument in accordance with para 553 by comparing

a the risk of a default occurring at the reporting date (based on the modified contractual terms) and

b the risk of a default occurring at initial recognition (based on the original unmodified contractual terms) (para5512)

Recognition of Expected Credit Losses ndash Modified Financial Assets



bull Despite para 553 and 555 at the reporting date an entity shall

ndash only recognise the cumulative changes in lifetime expected credit losses since initial recognition as a loss allowance for purchased or originated credit‐impaired financial assets (para 5513)

bull At each reporting date an entity shall recognise in profit or loss the amount of the change in lifetime expected credit losses as an impairment gain or loss

bull An entity shall recognise favourable changes in lifetime expected credit losses as an impairment gain

ndash even if the lifetime expected credit losses are less than the amount of expected credit losses that were included in the estimated cash flows on initial recognition (para5514)


ndash Purchased or Originated Credit‐Impaired Financial Assets

77



bull Despite para 553 amp 555 an entity shall always measure the loss allowanceat an amount equal to lifetime expected credit losses for

a trade receivables or contract assets that result from transactions that are within the scope of HKFRS 15 and that

i do not contain a significant financing component (or when the entity applies the practical expedient for contracts that are one year or less) in accordance with HKFRS 15 or

ii contain a significant financing component in accordance with HKFRS 15 if the entity chooses as its accounting policy to measure the loss allowance at an amount equal to lifetime expected credit losses

ndash That accounting policy shall be applied to all such trade receivables or contract assets but may be applied separately to trade receivables and contract assets

Simplified Approach for Trade Receivables Contract Assets and Lease Receivables




b lease receivables that result from transactions that are within the scope of HKAS 17 if the entity chooses as its accounting policy to measure the loss allowance at an amount equal to lifetime expected credit losses

bull That accounting policy shall be applied to all lease receivables but may be applied separately to finance and operating lease receivables (para 5515)

bull An entity may select its accounting policy for trade receivables lease receivables and contract assets independently of each other (para 5516)


78



bull An entity shall measure expected credit losses of a financial instrument in a way that reflects

a an unbiased and probability‐weighted amount that is determined by evaluating a range of possible outcomes

b the time value of money and

c reasonable and supportable information that is available without undue cost or effort at the reporting date about

bull past events

bull current conditions and

bull forecasts of future economic conditions(para 5517)

Measurement of Expected Credit Losses


Chapter 57 Gains and Losses

bull A gain or loss on a financial asset or financial liability that is measured at fair value shall be recognised in profit or loss unless

a it is part of a hedging relationship (see para 658ndash6514 and if applicable para 89ndash94 of HKAS 39 for the fair value hedge accounting for a portfolio hedge of interest rate risk)

b it is an investment in an equity instrument and the entity has elected to present gains and losses on that investment in OCI in accordance with para 575

c it is a financial liability designated as at fair value through profit or loss and the entity is required to present the effects of changes in the liabilityrsquos credit risk in other comprehensive income in accordance with para 577 or

d it is a financial asset measured at fair value through OCI in accordance with para 412A and the entity is required to recognise some changes in fair value in OCI in accordance with para 5710 (para 571)



79


Chapter 6 Hedge Accounting

bull More principles‐based to align hedge accounting more closely with risk management

bull Conditions for hedge accounting rewritten

bull Hedge effectiveness assessment is forward‐looking only and no arbitrary bright line effectiveness range

bull Credit risk is not expected to dominate the value change in the hedge relationship

bull No changes on 3 types of hedging accounting fair value cash flow and net investment hedge


Hedging ndash Hedge Accounting Conditions

A Hedging Relationship qualifies for

Hedge Accounting if and only if all the

Conditions for Hedge Accounting are

met

Hedging Relationship

Hedged ItemHedging

Instrument

Conditions forHedge Accounting

HKFRS 9 has a choice for an entity to use the hegding model

in HKFRS 9 or HKAS 39

Fair Value Hedge

Cash Flow Hedge

Hedge of Net Investment in a Hedge of Net Investment in a Foreign Operation

HKFRS 9 retains the mechanics of 3 types of

hedge accounting

80


LAM Chi Yuen Nelson 林智遠nelsonnelsoncpacomhkwwwNelsonCPAcomhktrainingwwwFacebookcomNelsonCPA

