updates and application of new and revised hkfrss for … · 24/10/2017 1 © 2013‐2017 nelson...

24102017

1

copy 2013‐2017 Nelson Consulting Limited 1

Updates and Application of New and Revised HKFRSs for 2017 24 October 2017

LAM Chi Yuen Nelson 林智遠CFA Charter Holder FCPA(Practising)MBA MSc BBA CPA(US) FCA FCCA FCPA(Aust) FSCAwwwFacebookcomNelsonCFA

copy 2013‐2017 Nelson Consulting Limited 2Photo taken by Stephanie and Nelson copy 2016Wall Painting in Tomb of Nebamun (Egypt) The British Museum UK

24102017

2


Effective for 2017 Dec Year‐End

bull Amendments to HKAS 7 Disclosure Initiative (Statement of Cash Flows)

bull Amendments to HKAS 12 Recognition of Deferred Tax Assets for Unrealised Losses

bull Annual Improvements to HKFRSs 2014-2016 Cycle (Amendments to HKFRS 12)

bull Amendments to HKFRS for Private Entities

1 Jan 2017

1 Jan 2017

1 Jan 2017

1 Jan 2017

Selected new interpretations and amendments to HKFRSs

Effective for periods beginning onafter

Updated to HKICPA Update No 206 of September 2017



bull HKFRS 9 (2014) Financial Instrumentsbull HKFRS 15 Revenue from Contracts with Customersbull Amendments to HKFRS 15 Effective Date of HKFRS 15

Revenue from Contracts with Customersbull Amendments to HKFRS 15 Clarifications to HKFRS 15

Revenue from Contracts with Customersbull Amendments to HKFRS 2 Classification and Measurement of

Share-based Payment Transactionsbull Amendments to HKFRS 4 Applying HKFRS 9 and HKFRS 4bull Amendments to HKAS 40 Transfers of Investment Propertybull Annual Improvements to HKFRSs 2014-2016 Cycle

(Amendments to HKFRS 1 and HKAS 28) bull Hong Kong (IFRIC) Interpretation 22 Foreign Currency

Transactions and Advance Consideration

1 Jan 2018 1 Jan 2017 1 Jan 2018

1 Jan 2018

1 Jan 2018

1 Jan 2018 1 Jan 2018 1 Jan 2018

1 Jan 2018




24102017

3


Effective after 2018 Dec Year‐End

bull HKFRS 16 Leasesbull Hong Kong (IFRIC) Interpretation 23 Uncertainty over Income

Tax Treatmentsbull Amendments to HKFRS 10 and HKAS 28 Sale or Contribution

of Assets between an Investor and its Associate or Joint Venture

1 Jan 2019 1 Jan 2019

1 Jan 2016 (a date to be determined by the IASB)





New or Revised HKFRS Effective for 2017

Todayrsquos Agenda


Full presentation can be found in

wwwFacebookcomNelsonCFA

New or Revised HKFRS Effective for and after 2019

Recap and Update

Comprehensive Examples

Flowchart

24102017

4



Todayrsquos Agenda



copy 2013‐2017 Nelson Consulting Limited 8Photo taken by Stephanie and Nelson copy 2008Abu Simbel Egypt

24102017

5


Disclosure Initiative (Amendments to HKAS 7 Statement of Cash Flows)


Amendments to HKAS 7

bull In 2016 the IASB amended IAS 7 and the HKICPA then followed to amend HKAS 7 as part of the IASBrsquos Disclosure Initiative project

bull HKAS 7 then requires entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities including both

ndash changes arising from cash flows and

ndash non‐cash changes (HKAS 744A)

24102017

6



bull To the extent necessary to satisfy the new requirement an entity is required to disclose the following changes in liabilities arising from financing activities

1 changes from financing cash flows

2 changes arising from obtaining or losing control of subsidiaries or other businesses

3 the effect of changes in foreign exchange rates

4 changes in fair values and

5 other changes

bull To fulfil the disclosure requirement an entity can provide a reconciliation between the opening and closing balances in the statement of financial position for liabilities arising from financing activities including the changes as identified above



2015 Cash flows Non‐cash changes 2016

Acquisition New leases$ $ $ $ $

Long‐term borrowings 1040 250 200 ndash 1490

Lease liabilities ndash (90) ndash 900 810

Long‐term debt 1040 160 200 900 2300

Example

bull Reconciliation of liabilities arising from financing activities

24102017

7


Deferred Tax Assets for Unrealised Losses(Amendments to HKAS 12 Income Taxes)



bull In 2016 the IASB issued amendments to IAS 12 and then HKICPA followed the same

ndash to clarify the requirements on recognition of deferred assets for unrealised losses including the deferred tax assets related to debt instruments measured at fair value

24102017

8



bull When an entity assesses whether taxable profits will be available against which it can utilise a deductible temporary difference it considers whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference

ndash If tax law imposes no such restrictions

bull an entity assesses a deductible temporary difference in combination with all of its other deductible temporary differences

ndash However if tax law restricts the utilisation of losses to deduction against income of a specific type

bull a deductible temporary difference is assessed in combination only with other deductible temporary differences of the appropriate type(HKAS 1227A)



bull In estimating probable future taxable profit the estimate may include the recovery of some of an entityrsquos assets for more than their carrying amount if there is sufficient evidence that it is probable that the entity will achieve this (HKAS 1229A)

24102017

9



Happy Limited measures a fixed‐rate debt instrument at fair value (which is lower than the maturity value)

HKAS 12 requires Happy to consider whether there is sufficient evidence to conclude that it is probable that Happy will recover the instrument for more than its carrying amount

When Happy expects to hold a fixed‐rate debt instrument until maturity and collect all the contractual cash flows

this may be the case that it is probable that Happy will recover the instrument for more than its carrying amount

Example

copy 2013‐2017 Nelson Consulting Limited 18Photo taken by Stephanie and Nelson copy 2016Stonehenge UK

24102017

10


Todayrsquos Agenda





HKFRS 9 Financial Instruments

24102017

11



1 Objective

2 Scope

3 Recognition and Derecognition

4 Classification

5 Measurement

6 Hedge Accounting

7 Effective Date and Transition


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

24102017

12


No




Contractual cash flowsare solely principal and

interest

Determine the category of a financial asset for subsequent

measurement

No

Choose fair value option (designate at fair value through profit or loss)

No

Yes

Yes

Held within a business model to collect contractual

cash flow

Yes

No Held within a business model to collect contractual cash flow and selling FA


interest

Yes

Yes

No

No

Entitle and elect to present fair value changes in other comprehensive income

Yes

Source Advanced Financial Reporting (2016) by Nelson Lam KP Yuen and Jasmine Kwong



bull Even the common understanding views that there are three categories in HKFRS 9 for the classification and subsequent measurement of a financial asset a financial asset can be classified into the following five categories or sub‐categories

1 Financial asset at amortised cost

2 Financial asset (not being investment in equity instrument) at fair value through other comprehensive income

3 Financial asset being investment in an equity instrument irrevocable elected to measure at fair value through other comprehensive income

