Today the HKICPA issued amendments to HKFRS 10, Consolidated financial statements, HKFRS 11, Joint arrangements and HKFRS 12, Disclosure of interests in other entities – Transition guidance, to maintain convergence of HKFRS with IFRS. The amendments are identical to those made to IFRSs 10, 11 and 12, issued by the IASB in June 2012, with the same effective date.
Clarified transition guidance in HKFRS 10
The amendments clarify that the “date of initial application” of HKFRS 10 refers to “the beginning of the annual reporting period for which the standard is applied for the first time”. For example, if an entity with a calendar year end does not early adopt HKFRS 10, then the “date of initial application” is 1 January 2013. The amendments also clarify which version of HKFRS 3, Business combinations, should be referred to if it is necessary to start consolidating an entity which was not previously consolidated.
Additional transition relief in HKFRSs 10, 11 and 12
The amendments provide additional transition relief by limiting the requirement to provide adjusted comparative information to the period immediately preceding the date of initial application of HKFRSs 10, 11 and 12. Entities that provide comparatives for more than one period have the option of leaving additional comparative periods unchanged. HKFRS 12 is further amended to remove the requirement to provide any disclosures in respect of unconsolidated structured entities for comparative periods when HKFRS 12 is adopted for the first time.
The amendments are effective for annual periods beginning on or after 1 January 2013 (i.e. same effective date as HKFRSs 10, 11 and 12), with earlier application permitted.
An overview of the amendments can be found in our In the Headlines publication (Issue 2012/11). Copies of the publication, issued by KPMG International, are available on our website, www.kpmg.com/cn, by following the link in the information column to the right. If you would like further assistance on the matters discussed, please talk with your usual KPMG contact.
KPMG China's Financial Reporting Updates are produced regularly to highlight developments in Hong Kong Financial Reporting Standards. If at any time you would like further information on the matters discussed in the Updates, please talk to your usual KPMG contact. An archive of recent issues of Financial Reporting Update can be found at http://www.kpmg.com/cn/en/IssuesAndInsights/