Yes, it is possible to change the year-end date for a company in Hong Kong, from both an accountant and a tax perspective.
Accounting and bookkeeping can turn out to be very beneficial for any organization which is incorporated in Hong Kong as it helps in keeping a track of all the cash inflow/outflow, payment of relevant taxes, tax filings, etc., which eventually gives a clear future outlook of the company as well as helps in planning better business strategies and ensures that a business runs more efficiently by striking off taxation hazards in future. Accounting and bookkeeping in Hong Kong is a very time-consuming and dynamic function as the region functions on a pre-defined set of accounting standards and interpretations which cannot be violated. In order to work in accordance with these standards and interpretations, a company must have a back support which has proper knowledge of the country’s accounting policies as it is a very challenging task and requires a lot of time, experience, and efficiency.
Hong Kong has introduced certain standards for accounting and financial reporting which vary for different business entities. A brief description of various reporting standards is given below.
The Hong Kong company ordinance states that any organization incorporated and registered within the territory must work according to the pre-defined framework of the Hong Kong Financial Reporting Standards (HKFRS) which is based on the International Financial Reporting Standards (IFRS). Companies incorporated in Hong Kong strictly tend to prepare their financial statements in accordance with the HKFRS. The HKFRS is nothing but a set of financial standards and interpretations which have been issued by the Hong Kong Institute of Certified Public Accountants (HKICPA).
The Hong Kong Accounting Standards, or simply HKAS, are a set of accounting standards which must be followed by every organization which is incorporated or wishes to incorporate in Hong Kong. Till now, 31 accounting standards have been published and issued by the Hong Kong Institute of Certified Public Accountants (HKICPA). The violation of these standards may result in a penalty of up to 100,000 HKD.
A private entity, according to the section 1 of HKFRS, is a type of entity which does not have public accountability and which publishes general purpose financial statements for external users. The International Accounting Standards Board (IASB) developed and published a separate financial reporting standard for private entities which was further issued by the Hong Kong Institute of Certified Public Accountants. This standard is known as the Financial Reporting Standard for Private Entities (HKFRS-PE), and it holds the objective of easing out the reporting process for the private entities by exempting them from the long procedure of applying to the full Hong Kong Financial Reporting Standards.
Any company which is incorporated under the Hong Kong Company Ordinance must qualify the eligibility criteria, generally termed as “reporting exemption criteria”, in order to report under the Small and Medium Sized Entity Financial Reporting Standard (SME-FRS) as well as the Small and Medium Sized Entity Financial Reporting Framework (SME-FRF). The entities which are eligible for availing this reporting standard are:
Issued by the Hong Kong Institute of Certified Public Accountants, interpretations, altogether, refer to the Hong Kong International Financial Reporting Interpretations Committee (IFRIC) Interpretations (HK(IFRIC)-Int), Hong Kong Interpretations (HK-Int), Hong Kong Standard Interpretations Committee (SIC) Interpretations (HK(SIC)-Int) and Interpretations of Statements of Standard Accounting Practices (SSAPs). Interpretations give reliable guidance on the matter of concern that are likely to receive divergent or unacceptable treatment if such guidelines are not present. Till now, a total of 30 interpretations have been issued in which 17 interpretations have been stated under the HK(IFRIC)-Int, 3 under the HK-Int, and 10 under the HK(SIC)-Int.
Business Setup Worldwide is an international consulting firm which keenly understands the importance of accounting and bookkeeping in an organization. Our accounting and bookkeeping services in Hong Kong include:
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Business Setup Worldwide is a platform that helps foreign investors in establishing their company in Hong Kong. Our business experts take care of the accounting and bookkeeping, so you can focus on business development activities. They guide and plan the entire business and financial framework that helps a company to gain stability in a foreign land. Apart from dealing and sorting out the accounts and financial aspects, our experts also help in clearing the legal proceedings which are essential to be cleared in order to establish a business.