4 Financial asset at fair value through profit or loss and

5 Option to designate a financial asset at fair value through profit or loss



1 2 3 4 5

24102017

13



bull A financial asset shall be measured at amortised cost if both of the following conditions are met

ndash the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and

ndash the contractual terms of the financial asset give rise on a specified date to cash flows that are solely payments of principal and interest on the principal amount outstanding (para 412)

bull Para B411ndashB4126 provide guidance on how to apply these conditions


measurement


No


cash flow

Yes


interest

Amortised Cost

Yes



Fair Value Through Other Comprehensive income


measurement


No


cash flow



interest

YesYes


interest

Yes

24102017

14



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 selling FA




bull A financial asset shall be measured at fair value through profit or loss unless it is measured ndash at amortised cost in accordance with para 412 or

ndash at fair value through other comprehensive income in accordance with parag 412A

bull However an entity may make ndash an irrevocable election at initial recognition for particular investments in

equity instruments that would otherwise be measured at fair value through profit or loss to present subsequent changes in fair value in other comprehensive income(see para 575ndash576) (para 414)



No


Yes

24102017

15


Chapter 57 Gains and Losses

bull At initial recognition an entity may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument within the scope of HKFRS 9 that is neither held for tradingnor contingent consideration recognised by an acquirer in a business combination to which HKFRS 3 applies (para 575)

bull If an entity makes the above election in para 575 it shall recognise in profit or loss dividends from that investment in accordance with para 571A (para 577)

For those classified as measured at fair value

Fair value option

Equity instrument

Held for trading andor contingent consideration

No

Yes

No

Part of hedging relationship

No



Yes

Amortised CostFair Value Through

Profit or Loss

Source Intermediate Financial Reporting 3rd (2017) by Nelson Lam amp Peter Lau



bull This election (para 575) is made on an instrument‐by‐instrument (ie share‐by‐share) basis

bull Amounts presented in other comprehensive income shall not be subsequently transferred to profit or loss

bull However the entity may transfer the cumulative gain or loss within equity (para B571)

bull The gain or loss that is presented in other comprehensive income in accordance with para 575 includes any related foreign exchange component (para B573)


Fair value option

Equity instrument


No

Yes

No


No



Yes


24102017

16


Chapter 41 Classification of FADetermine the category of a financial asset for subsequent

measurement


Yes

bull Despite para 411ndash414 an entity may at initial recognition irrevocably designate a financial asset as measured at fair value through profit or lossndash if doing so eliminates or significantly reduces a

measurement or recognition inconsistency(sometimes referred to as an ldquoaccounting mismatchrdquo) that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases(see para B4129ndashB4132) (para 415)




bull The category of financial assets at fair value through profit or loss is composed of at least three groups of financial assets and they are

1 Financial assets designated at fair value through profit or loss by an entity

2 Financial assets measured at fair value but unable to be measured through other comprehensive income and

3 Financial assets held for trading including derivatives


Source Intermediate Financial Reporting 3rd (2017) by Nelson Lam and Peter Lau

24102017

17


Derivative amp Embedded Derivative

Accounting for derivatives

Yes Accounting for as financial guarantee contract

No

Is the derivative a financial guarantee contract

Is the derivative a designated and effective

hedging instrument

Contract meets the definition of derivative

Apply hedge accountingYes

No

Derivative other than financial guarantee contract

and designated and effective hedging instrument



Chapter 43 Embeded Derivatives

Economic characteristics and risks of the embedded derivative closely related

Embedded derivative meets the definition of derivative

Hybrid contract measured at fair value through profit or loss

Separate the embedded derivative from the host

No

Yes

No

Yes

No

Yes

Other hybrid contract

Hybrid contract withfinancial asset host


YesNo

Non‐financial asset host

Embeddedderivative

Not to separate the embedded derivative from the host

Accounted for as other derivatives Apply applicable HKFRS


Accounted for as other financial

assets

24102017

18



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting



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

+

To align HKFRS 15

24102017

19



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)





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 (ie under the ldquohold to collectrdquo business model) and

ndash to financial assets that are measured at fair value through other comprehensive income in accordance with para 412A (ie under the ldquohold to collect and sellrdquo business model) (para 522)




No

Entitle and elect to present fair value changes in other comprehensive incomeYes

Impairment requirements applied to these two categories only (implied that equity instruments are not subject to

impairment requirements)

1 2

24102017

20


Chapter 55 Impairment

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



bull To understand and apply these requirements an entity has to ascertain

ndash the scope of the impairment in HKFRS 9

ndash the concept of expected credit losses

ndash the approach in recognition of expected credit losses

ndash the financial instruments with the scope in recognition of expected credit losses but not falling within the three‐stage model

ndash the assessment of the credit risk on a financial instrument since initial recognition

ndash the determination of financial instruments being credit‐impaired and

ndash the three‐stage model in such recognition

24102017

21



bull Always recognise a loss allowance for changes in lifetime expected credit losses and

bull Calculate a credit‐adjusted effective interest rate

Calculate interest revenue on gross carrying amount

Has there been a significant increase in credit risk since

initial recognition

No

Is simplified approach for trade receivables contract assets and lease

receivables applicableNo

Yes

No

Is the low credit risk simplification

applied

Yes

Yes

Is the financial instrument a credit‐impaired financial asset (Section 16516)

Yes

Yes

No

No


YesNo

Calculate interest revenue on amortised cost

Recognise lifetime expected credit lossesRecognise 12‐month expected

credit losses

Stage 1 Stage 2 Stage 3

Does the financial instrument have low credit risk at the reporting date

Is the financial instrument a purchased or originated credit‐impaired financial asset

Adapted from the flowchart after HKFRS 9IE102



Scope in Recognition of Expected Credit Losses

bull In HKFRS 9 not only financial assets but also some financial instruments may fall within the scope in recognition of expected credit losses

bull HKFRS 9 specifically requires to an entity to recognise a loss allowance for expected credit losses on the following financial assets



3 Lease receivable

4 Contract asset or

5 Loan commitment and financial guarantee contract to which the impairment requirements apply in accordance with HKFRS 9

24102017

22



The Concept of Expected Credit Losses

bull The main change of the impairment requirements in HKFRS 9 is the introduction of the expect credit loss to replace the incurred loss model

bull The IASB considered that for those financial assets being the debt instruments the effect of changes in credit risk are more relevant to an investorrsquos understanding of the likelihood of the collection of future contractual cash flows than the effects of other changes for example changes in market interest rates

bull The expected credit losses can be further divided into two types

ndash 12‐month expected credit losses (recognised in Stage 1 of the impairment stages) and

ndash lifetime expected credit losses (recognised in Stage 2 and 3 of the impairment stages and for specific financial instruments)



Approach in Recognition of Expected Credit Losses

bull To achieve the objective and comply the impairment requirements in HKFRS 9 an entity is required to have the following 3 kinds of assessment

1 ldquoAsset type assessmentrdquo ndash to assess the type of the financial asset and determine whether it is

a) purchased or originated credit‐impaired financial assets

b) trade receivables contract assets and lease receivables for which the entity applies simplified approach or

c) other financial assets

2 ldquoCredit risk assessmentrdquo ndash To assess the credit risk on the financial asset and

3 ldquoCredit‐impaired assessmentrdquo To determine whether the financial asset is credit impaired

24102017

23



Asset type assessment

Credit risk assessment

Credit‐impaired assessment


initial recognition


receivables applicable


applied







bull The financial instruments with the scope in recognition of expected credit losses but not falling within the three‐stage model

bull Before having credit risk assessment an entity is required to directly recognise lifetime expected credit losses for two types of financial instruments

