Hong Kong Accounting Jargons Cheat Sheet

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Overwhelmed by accounting jargons and the countless acronyms? We're here to give you a quick cheat sheet on common terms used by accountants when they talk about tax, audit and compliance, and what it means in plain English!

AGM – Annual General Meeting

A meeting of all the shareholders and directors. This is a requirement of every Hong Kong company, unless it has passed a resolution dispensing with them. 

 

Each company must submit their financial statements as part of their AGM. Here are some general guidelines that apply to these meetings: 

Annual return

The annual return is submitted to IRD and acts as a record of activity for the company in the past year.  It must contain the following information:

Audited financial statements

This is a mandatory requirement for all companies in Hong Kong

  • Balance sheet
  • Income statement
  • All financial statements
  • All sales and purchase invoices
  • All expenditure receipts
  • All bank statements
  • All contracts
  • All relevant accounting documents

Bookkeeping

The maintenance and record keeping of the financial day to day of a business. The role is to ensure that individual financial exchanges and transactions are kept correct and updated. 

Companies Registry

The Hong Kong government department under the Financial Services and the Treasury Bureau. It is responsible for registrate local and foreign companies. 

Fiscal Year 

A fiscal year is a period of time that a company uses in preparing financial statements. The fiscal year can coincide with the calendar year; however, it can also be different. Fiscal-year start and end dates are normally determined by the company and may depend on how long it will take to close out the books for the year and prepare all financial statements for tax submittals.

FRS – Financial Reporting Standards 

A unified financial reporting standard that applies to all financial statements of entities in Hong Kong and rest of the worlds (besides EU) 

HKAS – Hong Kong Accounting Standard

Hong Kong Accounting Standards are a framework of rules governing how financial transactions are handled in the country.

HKICPA – Hong Kong Institute of Certified Public Accountants

Hong Kong Institute of Certified Public Accountants is the only licensed entity in Hong Kong responsible for registering and certifying accountants.

IASB – International Accounting Standards Board

An independent accounting standard-setting sector of the IFRS Foundation, founded on April 1st, 2001.

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IFRS – International Financial Reporting Standards

International accounting standards issued by the IFRS Foundation and the International Accounting Standards Board. 

IRD – Inland Revenue Department

This is the Hong Kong government department responsible for the tax and duties of companies and individuals

SFC – Securities and Futures Comission

The Hong Kong government department under the Financial Services and the Treasury Bureau. It is responsible for registering local and foreign companies. 

More questions?

Contact us at any time for your accounting or auditing questions in Hong Kong!

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