Financial Reporting Update 9 March 2015


QampA SessionQampA Session



2



bull Amendments to HKAS 19 (2011) Employee Benefits ndash Defined Benefit Plans Employee Contributions



bull SME‐FRF and SME‐FRS (Revised 2014) (pursuant to the New Companies Ordinance (Cap 622) effective from 3 Mar 2014)

1 Jul 2014



3 Mar 2014 (early application not allowed)





Effective after 2015 Dec Year‐End

bull Amendments to HKFRS 11 Accounting for Acquisitions of Interests in Joint Operations

bull Amendments to HKAS 16 and HKAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation

bull Amendments to HKAS 16 and HKAS 41 Agriculture Bearer Plants

bull Amendments to HKAS 27 Equity Method in Separate Financial Statements

bull Amendments to HKFRS 10 and HKAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

bull Annual Improvements to HKFRSs 2012-2014 Cycle bull Amendments to HKAS 1 Disclosure Initiative bull Amendments to HKFRS 10 11 and 12 Investment Entities

Applying the Consolidation Exceptionbull HKFRS 14 Regulatory Deferral Accountsbull HKFRS 15 Revenue from Contracts with Customersbull HKFRS 9 (2014) Financial Instruments

1 Jan2016

1 Jan2016

1 Jan2016

1 Jan2016

1 Jan2016

1 Jan2016 (or other) 1 Jan2016 1 Jan2016

1 Jan2016 1 Jan2017 1 Jan2018




3






(a) hellip


4











5










6


Introduction







7


Introduction















8



bull A levy is














the levy


No

No



9





p p




Yes




Todayrsquos Agenda


10









11










12





























13















Meet the size test


2015 times times

2016 times

2017 times

2018 times

2019 times

14







Previouslyqualified

Meet the size test


2015

2016 times

2017 times

2018 times







15

















16



















17













18











4 New Sections






19














20













bull assets given







21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








3






(a) hellip


4











5










6


Introduction







7


Introduction















8



bull A levy is














the levy


No

No



9





p p




Yes




Todayrsquos Agenda


10









11










12





























13















Meet the size test


2015 times times

2016 times

2017 times

2018 times

2019 times

14







Previouslyqualified

Meet the size test


2015

2016 times

2017 times

2018 times







15

















16



















17













18











4 New Sections






19














20













bull assets given







21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








4











5










6


Introduction







7


Introduction















8



bull A levy is














the levy


No

No



9





p p




Yes




Todayrsquos Agenda


10









11










12





























13















Meet the size test


2015 times times

2016 times

2017 times

2018 times

2019 times

14







Previouslyqualified

Meet the size test


2015

2016 times

2017 times

2018 times







15

















16



















17













18











4 New Sections






19














20













bull assets given







21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








5










6


Introduction







7


Introduction















8



bull A levy is














the levy


No

No



9





p p




Yes




Todayrsquos Agenda


10









11










12





























13















Meet the size test


2015 times times

2016 times

2017 times

2018 times

2019 times

14







Previouslyqualified

Meet the size test


2015

2016 times

2017 times

2018 times







15

















16



















17













18











4 New Sections






19














20













bull assets given







21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








6


Introduction







7


Introduction















8



bull A levy is














the levy


No

No



9





p p




Yes




Todayrsquos Agenda


10









11










12





























13















Meet the size test


2015 times times

2016 times

2017 times

2018 times

2019 times

14







Previouslyqualified

Meet the size test


2015

2016 times

2017 times

2018 times







15

















16



















17













18











4 New Sections






19














20













bull assets given







21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








7


Introduction















8



bull A levy is














the levy


No

No



9





p p




Yes




Todayrsquos Agenda


10









11










12





























13















Meet the size test


2015 times times

2016 times

2017 times

2018 times

2019 times

14







Previouslyqualified

Meet the size test


2015

2016 times

2017 times

2018 times







15

















16



















17













18











4 New Sections






19














20













bull assets given







21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








8



bull A levy is














the levy


No

No



9





p p




Yes




Todayrsquos Agenda


10









11










12





























13















Meet the size test


2015 times times

2016 times

2017 times

2018 times

2019 times

14







Previouslyqualified

Meet the size test


2015

2016 times

2017 times

2018 times







15

















16



















17













18











4 New Sections






19














20













bull assets given







21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








9





p p




Yes




Todayrsquos Agenda


10









11










12





























13















Meet the size test


2015 times times

2016 times

2017 times

2018 times

2019 times

14







Previouslyqualified

Meet the size test


2015

2016 times

2017 times

2018 times







15

















16



















17













18











4 New Sections






19














20













bull assets given







21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








10









11










12





























13















Meet the size test


2015 times times

2016 times

2017 times

2018 times

2019 times

14







Previouslyqualified

Meet the size test


2015

2016 times

2017 times

2018 times







15

















16



















17













18











4 New Sections






19














20













bull assets given







21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








11










12





























13















Meet the size test


2015 times times

2016 times

2017 times

2018 times

2019 times

14







Previouslyqualified

Meet the size test


2015

2016 times

2017 times

2018 times







15

















16



















17













18











4 New Sections






19














20













bull assets given







21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








12





























13















Meet the size test


2015 times times

2016 times

2017 times

2018 times

2019 times

14







Previouslyqualified

Meet the size test


2015

2016 times

2017 times

2018 times







15

















16



















17













18











4 New Sections






19














20













bull assets given







21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








13















Meet the size test


2015 times times

2016 times

2017 times

2018 times

2019 times

14







Previouslyqualified

Meet the size test


2015

2016 times

2017 times

2018 times