1 Purchased or originated credit‐impaired financial assets and

2 Trade receivables contract assets and lease receivables for which the entity applies simplified approach or



Asset type assessmentNo


24102017

24







Yes



Yes

No


YesNo


Recognise lifetime expected credit losses

Stage 2 Stage 3






Example

bull Bonnie Corporation is a manufacturer and has a portfolio of trade receivables of $30 million in 2015 and operates only in Singapore Bonnies determines that

ndash The customer base consists of a large number of small clients

ndash The trade receivables are categorised by common risk characteristics that are representative of the customersrsquo abilities to pay all amounts due in accordance with the contractual terms

ndash The trade receivables do not have a significant financing component in accordance with HKFRS 15

24102017

25





Example

bull In accordance with HKFRS 9 the loss allowance for such trade receivables is always measured at an amount equal to lifetime time expected credit losses

bull To determine the expected credit losses for the portfolio Bonnie uses a provision matrix

bull The provision matrix is based on its historical observed default rates over the expected life of the trade receivables and is adjusted for forward‐looking estimates

bull At every reporting date the historical observed default rates are updated and changes in the forward‐looking estimates are analysed In this case it is forecast that economic conditions will deteriorate over the next year





Example

bull On that basis Bonnie estimates the following provision matrix

1ndash30 days 31ndash60 days 61ndash90 days Over 90 days

Current past due past due past due past due

Default rate 1 3 5 10 15

bull Trade receivables from the large number of small customers amount to $30 million and are measured using the provision matrix as follows

Gross carrying Default Lifetime expectedamount rate credit loss allowance

Current $15000000 1 $1500001ndash30 days past due 7500000 3 22500031ndash60 days past due 4000000 5 20000061ndash90 days past due 2500000 10 250000Over 90 days past due 1000000 15 150000

$30000000 $975000

24102017

26




ndash At each reporting date for all financial instruments other than purchased or originated credit‐impaired financial assets or financial assets that simplification approach is applied

bull an entity is required to assess whether the credit risk on a financial instrument has increased significantly since initial recognition


initial recognition


applied






bull Risk of Default and Past Due Information

ndash HKFRS 9 incorporates two rebuttable presumptions in assessing significant increases in credit risk and risk of default

i 30 Days past due rebuttable resumption in respect of significant increases in credit risk

ndash Regardless of the way in which an entity assesses significant increases in credit risk there is a rebuttable presumption that the credit risk on a financial asset has increased significantly since initial recognition when contractual payments are more than 30 days past due (HKFRS 95511)

ii 90 Days past due rebuttable resumption in respect of default occurred

ndash In defining default there is a rebuttable presumption that default does not occur later than when a financial asset is 90 days past due unless an entity has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate

24102017

27



Credit‐impaired assessment ndash the determination of financial instruments being credit‐impaired

bull In HKFRS 9 after assessing credit risk and ascertaining past due information an entity has to determine whether the financial instrument is credit impaired





Three‐Stage Model

bull By applying such impairment approach in HKFRS 9 to a financial instrument and based on the result of credit risk assessment an entity may as explained by the IASB divide the impairment requirements into three impairment stages

Stage 1 ndash Performing financial instrument stage

Stage 2 ndash Underperforming financial instrument stage and

Stage 3 ndash Non‐performing financial instrument stage

24102017

28


Stage 1 ndash Performing Stage 2 ndash Underperforming Stage 3 ndash Non‐Performing

Increase in credit risk since initial recognition

Impairment recognition

Interest revenue

12‐month expected credit losses

Effective interest on gross carrying amount

Lifetime expected credit losses

Effective interest on amortised cost

Adapted from Project Summary of IFSR 9 (July 2014)




Other financial assets only

Credit‐impaired

Significant increase in credit risk

Other financial assets and those simplification approach applied

Not credit‐impaired

No significant increasein (or low) credit risk


Adapted from the IASBrsquos Project Summary issued in July 2014







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29


How will it be affected by HKFRS 9


HKFRS 9


(HKFRS 9)


Chapter 7 Effective Date and Transition

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

ndash Earlier application is permitted (HKFRS 971)

ndash With some restrictions an entity may elect to early apply some requirements only (HKFRS 9712)

bull An entity shall apply HKFRS 9 retrospectively in accordance with HKAS 8 except as specified in para 724ndash7226 and 7228

ndash HKFRS 9 shall not be applied to items that have already been derecognised at the date of initial application (HKFRS 9721)

24102017

30



bull For the purposes of the transition provisions in para 721 723ndash7228 and 732 the date of initial application is the date when an entity first applies those requirements of HKFRS 9 and must be the beginning of a reporting period after the issue of HKFRS 9

ndash Depending on the entityrsquos chosen approach to applying HKFRS 9 the transition can involve one or more than one date of initial application for different requirements (HKFRS 9722)

bull HKFRS 9 provides further transition arrangements for

ndash Classification and measurement

ndash Impairment

ndash Hedge accounting

copy 2013‐2017 Nelson Consulting Limited 60Photo taken by Stephanie and Nelson copy 2016Detian Falls （德天瀑布） China Photo taken by Stephanie and Nelson copy 2016Zuojiang Huashan Rock Art Cultural Landscape （花山岩畫） China

24102017

31


HKFRS 15 Revenue from Contracts with Customers


HKFRS 15 Issued in 2014

bull HKFRS 15 establishes a comprehensive framework for determining

bull when to recognise revenue and

bull how much revenue to recognise

bull The core principle 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

Step 5 Recognise

revenue when or as performance obligation is satisfied

Step 4 Allocate the transaction

price

Step 3 Determine

the transaction

price

Step 2 Identify the performance obligations

Step 1 Identify the

contract with a customer

24102017

32



bull Effective Date

ndash An entity shall apply HKFRS 15 for annual reporting periods beginning on or after 1 January 2017 2018 (HKICPA Update No 174)

ndash Earlier application is permitted

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

Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the




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

Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33


Contents in HKFRS 15 Issued in 2014

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

F Presentation

G Disclosure

Todayrsquos update

copy 2013‐2017 Nelson Consulting Limited 66Source Intermediate Financial Reporting 3rd (2017) by Nelson Lam and Peter Lau

Scope

Yes

No

For a contract within HKFRS 15 there are one or more components within

other HKFRSs

Other HKFRSs specify how to separate andor initially measure one or more

part if the contract

Apply the requirements in HKFRS 15

bull Exclude from transaction price the amount measured by other HKFRSs as above

bull Apply HKFRS 15 on the remaining part

No

Yes

Is the contract within HKFRS 15

Yes

Apply other HKFRSsNo

First apply other HKFRSs (the separation andor measurement requirements of

other HKFRSs)

24102017

34


Step 1 Identify the Contract(s)

Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


bull Step 1 Identifying 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

24102017

35




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)



No

Yes

Is it a contract with a customer

Does the contract meet the contract criteria (ie HKFRS 159)

No

Not within HKFRS 15

Yes

Either of the following events has occurredbull The entity has no remaining obligation and all or substantial all consideration

received is non‐refundable orbull The contract has been terminated and consideration received is non‐refundable

