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  • Hong Kong Financial Reporting Standards

    www.pwchk.com

    Illustrative HKFRS Consolidated Financial Statements31 December 2016

  • IFRS Manual of Accounting (English with Chinese translation) IFRS Manual of Accounting is a comprehensive practical guide to IFRS and provides straightforward explanations on how to prepare financial statements in accordance with IFRS, with hundreds of practical examples. IFRS Manual of Accounting with Chinese translation has been released in different volumes. The following volumes have been published by China Financial & Economic Publishing House. Depending on the topic, each release may be a chapter or a combination of a number of chapters from the manual.

    MoA Volume 14: Consolidated financial statements and joint arrangements This volume covers Chapter 24 Consolidated financial statements and Chapter 28 Joint arrangements of the English version and their translation.

    MoA Volume 15: Employee benefits This volume covers Chapter 11 Employee benefits of the English version and its translation.

    MoA Volume 16: Insurance contracts and Fair value This volume covers Chapter 8 Insurance contracts and Chapter 34 Fair value of the English version and their translation.

    The below volumes (English with Chinese translation) are also available:

    IFRS Manual of Accounting - Volume 1: Revenue and construction contracts

    IFRS Manual of Accounting - Volume 2: Accounting principles and applicability of IFRS; Presentation of financial statements; Accounting policies, accounting estimates and errors

    IFRS Manual of Accounting - Volume 3: Taxation

    IFRS Manual of Accounting - Volume 4: Share-based payment

    IFRS Manual of Accounting - Volume 5: Business combinations

    IFRS Manual of Accounting - Volume 6: Intangible assets and inventories

    IFRS Manual of Accounting - Volume 7: Property, plant and equipment, investment property and lease accounting

    IFRS Manual of Accounting - Volume 8: Impairment of assets

    IFRS Manual of Accounting - Volume 9: Consolidated and separate financial statements and equity accounting

    IFRS Manual of Accounting - Volume 10: Disposals of subsidiaries, business and non-current assets

    IFRS Manual of Accounting - Volume 11: Foreign currencies IFRS Manual of Accounting - Volume 12: Earnings per share

    IFRS Manual of Accounting - Volume 13: Service concession arrangements

    IFRS Manual of Accounting - Financial Instruments (English with Chinese translation) Volume 1

    IFRS Manual of Accounting - Financial Instruments (English with Chinese translation) Volume 2

    IFRS Manual of Accounting - Financial Instruments (English with Chinese translation) Volume 3

    Please visit www.pwccn.com/home/eng/ifrs_accounting_manual.html for details.

    PwCs Accounting Technical Publications

    http://www.pwccn.com/home/eng/ifrs_accounting_manual.html

  • Illustrative HKFRS Consolidated Financial Statements

    Specimen Holdings Limited

    i

    Specimen Holdings Limited Illustrative HKFRS Consolidated Financial Statements

    31 December 2016

  • Illustrative HKFRS Consolidated Financial Statements

    Specimen Holdings Limited

    ii

    Introduction

    This publication provides an illustrative set of consolidated financial statements, prepared in accordance with Hong Kong Financial Reporting Standards (HKFRS), for a fictional manufacturing, wholesale and retail group (Specimen Holdings Limited).

