ANNOUNCEMENT
Acceptance of International Accounting Standards (IAS) and
Generally Accepted Accounting Principles in the United States of America
(US GAAP)
The Stock Exchange of Hong Kong (The Exchange) proposes to amend the Exchange Listing Rules of the Main Board:-
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to allow listed issuers and listing applicants, which have or are to have a primary listing on the Exchange, to adopt IAS; and
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to allow overseas-incorporated listed issuers and listing applicants, which have or are to have a secondary listing on the Exchange, to adopt US GAAP.
The Exchange invites comments on the proposed rule amendments.
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The Exchange proposes the following amendments to the financial reporting requirements of the Exchange Listing Rules of the Main Board.
International Accounting Standards
The Exchange believes that listed issuers and listing applicants, irrespective of whether their primary listing is or is to be on the Exchange or on another stock exchange, should be permitted to adopt IAS. In view of the increasing use and recognition of IAS, it is possible that some listed issuers or listing applicants may prefer to use IAS, as this would enhance the accessibility of their financial statements to international investors. Moreover, it is expected that in future there will be further convergence of generally accepted accounting principles in Hong Kong ("HK GAAP") towards generally accepted international accounting principles.
US GAAP
The Exchange also proposes to allow overseas-incorporated listed issuers and listing applicants, which have or are to have a secondary listing on the Exchange, to adopt US GAAP. The financial reporting requirements of US GAAP are at least as stringent as those of HK GAAP and IAS. Acceptance of US GAAP by the Exchange would facilitate secondary listings on the Exchange for companies which already compile their financial statements under US GAAP. In view of the widespread familiarity of international investors with US GAAP and the continuing and steady globalisation of capital markets, greater acceptance by the Exchange of US GAAP would enhance the status and credibility of the Exchange and be beneficial for its long-term development as an international capital market.
It is intended that the proposed rule amendments, upon adoption, will apply with immediate effect.
In the meantime, the Exchange would like to invite comments on:-
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each of the proposals in respect of IAS and US GAAP, as set out above;
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whether listed issuers and listing applicants, which adopt IAS, would be required to disclose and explain differences of accounting practice between IAS and HK GAAP, which have a significant effect on their financial statements;
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whether listed issuers and listing applicants, which adopt IAS, would be required to compile a statement of the financial effect of the material differences referred to in (b) above; and
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whether listed issuers and listing applicants, which have or are to have a secondary listing on the Exchange and which adopt US GAAP, should be required to disclose the financial effect of stating their properties at valuation, rather than at cost.
Please send any written comments, together with the sender's name, occupation and contact details (making reference in the subject header to "Proposed acceptance of IAS and US GAAP") to:
Listing Division
The Stock Exchange of Hong Kong Limited
11/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Facsimile number : (852) 2868 5028
E-mail : listing@hkex.com.hk
Comments should be received by the Exchange on or before 17 November 2000.