Consideration receivedrecognised as revenue

Yes

Consideration received

Within HKFRS 15 ndash continue the 5‐step model of HKFRS 15

No

Consideration receivedrecognised as liability

Yes

Continue to assess whether the contract criteria are met subsequently


24102017

36


Comprehensive Example ndash Step 1Example

bull Leon Group signs a new contract with a customer Andy Inc which has business with Leon for a while and has good credit history

bull The terms of the new contract include

ndash a promises to grant a franchise licence that provides Andy with the right to use Leonrsquos trade name and sell Leonrsquos products for 10 years

ndash a promises to provide the equipment necessary to operate a franchise store

ndash a fixed consideration of $150000 for the equipment that is payable to Leon when the equipment is delivered

ndash a sales‐based royalty of 5 of Andyrsquos monthly sales payable to Leon

bull Leonrsquos stand‐alone selling price of the equipment is $150000 and Leon regularly licenses franchises in exchange for 5 of Andy sales

bull In recognising the revenue with Andy Leon applies the 5‐step model in HKFRS 15 step by step


Comprehensive Example ndash Step 1

Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example

Step 1 Identify the Contract or Contracts with a Customerndash In Step 1 Leon determines that prima facie

bull the contract with Andy meets all the contract criteria and

bull there is only one contract

24102017

37


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 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 identifiable from other promises in the contract (HKFRS 15IN7)

Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the




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 asA 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

24102017

38



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)

Performance obligations











24102017

39



Step 2 Identify the Performance Obligations in the Contractndash In Step 2 Leon observes that Leon as a franchisor has developed a

customary business practice to undertake activities such as analysing the consumersrsquo changing preferences and implementing product improvements pricing strategies marketing campaigns and operational efficiencies to support the franchise name However Leon concludes that these activities do not directly transfer goods or services to Andy because they are part of Leonrsquos promise to grant a licence

ndash Leon determines that it has two promises to transfer goods or services (a) a promise to transfer equipment and (b) a promise to grant a licence

Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example


Step 3 Determine Transaction Price

bull Step 3 Determining the Transaction Prices

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)

Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40




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 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 15IN7)

Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the




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

24102017

41



Yes

Is there any variable consideration

Choose one of the two methods to estimate the variable

consideration (depending on which can better predict the

consideration entitled)

The most likely amount method (may be appropriate for

the contract with only two possible outcomes)

The expected value method(may be appropriate for large number of contracts with similar characteristics)













24102017

42



Step 3 Determine the Transaction Pricendash In Step 3 Leon is required to determine the transaction price of the

contract

ndash Based on the contract terms Leon determines that the transaction price of Leonrsquos contract includes a fixed consideration of $150000 for the equipment and a variable consideration ie a sales‐based royalty of 5 of Andyrsquos monthly sales

Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Step 3 Determine the Transaction Pricendash Sales‐based or usage‐based royalty may result in variable consideration in

an entityrsquos contract with a customer

ndash To account for consideration in the form of a sales‐based or usage‐based royalty that is promised in exchange for a licence of intellectual property Leon is specifically required to recognise revenue only when or as the later of the following events occurs

a the subsequent sale or usage occurs and

b the performance obligation to which some or all of the sales‐based or usage‐based royalty has been allocated has been satisfied (or partially satisfied)

Example

24102017

43


Step 4 Allocate Transaction Price to PO

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 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)

Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the




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)

Based on Stand‐alone Selling Price (SASP)

Allocation of a Discount

Allocation of Variable Consideration

24102017

44



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)






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


24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the



Step 4 Determine the Transaction Pricendash In Step 4 Leon has to determine whether the transaction price should be

allocated to the two performance obligations in the contract

ndash Leon applies HKFRS 15 to determine whether the variable consideration should be allocated entirely to the performance obligation to transfer the franchise licence

24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the



Step 4 Determine the Transaction Pricendash Leon concludes that the variable consideration (ie the sales‐based royalty)

should be allocated entirely to the franchise licence because the variable consideration relates entirely to Leonrsquos promise to grant the franchise licence

ndash In addition Leon observes that allocating $150000 to the equipment and the sales‐based royalty to the franchise licence would be consistent with an allocation based on Leonrsquos relative stand‐alone selling prices in similar contracts

ndash Since Leonrsquos stand‐alone selling price of the equipment is $150000 and Leon regularly licenses franchises in exchange for 5 of Andyrsquos sales

ndash Consequently Leon concludes that the variable consideration (ie the sales‐based royalty) should be allocated entirely to the performance obligation to grant the franchise licence

Example


Step 5 Satisfy Performance Obligations

bull Step 5 Satisfaction of 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)

Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47




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)

Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the




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)

24102017

48



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



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

24102017

49



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



No

No

Does the customer receive and consume the benefits provided by the entity as the entity performs

Does the customer control the asset being created or enhanced by the entity

Does the entityrsquos performance create an asset with an alternative use to the entity

Yes

Performance obligationssatisfied at a point in time

Performance obligationsatisfied over time

Does the entity have an enforceable right to payment for performance completed to date

No

Yes

Yes

No

Yes

Measuring progress towards complete satisfaction of that performance

bull Determine at contract inception


24102017

50



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



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

24102017

51



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


5 Steps Recognition and Measurement

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)

Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the



Step 5 Recognise Revenue When the Entity Satisfies a Performance Obligationndash In Step 5 Leon is required to recognise revenue when or as it satisfies a

performance obligation by transferring a promised good or service (ie an asset) to the customer Andy

ndash An asset is transferred when or as the customer obtains control of that asset The amount of revenue recognised is the amount allocated to the satisfied performance obligation A performance obligation may be satisfied at a point in time or over time

24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example

Step 5 Recognise Revenue When the Entity Satisfies a Performance Obligationndash Leon identifies two performance obligations

(a) a promise to transfer equipment and

(b) a promise to grant a franchise licence

ndash For a promise of transfer equipment the performance obligation is satisfied at a point in time as the three criteria for performance obligation satisfied over time are not met

bull While the allocated transaction price to it is the fixed consideration of $150000 Leon finally recognises the fixed consideration when that promise is satisfied by delivering the equipment to Andy (ie control transferred)



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example

Step 5 Recognise Revenue When the Entity Satisfies a Performance Obligationndash For a promise of transfer a franchise licence the variable consideration ie

in the form of the sales‐based royalty is allocated entirely to the franchise licence

bull Then the final step in recognised the allocated transaction price is to determine whether the performance obligation in licence transfer is satisfied at a point in time or over time

bull HKFRS 15 has a specific application guidance for licensing which also includes sales‐based or usage‐based royalty


24102017

54


Effective Date and Transition

bull An entity shall apply HKFSR 15 for annual reporting periods beginning on or after 1 January 2018


ndash If an entity applies HKFRS 15 earlier it shall disclose that fact(HKFRS 15C1)



bull An entity shall apply HKFRS 15 using one of the following two methods

a) retrospectively to each prior reporting period presented in accordance with HKAS 8 subject to the expedients in para C5 or

b) retrospectively with the cumulative effect of initially applying HKFRS 15recognised at the date of initial application in accordance with para C7ndashC8 (HKFRS 15C3)

The date of initial application is the start of the reporting period in which an entity first applies HKFRS 15

Practical expedients are available

24102017

55

copy 2013‐2017 Nelson Consulting Limited 109Photo taken by Stephanie and Nelson copy 2016


