Why Does a Business Need Accounting and Bookkeeping Services?
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.
Accounting Standards in Hong Kong
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.
Hong Kong Financial Reporting Standards (HKFRS)
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).
Hong Kong Accounting Standards (HKAS)
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.
Financial Reporting Standard for Private Entities (HKFRS-PE)
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.
Financial Reporting Standard and Framework for Small and Medium-Sized Entities (SME-FRS and SME-FRF)
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:
- A private company which does not have any subsidiary and is not even a subsidiary of another company
- Small private company
- A group of small private companies
- Small company limited by guarantee
- A group of small companies wherein each company is limited by guarantee
- Larger private company which has been considered eligible
- A group of companies which has been considered eligible
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.
Services We Provide
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:
- Setting up an accounting framework
- Bookkeeping and financial reporting
- Preparing cash flow statements and budget for management
- Preparing annual statutory financial statements and liaising with auditors
- Preparing filing of tax returns
- Accounting advisory support services
Who We Are
Business Setup Worldwide is a platform which helps you with your company formation procedure and overall business holding and enhancing services. We facilitate the setup of your business through services like company registration, accounting, bookkeeping, intellectual property protection, etc.
We keep your business objectives at the centre of our operations. We specialize in business-oriented support activities, in face of the ever-changing global executive environment. We commit to adapt to the market and conceive innovative strategies to aid firms with their vision.
Business Setup Worldwide’s proprietary business design techniques, combined with its specialized industry knowledge and excellent global reach, enable companies to foresee changes in customer priorities and the competitive environment, and then shape their businesses and enhance operations to seize the opportunities created by those changes.
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.