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  • Hong Kong Financial Reporting Standards

    www.pwchk.com

    Illustrative condensed consolidated interim

    For the six months ended 30 June 2017

  • Manual of accounting IFRS 2017

    Global guide to IFRS providing comprehensive practical guidance on how to prepare financial statements in accordance with IFRS. Includes hundreds of worked examples and guidance on financial instruments. The Manual is a two-volume set comprising:

    Manual of accounting IFRS 2017 Vol. 1 and Vol. 2

    Language: English

    In depth New IFRSs for 2017

    This publication outlines the new IFRS standards and amendments plus those standards and amendments that are effective from 1 January 2017.

    Language: English and Simplified Chinese

    Illustrative HKFRS consolidated financial statements for the year ended 31 Dec 2016

    The 2016 version of the Illustrative HKFRS consolidated financial statements is for a fictitious listed manufacturing, wholesale and retail group. The illustrative example is prepared in accordance with the requirements as set out in:

    The Hong Kong Companies Ordinance (Cap.622);

    The Listing Rules issued by the Stock Exchange of Hong Kong Limited; and

    HKFRSs issued by the Hong Kong Institute of Certified Public Accountants.

    Language: English

    Practical guides to IFRS

    Practical guides to IFRS provide updates on the guidance in recently released discussion papers, exposure drafts and final standards from the IASB.

    Language: English and Simplified Chinese

    IFRS/HKFRS News

    Monthly newsletter highlighting the latest update in the International/Hong Kong Financial Reporting Standards.

    Language: English

    IFRS/HKFRS News (Chinese)

    Monthly newsletter highlighting the latest update in the International/Hong Kong Financial Reporting Standards.

    Language: Simplified Chinese

    Please visit http://www.pwccn.com/en/services/audit-and-assurance/publications.html for more publications.

    PwCs Accounting Technical Publications

  • 1

    Introduction to HKAS 34, 'Interim financial reporting'

    Objective and scope

    Although there is no requirement under HKFRS for entities to publish interim financial reports, a number of territories around the world either require or recommend their publication, often stipulating that they should be prepared in accordance with HKFRS. HKAS 34, 'Interim financial reporting', applies where an entity publishes an interim financial report in accordance with HKFRS. It encourages publicly traded entities to prepare interim reports at least as of the end of the first half of their financial year [HKAS 34 para 1(a)].

    The objective of HKAS 34 is to set out the minimum content that an interim financial report should contain and the principles that should be used in recognising and measuring the transactions and balances included in that report.

    HKAS 34 recommends that interim financial reports are published within 60 days of the period end, although local legislative requirements may mandate a different timescale1 [HKAS 34 para 1(b)].

    Content

    Entities may either prepare full HKFRS financial statements (as published in their annual report), or condensed financial statements under HKAS 34. Condensed reporting is the more common approach.

    HKAS 34 requires the interim financial report to contain, as a minimum:

    A statement of financial position (balance sheet) as at the end of the current interim period and as at the end of theimmediately preceding financial year.

    A statement or statements of profit or loss and other comprehensive income for the current interim period and cumulativelyfor the current financial year to date (for example, the second quarter and the half year to date), with comparativestatements for the comparable interim periods of the immediately preceding financial year.

    A statement of changes in equity for the year to date, with a comparative statement for the comparable year-to-date periodof the immediately preceding financial year.

    A statement of cash flows for the year to date, with a comparative statement for the comparable year-to-date period of theimmediately preceding financial year.

    Selected explanatory notes.

    Basic and diluted earnings per share for the interim period reported, presented in the statement that presents thecomponents of profit or loss for an interim period (only if the entity is required to present earnings per share in accordancewith HKAS 33).

    [ HKAS 34 paras 8, 11]

    The condensed primary statements should contain, as a minimum, the main headings and sub-totals that were included in the entity's most recent full financial statements. Additional line items or notes should be included if their omission would make the condensed interim financial report misleading [HKAS 34 para 10].

    PwC observation:

    HKAS 34 does not require the presentation in the condensed primary statements of all the line items that are required by HKAS 1, Presentation of financial statements, to be included in the primary statements in the annual financial statements; however, it is common, and considered best practice, to include them. In some countries, the extent to which line items may be aggregated in condensed interim financial statements may also be governed by local regulators or market requirements.

    HKAS 34 requires additional line items or notes to be included if their omission would make the condensed interim financial report misleading [HKAS 34 para 10]. An entity may incur costs on an annual basis that are not significant enough in the context of the annual financial statements to require separate disclosure. However, such costs might be incurred unevenly during the year and require separate presentation in the condensed statement of profit or loss, thus leading to a difference in presentation between the interim financial report and the annual comparative financial statements.

    HKAS 34 requires comparative information to be given for all primary statements. A comparative statement of financial position should be given for the last full financial year. HKAS 34 does not require statement of financial position comparatives for the prior interim period. Statement of profit or loss and other comprehensive income comparatives should be given for the comparative

    1 According to MB Listing Rule 13.49(6) and 13.48(1), a MB issuer must publish its interim results announcement not later than two months after the end of that period

    of six months and must send out either (i) its interim report, or (ii) its summary interim report not later than three months after the end of that period of six months.

    According to GEM Listing Rule 18.53 and 18.78, a GEM issuer must publish its interim results announcement and send out either (i) its interim report, or (ii) its summary interim report not later than 45 days after the end of such period.

  • 2

    interim period, but comparatives for the last full financial year are not required. HKAS 34 requires in addition a cumulative current year-to-date statement of profit or loss and other comprehensive income with comparatives. This will be relevant to those choosing to report under HKAS 34 at quarterly dates. For example, at the third quarter, results would be given for the three months to the end of the third quarter, and also for the nine months to the end of the third quarter. Equity movement and cash flow comparative information is required for the equivalent year-to-date period in the previous year [ HKAS 34 para 20].

    Statements required for entities that report half-yearly at the end of the second quarter

    Statement Current Comparative

    Statement of financial position at 30 June 20X7 31 December 20X6

    Statement of profit or loss and other comprehensive income (and, where applicable, separate statement of profit or loss): six months ended

    30 June 20X7 30 June 20X6

    Statement of changes in equity: six months ended

    30 June 20X7 30 June 20X6

    Statement of cash flows: six months ended

    30 June 20X7 30 June 20X6

    Statements required for entities that report quarterly at the end of the third quarter

    Statement Current Comparative

    Statement of financial position at 30 September 20X7 31 December 20X6

    Statement of profit or loss and other comprehensive income (and, where applicable, separate statement of profit or loss) - nine months ended

    - three months ended

    30 September 20X7

    30 September 20X7

    30 September 20X6

    30 September 20X6

    Statement of changes in equity - nine months ended 30 September 20X7 30 September 20X6

    Statement of cash flows - nine months ended 30 September 20X7 30 September 20X6

    If an interim financial report is presented for a different interim reporting period, the heading of the financial information should specify the interim reporting period covered (for example, 'For the quarter ended 30 September 2017' or 'For the third quarter ended 31 March 2018'); the heading for the figures should indicate whether they are presented for a quarter, a half-year or the financial year to date, as appropriate.

    HKAS 34 has a year-to-date approach to interim reporting and does not replicate the requirements of HKAS 1 in terms of comparative information. As a consequence, it is not necessary to provide an additional balance sheet (statement of financial position) as at the beginning of the earliest comparative period presented where an entity has made a retrospective change in accounting policies and/or a retrospective reclassification.

    The entity's annual financial statements give a comprehensive picture of the entity's state of affairs at the most recent year end and, therefo

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