Todayrsquos Agenda




24102017

56


HKFRS 16 Leases

Photo taken by Stephanie and Nelson copy 2016Heidelberg Castle Germany


Introduction

bull IFRS 16 Leases was issued in January 2016

bull Lessee accounting

ndash IFRS 16 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months unless the underlying asset is of low value

ndash A lessee is required to recognise (initially measure on a present value basis)

bull a right‐of‐use asset representing its right to use the underlying leased asset and

bull a lease liability representing its obligation to make lease payments

bull Lessor accounting

ndash IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17 and accordingly a lessor continues

bull to classify its leases as operating leases or finance leases and

bull to account for those two types of leases differently

24102017

57


Introduction

bull HKFRS 16 issued in May 2016

bull Effective Date of IFRSHKFRS 16

ndash An entity shall apply HKFRS 16 for annual reporting periods beginning on or after 1 January 2019

ndash Earlier application is permitted for entities that apply HKFRS 15 Revenue from Contracts with Customers at or before the date of initial application of HKFRS 16

ndash If an entity applies HKFRS 16 earlier it shall disclose that fact


Introduction

bull HKFRS 16 supersedes the following Standards and Interpretations

(a) HKAS 17 Leases

(b) HKFRIC 4 Determining whether an Arrangement contains a Lease

(c) HK(SIC)‐15 Operating LeasesmdashIncentives and

(d) HK(SIC)‐27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease

24102017

58


HKFRS 16 ndash Contents

1 Objective

2 Scope

3 Recognition Exemptions

4 Identifying a Lease

5 Lease Term

6 Lessee

7 Lessor

8 Sales and Leaseback Transactions


Todayrsquos update


HKFRS 16

Yes

Assess a contract whether it is a lease or contains a lease

Determining lease term

Lessee accounting

No

Not within HKFRS 16

Lessor accounting

Reporting exemption is applicable and elected

No

Recogniseassets and liabilities

for all leases

Recogniselease paymentsas an expense

Yes

Sale and leaseback transactions


24102017

59


3 Reporting Exemptions

bull A lessee may elect not to apply the requirements in HKFRS 16 (HKFRS 1622ndash49) to

(a) short‐term leases and

(b) leases for which the underlying asset is of low value(as described in HKFRS 16B3ndashB8)

HKFRS 16 defines short‐term lease as

bull A lease that at the commencement date has a lease term of 12 months or less

bull A lease that contains a purchase option is not a short‐term lease



bull Leases for which the underlying asset is of low value

ndash A lessee shall assess the value of an underlying asset based on the value of the asset when it is new regardless of the age of the asset being leased (HKFRS 16B3)

ndash The assessment of whether an underlying asset is of low value is performed on an absolute basis

bull Leases of low‐value assets qualify for the accounting treatment in HKFRS 166 regardless of whether those leases are material to the lessee

bull The assessment is not affected by the size nature or circumstances of the lessee

bull Accordingly different lessees are expected to reach the same conclusions about whether a particular underlying asset is of low value (HKFRS 16B4)

24102017

60



‒ A lease of an underlying asset does not qualify as a lease of a low‐value asset if the nature of the asset is such that when new the asset is typically not of low value

bull For example leases of cars would not qualify as leases of low‐value assets because a new car would typically not be of low value (HKFRS 16B6)

‒ If a lessee subleases an asset or expects to sublease an asset the head lease does not qualify as a lease of a low‐value asset (HKFRS 16B7)

‒ Examples of low‐value underlying assets can include

bull tablet and personal computers

bull small items of office furniture and

bull telephones (HKFRS 16B8)

Example




HKFRS 16 defines lease as

bull A contract or part of a contract that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration

bull At inception of a contract an entity shall assess whether the contract is or contains a lease

bull A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration(HKFRS 169)

24102017

61



bull HKFRS 16B9ndashB31 set out guidance on the assessment of whether a contract is or contains a lease (HKFRS 169)

HKFRS 16 defines inception date of a lease as the earlier of

‒ the date of a lease agreement and

‒ the date of commitment by the parties to the principal terms and conditions of the lease



bull A period of time

ndash may be described in terms of the amount of use of an identified asset for example

bull the number of production units that an item of equipment will be used to produce (HKFRS 1610)

bull An entity shall reassess whether a contract is or contains a lease only if the terms and conditions of the contract are changed (HKFRS 1611)

24102017

62



bull To assess whether a contract conveys the right to control the use of an identified asset (see HKFRS 16B13ndashB20) for a period of time an entity shall assess whether throughout the period of use the customer has both of the following

a the right to obtain substantially all of the economic benefits from use of the identified asset (as described in HKFRS 16B21ndashB23) and

b the right to direct the use of the identified asset (as described in HKFRS 16B24ndashB30) (HKFRS 16B9)



bull HKFRS 16 illustrates how an entity makes the assessment of whether a contract is a lease or contains a lease or the right to control the use of an identified asset for a period of time as follows

ndash Is there an identified asset

ndash Does the lessee have the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use

ndash Does the lessee have the right to direct how and for what purpose the asset is used throughout the period of use

Contract contains a lease Contract does not contain a lease

24102017

63


4 Identifying a Lease ndash Simple Case

bull In simple case

ndash a lessee has the right to direct the use of an identified asset throughout the period of use when the lessee has the right to direct how and for what purpose the asset is used throughout the period of use


copy 2013‐2017 Nelson Consulting Limited 126Adapted from HKFRS 16B31


Is there an identified asset (HKFRS 16B13‐B20)

Yes

No


No

Yes

SupplierCustomer

Does the customer have the right to obtain substantiallyall of the economic benefits from use of the asset throughout the period of use (HKFRS 16B21ndashB23)

Does the customer the supplier or neither party have the right to direct how and for what purpose the asset is used throughout

the period of use (HKFRS 16B25ndashB30)

24102017

64


4 Identifying a Lease ndash Complicated Case

bull In more complicated situations a lessee (or customer) has the right to direct the use of an identified asset throughout the period of use if either

a the customer has the right to direct how and for what purpose the asset is used throughout the period of use or

b the relevant decisions about how and for what purpose the asset is used are predetermined and

i the customer has the right (or to direct others) to operate the asset throughout the period of use without the supplier having the right to change those operating instructions or

ii the customer designed the asset in a way that predetermines how and for what purpose the asset will be used throughout the period of use





Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No

Neither how and for what purpose the asset will be used is predetermined

Does the customer have the right to operate the asset throughout the period of use without the supplier having the

right to change those operating instructions (HKFRS 16B24(b)(i))

Did the customer design the asset in a way that predetermines how and for what purpose the asset will be used throughout the

period of use (HKFRS 16B24(b)(ii))

24102017

65


5 Lease Term

bull An entity shall determine the lease term as the non‐cancellable period of a lease together with both

(a) periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option and

(b) periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option

bull In assessing whether a lessee is reasonably certain to exercise an option to extend a lease or not to exercise an option to terminate a lease an entity shall consider all relevant facts and circumstances that create an economic incentive for the lessee to exercise the option to extend the lease or not to exercise the option to terminate the lease as described in HKFRS 16B37ndashB40


6 Lessee ndash Recognition

bull Recognition

ndash At the commencement date a lessee shall recognise

bull a right‐of‐use asset and

bull a lease liability (HKFRS 1622)

HKFRS 16 defines right‐of‐use asset as

bull An asset that represents a lesseersquos right to use an underlying asset for the lease term