15

















16



















17













18











4 New Sections






19














20













bull assets given







21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








14







Previouslyqualified

Meet the size test


2015

2016 times

2017 times

2018 times







15

















16



















17













18











4 New Sections






19














20













bull assets given







21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








15

















16



















17













18











4 New Sections






19














20













bull assets given







21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








16



















17













18











4 New Sections






19














20













bull assets given







21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








17













18











4 New Sections






19














20













bull assets given







21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








18











4 New Sections






19














20













bull assets given







21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








19














20













bull assets given







21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








20













bull assets given







21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








21

















22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








22














as an asset and







23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








23




















24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








24









1827)











25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








25










as s 379(3)










26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








26














27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








27
















28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








28








Benchmark

Allowed Alternative












Joint Venture


29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








29







Joint Venture

Benchmark

Allowed Alternative














30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








30
















New

New

31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








31




















32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








32















ndash Fair value


33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








33


















34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








34














bull S 383

bull Sch 4 Part 11

bull Sch 4 Part 12

bull Sch 4 Part 13

bull Sch 4 Part 14

bull S 387

35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








35









Obligations


bull HKFRS 15







36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








36







Obligations


bull Effective Date










Obligations




b HKAS 18 Revenue





37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








37







Obligations


A Objective

B Scope










A Objective










38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








38


A Objective






B Scope









39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








39







Obligations



C Recognition














40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








40
















41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








41
















42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








42











Separate Contract










New Contract


Separate Contract

43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








43







Obligations














44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








44


















45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








45













Obligations


46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








46


D Measurement



Obligations




















47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








47














ndash fixed amounts





48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








48




















49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








49









Expected Value

Most Likely Amount








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








50
















51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








51















Fair Value

52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








52















Obligations


53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








53




Obligations











Obligations




54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








54










Obligations









55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








55

















56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








56






c Residual approach









Obligations


57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








57
















58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








58














Over Time

At a Point in Time

59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








59









Over Time

At a Point in Time







Over Time

60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








60






At a Point in Time









At a Point in Time

61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








61







Over Time

Measuring Progress







Over Time

Measuring Progress

62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








62








Over Time

Measuring Progress







Obligations





63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








63





bull Effective Date





64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








64



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting








1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








65






















66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








66






Yes


interest

Yes


interest




1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting


67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








67



Initial measurement







Transaction Cost

+





a amortised cost





68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








68
















69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








69












Topics Covered








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








70



















71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








71












HKFRS 9 defines





72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








72

















73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








73















74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








74



















75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








75
















76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








76

















77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








77
















78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








78







bull past events













79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








79













met


Hedged ItemHedging

Instrument




Fair Value Hedge

Cash Flow Hedge



hedge accounting

80








80








financial reporting update - nelson cpa limited | reporting update 9 march 2015 lam chi yuen nelson...

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