The Accounting and Accounting Standards in Hong Kong

Posted by HongKong Company Registration on May 14th, 2021

All companies registered in Hong Kong must ensure timely annual filing of statutory returns to the Companies Registrar, as per the provisions of the city’s Companies Ordinance (CO). This is in addition to the company’s profits tax returns which are filed to the Inland Revenue Department of the Government of the Special Administrative Region of Hong Kong.

These compulsory statutory filings include all company’s annual returns, and changes in the company’s registered office address, and/or particulars of the company directors and the company secretary.

If the above is not done, it may result in prosecution and fines for any person in a responsible position in the company, including the company directors and the company secretary. Notably, the fines are steep in Hong Kong, with the maximum penalty for every breach being HK,000. For continuing offending, a daily default fine of HK,000 is imposed. 

What are the Accounting Standards in Hong Kong

In general, accounting standards in Hong Kong are known as Hong Kong Financial Reporting Standards (HKFRS). These HKFRS as prevalent now were adopted by the city in 2005 and had been modelled on the International Financial Reporting Standards, issued by the International Accounting Standards Board. These standards detail the measurement, presentation, recognition, and disclosure requirements of every transaction and event as it must be mentioned in a general-purpose financial statement of a Hong Kong-incorporated company.  

Scope of Hong Kong Financial Reporting Standards

Notably, in Hong Kong, HKFRS includes not only the Financial Reporting Standards, but also the Hong Kong Accounting Standards (HKAS) and the Interpretations issued by the Hong Kong Institute of Certified Public Accountants (HKICPA). Do note that the HKICPA is the accounting and auditing standard-setter, as well as in-charge of setting the professional ethical standards for accountants in Hong Kong. 

Read more about the Accounting Standards in Hong Kong at Hong Kong Company Registration.