Lease Liability

Right‐of‐Use Asset

24102017

66


6 Lessee ndash Initial Measurement

bull Initial Measurement of the Right‐of‐Use Asset

ndash At the commencement date a lessee shall measure the right‐of‐use asset at cost(HKFRS 1623) Right‐of‐Use Asset

HKFRS 16 defines commencement date of a lease as

bull The date on which a lessor makes an underlying asset available for use by a lessee



bull The cost of the right‐of‐use asset shall comprise

(a) the amount of the initial measurement of the lease liability as described in HKFRS 1626

(b) any lease payments made at or before the commencement date less any lease incentives received

(c) any initial direct costs incurred by the lessee and

(d) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease unless those costs are incurred to produce inventories

bull The lessee incurs the obligation for those costs either

ndash at the commencement date or

ndash as a consequence of having used the underlying asset during a particular period (HKFRS 1624)

Lease liab amount

Incl rental incentives

Incl costs in restoringSimilar to

HKAS 16 PPE

excl rental deposits

24102017

67



bull Initial Measurement of the Lease Liability

ndash At the commencement date a lessee shall measure the lease liability at the present value of the lease payments that are not paid at that date

ndash The lease payments shall be discounted using the interest rate implicit in the lease

bull If that rate (ie the interest rate implicit in the lease) can be readily determined

the lessee shall use that rate

bull If that rate cannot be readily determined

the lessee shall use the lesseersquos incremental borrowing rate (HKFRS 1626)

Lease Liability

Use that rate first

Affected by eg the credit rating



bull At the commencement date the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date(a) fixed payments (including in‐substance fixed payments as described in

HKFRS 16B42) less any lease incentives receivable

(b) variable lease payments that depend on an index or a rate initially measured using the index or rate as at the commencement date (as described in HKFRS 1628)

(c) amounts expected to be payable by the lessee under residual value guarantees

(d) the exercise price of a purchase option if the lessee is reasonably certain to exercise that option (assessed considering the factors described in HKFRS 16B37ndashB40) and

(e) payments of penalties for terminating the lease if the lease term reflects the lessee exercising an option to terminate the lease

24102017

68


6 Lessee ndash Subsequent Measurement

bull Subsequent Measurement of the Right‐of‐Use Asset

ndash After the commencement date a lessee shall measure the right‐of‐use asset

bull applying a cost model

bull unless it applies either of the measurement modelsdescribed in HKFRS 1634 and 35 (HKFRS 1629)


MeasurementModels

CostModel



bull To apply a cost model a lessee shall measure the right‐of‐use asset at cost

(a) less any accumulated depreciationand any accumulated impairment losses and

(b) adjusted for any remeasurementof the lease liability specified in HKFRS 1636(c)


CostModel

24102017

69



bull If a lessee applies the fair value model in HKAS 40 Investment Property to its investment property the lessee shall also applythat fair value model to right‐of‐use assets that meet the definition of investment property in HKAS 40

bull If right‐of‐use assets relate to a class of property plant and equipment to which the lessee applies the revaluation model in HKAS 16 a lessee may elect to apply that revaluation model to all of the right‐of‐use assets that relate to that class of property plant and equipment


MeasurementModels



bull Subsequent Measurement of the Lease Liability

ndash After the commencement date a lessee shall measure the lease liability by

(a) increasing the carrying amount to reflect interest on the lease liability

(b) reducing the carrying amount to reflect the lease payments made and

(c) remeasuring the carrying amount

ndash to reflect any reassessment or lease modifications specified in HKFRS 1639ndash46 or

ndash to reflect revised in‐substance fixed lease payments (see HKFRS 16B42) (HKFRS 1636)

Lease Liability

24102017

70


Summary ndash Effect on Fin Position

The IASBrsquos Effect Analysis on IFRS 16 of January 2016


Summary ndash Effect on Profit or Loss


24102017

71

copy 2013‐2017 Nelson Consulting Limited 141Photo taken by Stephanie and Nelson copy 2016Venice Italy



QampA SessionQampA Session


24102017

72





wwwNelsonCPAcomtraininghtm


24102017

2



bull Amendments to HKAS 7 Disclosure Initiative (Statement of Cash Flows)

bull Amendments to HKAS 12 Recognition of Deferred Tax Assets for Unrealised Losses

bull Annual Improvements to HKFRSs 2014-2016 Cycle (Amendments to HKFRS 12)

bull Amendments to HKFRS for Private Entities

1 Jan 2017

1 Jan 2017

1 Jan 2017

1 Jan 2017






bull HKFRS 9 (2014) Financial Instrumentsbull HKFRS 15 Revenue from Contracts with Customersbull Amendments to HKFRS 15 Effective Date of HKFRS 15

Revenue from Contracts with Customersbull Amendments to HKFRS 15 Clarifications to HKFRS 15

Revenue from Contracts with Customersbull Amendments to HKFRS 2 Classification and Measurement of

Share-based Payment Transactionsbull Amendments to HKFRS 4 Applying HKFRS 9 and HKFRS 4bull Amendments to HKAS 40 Transfers of Investment Propertybull Annual Improvements to HKFRSs 2014-2016 Cycle

(Amendments to HKFRS 1 and HKAS 28) bull Hong Kong (IFRIC) Interpretation 22 Foreign Currency

