http://www.kpmg.com.hk/external/2010/live/images/email_headers/en/email_header_eng_announcement_audit.jpg

Financial Reporting Update Issue 74 – December 2013


New Amendment to HKFRS 9: Hedge Accounting and deferral of effective date from 2015


23 December 2013

On 19th November 2013, the IASB issued amendments to IFRS 9 to become IFRS 9 Financial Instruments (2013).  The HKICPA has now endorsed these amendments into HKFRS as HKFRS 9 Financial Instruments (2013), available for early adoption. 

 

 

http://www.kpmg.com.hk/external/2011/live/images/in_the_headline.jpg

 

First Impressions – Hedge accounting and transition

 

In the headlines 2013/19

 

 

HKFRS 9 (2013)

 

 


KPMG Thought Leadership app

 

http://www.kpmg.com.hk/external/2013/eAnnouncement/MS/Multi-lingual-app-for-KPMG-thought-leadership-publications-from-across-the-globe/TLv2-ipad-app-icon-55x55.gif
http://www.kpmg.com.hk/external/2013/eAnnouncement/MS/Multi-lingual-app-for-KPMG-thought-leadership-publications-from-across-the-globe/image008.gif

Other KPMG China apps

 

http://www.kpmg.com.hk/external/2013/eAnnouncement/MS/Multi-lingual-app-for-KPMG-thought-leadership-publications-from-across-the-globe/image009.pngQuick Tip

Tap the top-left button on the app to select and save your default setting to China’s library.

http://www.kpmg.com.hk/external/2013/eAnnouncement/MS/Multi-lingual-app-for-KPMG-thought-leadership-publications-from-across-the-globe/global-button-top-left.gif

 

 

 

 

This revised standard contains three amendments:

·         a new general hedge accounting standard,

·         a revision to the accounting for financial liabilities for which the fair value option has been elected, and

·         a revision to the effective date of the entire HKFRS 9.

 

New General Hedge Accounting Standard

 

The majority of the amendments to HKFRS 9 provides a new general hedge accounting standard which will align hedge accounting more closely with risk management.  The new standard does not fundamentally change the types of hedging relationships or the requirement to measure and recognise ineffectiveness; however, under the new standard more hedging strategies that are used for risk management will qualify for hedge accounting.  In addition the effectiveness testing, whilst requiring a higher degree of judgment, is less prescriptive in nature and more closely aligned with the defined risk management strategy of the hedge than the existing requirements of HKAS 39. 

 

Accounting for Financial Liabilities

 

Also as part of the amendments, entities can change the accounting for liabilities that they have elected to measure at fair value by allowing gains or losses caused by changes in an entity’s own credit risk to be recognized in reserves rather than profit or loss.  These changes to liability accounting can early adopted immediately in isolation to the rest of HKFRS 9. 

 

Effective date and transition:

 

The new standard removes the 1 January 2015 effective date of HKFRS 9.  The new mandatory effective date will be determined once the classification and measurement and impairment phases of IFRS 9 are finalized. 

 

Early application of the new general hedging model is permitted only if all existing HKFRS 9 requirements are applied at the same time or have already been applied.  Alternatively, when an entity adopts HKFRS 9 (2013), it may choose as its accounting policy to defer application of the new general hedging model until the standard resulting from the IASB’s project on macros hedging is effective.

 

The new standard allows an entity to apply early the amendments to accounting for financial liabilities without applying any of the other requirements in HKFRS 9.

 

Further details of the amendments can be found in our In the Headlines publication (Issue 2013/19) while our First Impressions publication provides a more comprehensive guide to the new requirements and their practical implications. Copies of these publications, issued by KPMG International, are available on our website, www.kpmg.com/cn, by following the links 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/

ArticlesPublications/Newsletters/Financial-Reporting-Update/

Pages/default.aspx.

 

 

 

 

This e-Mail was sent by KPMG, 8th Floor, Prince's Building, 10 Chater Road, Central, Hong Kong. Tel: +852 2522 6022. For enquiries, please click here.

You have received this communication because you have previously expressed an interest in KPMG’s publications or because we believe that the content of this communication is of interest to someone in your position. Any personal data we hold is necessary in order to provide you with the services for which you have subscribed. As a receiver of this communication, if you do not click one of the options below, after 30 days we will assume that you wish to continue to receive our communications. Your data may be used by us for marketing purposes.

You have the right to request access and correction of any personal data held by us. If you request access to data held by us, we may charge a fee in order to respond to your request.

We will keep any personal data confidential. Any personal data held by us will only be disclosed and used as described or as agreed with you or as required by law.

If you wish to unsubscribe from this communication, please click here. If you wish to unsubscribe from all KPMG communications, please click here. Please allow 10 business days for your opt-out request to take effect.

这个电子邮件是由毕马威会计师事务所发出。地址:香港中环遮打道10号太子大厦8楼 电话:+852 2522 6022。如有任何查询, 请按这里

此前阁下曾表示对毕马威的通讯感兴趣,或因为我们认为毕马威的刊物 对阁下的工作有所帮助,所以向阁下发出了本通讯。我们持有的个人资料是为阁下提供服务所必需。阁下收取本通讯后,如果在30天内没有选择下列的任何一个选项,我们将假设阁下希望继续收取我们的通讯。我们可能会使用阁下的资料进行市场推广活动。

阁下有权要求查阅我们所持有的个人资料及要求更正有关资料。如果阁下要求查阅我们所持有的资料,我们可能就阁下的要求收取费用。

我们会对个人资料保密,并且只会按照已订明的情况、与阁下的协议或按照法律规定披露及使用我们所持有的个人资料。

假如阁下希望取消本通讯的订阅 ,请按这里。假如阁下希望取消订阅所有毕马威的通讯,请按这里。不接收通讯的要求需时10个工作天方能生效。

 

Privacy & Disclaimer

 

© 2013 KPMG Huazhen (Special General Partnership) — a special general partnership in China, KPMG Advisory (China) Limited — a wholly foreign owned enterprise in China, and KPMG — a Hong Kong partnership, are member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 

 

© 2013 KPMG, a Macau partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

 

The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.