    Specimen Holdings Limited is an existing preparer of HKFRS consolidated financial statements; HKFRS 1, First-time adoption of Hong Kong Financial Reporting Standards, is not applicable. This publication is based on the requirements of HKFRS standards and interpretations for financial years beginning on or after 1 January 2016. This publication includes the disclosures required by the Hong Kong Companies Ordinance (Cap. 622) and the Rules Governing the Listing Securities on The Stock Exchange of Hong Kong Limited and the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the Listing Rules) published up to and including September 2016. Their related disclosures are marked in red and orange respectively. This publication has not included all the disclosures required by the Listing Rules. For example, the disclosure of corporate governance has not been included as it is expected to vary significantly from one company to another company and should be tailored to suit the particular circumstances of the company. Please refer to Appendix 14 of Main Board Listing rules / Appendix 15 of GEM Listing rules for detailed disclosure requirements of corporate governance report. PricewaterhouseCoopers commentary has been provided, in boxes, to explain the detail behind the presentation of a number of challenging areas. These commentary boxes relate to the presentation in: the consolidated balance sheet, the consolidated statement of profit or loss, the consolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated statement of cash flows, the summary of significant accounting policies, and financial risk management. Areas in which presentation has changed significantly since 2015 have been highlighted in grey. We have attempted to create a realistic set of financial statements for a corporate entity. Certain types of transaction have been excluded, as they are not relevant to the groups operations. The example disclosures for some of these additional items have been included in Appendices V to VI. The new and amended standards and interpretations, which are effective for financial year ending 31 December 2016 are summarised in the below section. The forthcoming HKFRS requirements are outlined in a table in Appendix X. We have included in Appendices VII, VIII and IX the links to the websites where illustrative disclosures required for the early adoption of Amendments to IAS 7 Statement of Cash Flows, IFRS 9 Financial Instrument and IFRS 15 Revenue from contracts with customers can be downloaded, respectively. The sample disclosures should not be considered the only acceptable form of presentation. The form and content of each reporting entitys financial statements are the responsibility of the entitys management. Alternative presentations to those proposed in this publication may be equally acceptable if they comply with the specific disclosure requirements prescribed in HKFRS. These illustrative financial statements are not a substitute for reading the standards and interpretations, the Hong Kong Companies Ordinance and the Listing Rules themselves, or for professional judgement as to the fairness of presentation. They do not cover all possible disclosures that HKFRS, the Hong Kong Companies Ordinance and the Listing Rules require. Further specific information may be required in order to ensure fair presentation under HKFRS depending on the circumstances. Additional disclosures may be required in order to comply with local laws and/or stock exchange regulations if the subject company is incorporated overseas and/or listed in an overseas stock exchange. Please refer to Disclosure Checklist 2016 for HKFRS, the Hong Kong Companies Ordinance and the Listing Rules for detailed disclosure requirements. Readers should refer to PricewaterhouseCoopers industry illustrative financial statements for industry specific transactions and presentations, including: Illustrative financial statements : Investment funds

    Illustrative financial statements : Investment property

    Illustrative financial statements : Private equity

    Illustrative financial statements : Insurance

    Illustrative financial statements for authorised institutions in Hong Kong

  • Illustrative HKFRS Consolidated Financial Statements

    Specimen Holdings Limited

    iii

    Introduction (Continued)

    New and amended standards that have been issued and are effective for periods commencing on 1 January 2016

    Standards Key requirements Early adoption and

    transition provision, if any

    (I) Changes effective for annual periods beginning on or after 1 January 2016

    HKFRS 14

    Regulatory

    Deferral

    Accounts

    HKFRS 14 Regulatory Deferral Accounts, describes regulatory deferral

    account balances as amounts of expense or income that would not be

    recognised as assets or liabilities in accordance with other standards, but

    that qualify to be deferred in accordance with HKFRS14 because the

    amount is included, or is expected to be included, by the rate regulator in

    establishing the price(s) that an entity can charge to customers for rate-

    regulated goods or services.

    HKFRS 14 permits eligible first- time adopters of HKFRS to continue their

    previous GAAP rate-regulated accounting policies, with limited changes.

    HKFRS 14 requires separate presentation of regulatory deferral account

    balances in the balance sheet and of movements in those balances in the

    statement of comprehensive income. Disclosures are required to identify

    the nature of, and risk associated with, the form of rate regulation that has

    given rise to the recognition of regulatory deferral account balances.

    HKFRS 14 is effective for an

    entitys first annual HKFRS

    financial statements for a period

    beginning on or after 1 January

    2016, with earlier application

    permitted.

    Amendment to

    HKFRS 11

    Accounting for

    acquisitions of

    interests in

    joint

    operations

    The amendment requires an investor to apply the principles of business

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