Transactions and Advance Consideration

1 Jan 2018 1 Jan 2017 1 Jan 2018

1 Jan 2018

1 Jan 2018

1 Jan 2018 1 Jan 2018 1 Jan 2018

1 Jan 2018




24102017

3






1 Jan 2019 1 Jan 2019







Todayrsquos Agenda





Recap and Update


Flowchart

24102017

4



Todayrsquos Agenda




24102017

5









24102017

6








5 other changes








Long‐term debt 1040 160 200 900 2300

Example


24102017

7







24102017

8











24102017

9







Example


24102017

10


Todayrsquos Agenda






24102017

11



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting













24102017

12


No





interest


measurement

No


No

Yes

Yes


cash flow

Yes



interest

Yes

Yes

No

No


Yes












1 2 3 4 5

24102017

13








measurement


No


cash flow

Yes


interest

Amortised Cost

Yes





measurement


No


cash flow



interest

YesYes


interest

Yes

24102017

14


















No


Yes

24102017

15






Fair value option

Equity instrument


No

Yes

No


No



Yes


Profit or Loss









Fair value option

Equity instrument


No

Yes

No


No



Yes


24102017

16



measurement


Yes












24102017

17





No



hedging instrument



No










No

Yes

No

Yes

No

Yes




YesNo


Embeddedderivative





assets

24102017

18



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting




Initial measurement







Transaction Cost

+

To align HKFRS 15

24102017

19





a amortised cost













No




1 2

24102017

20





















24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

3






1 Jan 2019 1 Jan 2019







Todayrsquos Agenda





Recap and Update


Flowchart

24102017

4



Todayrsquos Agenda




24102017

5









24102017

6








5 other changes








Long‐term debt 1040 160 200 900 2300

Example


24102017

7







24102017

8











24102017

9







Example


24102017

10


Todayrsquos Agenda






24102017

11



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting













24102017

12


No





interest


measurement

No


No

Yes

Yes


cash flow

Yes



interest

Yes

Yes

No

No


Yes












1 2 3 4 5

24102017

13








measurement


No


cash flow

Yes


interest

Amortised Cost

Yes





measurement


No


cash flow



interest

YesYes


interest

Yes

24102017

14


















No


Yes

24102017

15






Fair value option

Equity instrument


No

Yes

No


No



Yes


Profit or Loss









Fair value option

Equity instrument


No

Yes

No


No



Yes


24102017

16



measurement


Yes












24102017

17





No



hedging instrument



No










No

Yes

No

Yes

No

Yes




YesNo


Embeddedderivative





assets

24102017

18



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting




Initial measurement







Transaction Cost

+

To align HKFRS 15

24102017

19





a amortised cost













No




1 2

24102017

20





















24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

4



Todayrsquos Agenda




24102017

5









24102017

6








5 other changes








Long‐term debt 1040 160 200 900 2300

Example


24102017

7







24102017

8











24102017

9







Example


24102017

10


Todayrsquos Agenda






24102017

11



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting













24102017

12


No





interest


measurement

No


No

Yes

Yes


cash flow

Yes



interest

Yes

Yes

No

No


Yes












1 2 3 4 5

24102017

13








measurement


No


cash flow

Yes


interest

Amortised Cost

Yes





measurement


No


cash flow



interest

YesYes


interest

Yes

24102017

14


















No


Yes

24102017

15






Fair value option

Equity instrument


No

Yes

No


No



Yes


Profit or Loss









Fair value option

Equity instrument


No

Yes

No


No



Yes


24102017

16



measurement


Yes












24102017

17





No



hedging instrument



No










No

Yes

No

Yes

No

Yes




YesNo


Embeddedderivative





assets

24102017

18



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting




Initial measurement







Transaction Cost

+

To align HKFRS 15

24102017

19





a amortised cost













No




1 2

24102017

20





















24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

5









24102017

6








5 other changes








Long‐term debt 1040 160 200 900 2300

Example


24102017

7







24102017

8











24102017

9







Example


24102017

10


Todayrsquos Agenda






24102017

11



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting













24102017

12


No





interest


measurement

No


No

Yes

Yes


cash flow

Yes



interest

Yes

Yes

No

No


Yes












1 2 3 4 5

24102017

13








measurement


No


cash flow

Yes


interest

Amortised Cost

Yes





measurement


No


cash flow



interest

YesYes


interest

Yes

24102017

14


















No


Yes

24102017

15






Fair value option

Equity instrument


No

Yes

No


No



Yes


Profit or Loss









Fair value option

Equity instrument


No

Yes

No


No



Yes


24102017

16



measurement


Yes












24102017

17





No



hedging instrument



No










No

Yes

No

Yes

No

Yes




YesNo


Embeddedderivative





assets

24102017

18



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting




Initial measurement







Transaction Cost

+

To align HKFRS 15

24102017

19





a amortised cost













No




1 2

24102017

20





















24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

6








5 other changes








Long‐term debt 1040 160 200 900 2300

Example


24102017

7







24102017

8











24102017

9







Example


24102017

10


Todayrsquos Agenda






24102017

11



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting













24102017

12


No





interest


measurement

No


No

Yes

Yes


cash flow

Yes



interest

Yes

Yes

No

No


Yes












1 2 3 4 5

24102017

13








measurement


No


cash flow

Yes


interest

Amortised Cost

Yes





measurement


No


cash flow



interest

YesYes


interest

Yes

24102017

14


















No


Yes

24102017

15






Fair value option

Equity instrument


No

Yes

No


No



Yes


Profit or Loss









Fair value option

Equity instrument


No

Yes

No


No



Yes


24102017

16



measurement


Yes












24102017

17





No



hedging instrument



No










No

Yes

No

Yes

No

Yes




YesNo


Embeddedderivative





assets

24102017

18



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting




Initial measurement







Transaction Cost

+

To align HKFRS 15

24102017

19





a amortised cost













No




1 2

24102017

20





















24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

7







24102017

8











24102017

9







Example


24102017

10


Todayrsquos Agenda






24102017

11



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting













24102017

12


No





interest


measurement

No


No

Yes

Yes


cash flow

Yes



interest

Yes

Yes

No

No


Yes












1 2 3 4 5

24102017

13








measurement


No


cash flow

Yes


interest

Amortised Cost

Yes





measurement


No


cash flow



interest

YesYes


interest

Yes

24102017

14


















No


Yes

24102017

15






Fair value option

Equity instrument


No

Yes

No


No



Yes


Profit or Loss









Fair value option

Equity instrument


No

Yes

No


No



Yes


24102017

16



measurement


Yes












24102017

17





No



hedging instrument



No










No

Yes

No

Yes

No

Yes




YesNo


Embeddedderivative





assets

24102017

18



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting




Initial measurement







Transaction Cost

+

To align HKFRS 15

24102017

19





a amortised cost













No




1 2

24102017

20





















24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

8











24102017

9







Example


24102017

10


Todayrsquos Agenda






24102017

11



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting













24102017

12


No





interest


measurement

No


No

Yes

Yes


cash flow

Yes



interest

Yes

Yes

No

No


Yes












1 2 3 4 5

24102017

13








measurement


No


cash flow

Yes


interest

Amortised Cost

Yes





measurement


No


cash flow



interest

YesYes


interest

Yes

24102017

14


















No


Yes

24102017

15






Fair value option

Equity instrument


No

Yes

No


No



Yes


Profit or Loss









Fair value option

Equity instrument


No

Yes

No


No



Yes


24102017

16



measurement


Yes












24102017

17





No



hedging instrument



No










No

Yes

No

Yes

No

Yes




YesNo


Embeddedderivative





assets

24102017

18



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting




Initial measurement







Transaction Cost

+

To align HKFRS 15

24102017

19





a amortised cost













No




1 2

24102017

20





















24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

9







Example


24102017

10


Todayrsquos Agenda






24102017

11



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting













24102017

12


No





interest


measurement

No


No

Yes

Yes


cash flow

Yes



interest

Yes

Yes

No

No


Yes












1 2 3 4 5

24102017

13








measurement


No


cash flow

Yes


interest

Amortised Cost

Yes





measurement


No


cash flow



interest

YesYes


interest

Yes

24102017

14


















No


Yes

24102017

15






Fair value option

Equity instrument


No

Yes

No


No



Yes


Profit or Loss









Fair value option

Equity instrument


No

Yes

No


No



Yes


24102017

16



measurement


Yes












24102017

17





No



hedging instrument



No










No

Yes

No

Yes

No

Yes




YesNo


Embeddedderivative





assets

24102017

18



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting




Initial measurement







Transaction Cost

+

To align HKFRS 15

24102017

19





a amortised cost













No




1 2

24102017

20





















24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

10


Todayrsquos Agenda






24102017

11



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting













24102017

12


No





interest


measurement

No


No

Yes

Yes


cash flow

Yes



interest

Yes

Yes

No

No


Yes












1 2 3 4 5

24102017

13








measurement


No


cash flow

Yes


interest

Amortised Cost

Yes





measurement


No


cash flow



interest

YesYes


interest

Yes

24102017

14


















No


Yes

24102017

15






Fair value option

Equity instrument


No

Yes

No


No



Yes


Profit or Loss









Fair value option

Equity instrument


No

Yes

No


No



Yes


24102017

16



measurement


Yes












24102017

17





No



hedging instrument



No










No

Yes

No

Yes

No

Yes




YesNo


Embeddedderivative





assets

24102017

18



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting




Initial measurement







Transaction Cost

+

To align HKFRS 15

24102017

19





a amortised cost













No




1 2

24102017

20





















24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

11



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting













24102017

12


No





interest


measurement

No


No

Yes

Yes


cash flow

Yes



interest

Yes

Yes

No

No


Yes












1 2 3 4 5

24102017

13








measurement


No


cash flow

Yes


interest

Amortised Cost

Yes





measurement


No


cash flow



interest

YesYes


interest

Yes

24102017

14


















No


Yes

24102017

15






Fair value option

Equity instrument


No

Yes

No


No



Yes


Profit or Loss









Fair value option

Equity instrument


No

Yes

No


No



Yes


24102017

16



measurement


Yes












24102017

17





No



hedging instrument



No










No

Yes

No

Yes

No

Yes




YesNo


Embeddedderivative





assets

24102017

18



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting




Initial measurement







Transaction Cost

+

To align HKFRS 15

24102017

19





a amortised cost













No




1 2

24102017

20





















24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

12


No





interest


measurement

No


No

Yes

Yes


cash flow

Yes



interest

Yes

Yes

No

No


Yes












1 2 3 4 5

24102017

13








measurement


No


cash flow

Yes


interest

Amortised Cost

Yes





measurement


No


cash flow



interest

YesYes


interest

Yes

24102017

14


















No


Yes

24102017

15






Fair value option

Equity instrument


No

Yes

No


No



Yes


Profit or Loss









Fair value option

Equity instrument


No

Yes

No


No



Yes


24102017

16



measurement


Yes












24102017

17





No



hedging instrument



No










No

Yes

No

Yes

No

Yes




YesNo


Embeddedderivative





assets

24102017

18



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting




Initial measurement







Transaction Cost

+

To align HKFRS 15

24102017

19





a amortised cost













No




1 2

24102017

20





















24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

13








measurement


No


cash flow

Yes


interest

Amortised Cost

Yes





measurement


No


cash flow



interest

YesYes


interest

Yes

24102017

14


















No


Yes

24102017

15






Fair value option

Equity instrument


No

Yes

No


No



Yes


Profit or Loss









Fair value option

Equity instrument


No

Yes

No


No



Yes


24102017

16



measurement


Yes












24102017

17





No



hedging instrument



No










No

Yes

No

Yes

No

Yes




YesNo


Embeddedderivative





assets

24102017

18



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting




Initial measurement







Transaction Cost

+

To align HKFRS 15

24102017

19





a amortised cost













No




1 2

24102017

20





















24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

14


















No


Yes

24102017

15






Fair value option

Equity instrument


No

Yes

No


No



Yes


Profit or Loss









Fair value option

Equity instrument


No

Yes

No


No



Yes


24102017

16



measurement


Yes












24102017

17





No



hedging instrument



No










No

Yes

No

Yes

No

Yes




YesNo


Embeddedderivative





assets

24102017

18



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting




Initial measurement







Transaction Cost

+

To align HKFRS 15

24102017

19





a amortised cost













No




1 2

24102017

20





















24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

15






Fair value option

Equity instrument


No

Yes

No


No



Yes


Profit or Loss









Fair value option

Equity instrument


No

Yes

No


No



Yes


24102017

16



measurement


Yes












24102017

17





No



hedging instrument



No










No

Yes

No

Yes

No

Yes




YesNo


Embeddedderivative





assets

24102017

18



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting




Initial measurement







Transaction Cost

+

To align HKFRS 15

24102017

19





a amortised cost













No




1 2

24102017

20





















24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

16



measurement


Yes












24102017

17





No



hedging instrument



No










No

Yes

No

Yes

No

Yes




YesNo


Embeddedderivative





assets

24102017

18



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting




Initial measurement







Transaction Cost

+

To align HKFRS 15

24102017

19





a amortised cost













No




1 2

24102017

20





















24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

17





No



hedging instrument



No










No

Yes

No

Yes

No

Yes




YesNo


Embeddedderivative





assets

24102017

18



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting




Initial measurement







Transaction Cost

+

To align HKFRS 15

24102017

19





a amortised cost













No




1 2

24102017

20





















24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

18



1 Objective

2 Scope


4 Classification

5 Measurement

6 Hedge Accounting




Initial measurement







Transaction Cost

+

To align HKFRS 15

24102017

19





a amortised cost













No




1 2

24102017

20





















24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

19





a amortised cost













No




1 2

24102017

20





















24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

20





















24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

21







initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses












3 Lease receivable

4 Contract asset or


24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

22



















24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

23







initial recognition




applied















24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

24







Yes



Yes

No


YesNo



Stage 2 Stage 3






Example





24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

25





Example









Example








$30000000 $975000

24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

26







initial recognition


applied












24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

27









Three‐Stage Model





24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

28





Interest revenue










Credit‐impaired













initial recognition

No



Yes

No


applied

Yes

Yes


Yes

Yes

No

No


YesNo



credit losses





24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

29




HKFRS 9


(HKFRS 9)








24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

30







ndash Impairment



24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

31












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

32



bull Effective Date




Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






b HKAS 18 Revenue





Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

33



A Objective

B Scope






E Contract costs

F Presentation

G Disclosure

Todayrsquos update


Scope

Yes

No


other HKFRSs






No

Yes


Yes



other HKFRSs)

24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

34



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the














24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

35









No

Yes



No

Not within HKFRS 15

Yes




Yes



No


Yes



24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

36













Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example




24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

37










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the












24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

38

















24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

39






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example










Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

40







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the
















24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

41



Yes




















24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

42




contract


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example



Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the







Example

24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

43







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the









24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

44














c Residual approach



24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

45












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

46


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








Example







Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

47








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the








24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

48








Over Time

At a Point in Time









Over Time

At a Point in Time

24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

49







Over Time



No

No




Yes




No

Yes

Yes

No

Yes




24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

50








Over Time

Measuring Progress






At a Point in Time

24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

51









At a Point in Time






Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

52












Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the






24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

53


Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example








Step 5 Recognise



price

Step 3 Determine

the transaction

price


Step 1 Identify the


Example






24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

54













24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

55



Todayrsquos Agenda




24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

56


HKFRS 16 Leases



Introduction











24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

57


Introduction







Introduction


(a) HKAS 17 Leases




24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

58



1 Objective

2 Scope



5 Lease Term

6 Lessee

7 Lessor



Todayrsquos update


HKFRS 16

Yes



Lessee accounting

No

Not within HKFRS 16

Lessor accounting


No


for all leases


Yes



24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

59

















24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

60










Example








24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

61













24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

62













24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

63



bull In simple case






Yes

No


No

Yes

SupplierCustomer




24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

64












Yes

No


No

Yes

SupplierCustomer




Yes No

Yes

No






24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

65


5 Lease Term







bull Recognition






Lease Liability


24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

66

















Lease liab amount



HKAS 16 PPE


24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

67










Lease Liability

Use that rate first










24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

68








MeasurementModels

CostModel







CostModel

24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

69






MeasurementModels










Lease Liability

24102017

70







24102017

71






24102017

72







24102017

70







24102017

71






24102017

72







24102017

71






24102017

72







24102017

72







updates and application of new and revised hkfrss for … · 24/10/2017 1 © 2013‐2017 nelson...

Documents