Version 26 - August 2026 (CUD release)
Content update information
This document provides confirmation to our stakeholders that Hong Kong Corporate Template contains Illustrative Model Content with legislative coverage for (Annual) Year End Reporting.
- Financial period type: 12-Months (annual)
- Target industry type: Manufacturing, Services, and Generic (excluding Financial Services)
Legislative changes for the December 2026 financial year
The following IFRS legislative changes are relevant for the upcoming December 2026 financial year:
- Classification and Measurement of Financial Instruments - Amendments to IFRS 9 and IFRS 7
- Contracts Referencing Nature-dependent Electricity - Amendments to IFRS 9 and IFRS 7
- IFRS 18 - Presentation and Disclosure in Financial Statements
- IFRS 19 - Subsidiaries without Public Accountability: Disclosures
- Translation to a Hyperinflationary Presentation Currency - Amendments to IAS 21
- Disclosures about Uncertainties in the Financial Statements
- Sale or Contribution of Assets between an Investor and its Associate or Joint Venture - Amendments to IFRS 10 and IAS 28
- IFRS Practice Statement 1: Management Commentary (Revised)
- IFRS 20 - Regulatory Assets and Regulatory Liabilities
- Amendments to the Fair Value Option for Investments in Associates and Joint Ventures in IAS 28
- Annual Improvements to IFRS Accounting Standards - Volume 11
Early adoption availability
Classification and Measurement of Financial Instruments - Amendments to IFRS 9 and IFRS 7
The amendments are effective for annual reporting periods beginning on or after 1 January 2026. Entities can early adopt the amendments that relate to the classification of financial assets plus the related disclosures and apply the other amendments later.
The new requirements will be applied retrospectively with an adjustment to opening retained earnings. Prior periods are not required to be restated and can only be restated without using hindsight. An entity is required to disclose information about financial assets that change their measurement category due to the amendments.
Contracts Referencing Nature-dependent Electricity - Amendments to IFRS 9 and IFRS 7
Effective for annual periods beginning on or after 1 January 2026. The amendments relating to the own-use exception must be applied retrospectively. An entity is not required to restate prior periods, and it is only permitted to do so if this can be done without using hindsight.
The hedge accounting amendments must be applied prospectively to new hedging relationships designated on or after the date of initial application.
The IFRS 7 disclosure amendments must be applied when the IFRS 9 amendments are applied. If an entity does not restate comparative information, then the entity must not present comparative disclosures.
IFRS 18 - Presentation and Disclosure in Financial Statements
Effective for annual periods beginning on or after 1 January 2027. IFRS 18, and the consequential amendments to the other accounting standards, is effective for reporting periods beginning on or after 1 January 2027 and must be applied retrospectively. Early adoption is permitted and must be disclosed.
IFRS 19 - Subsidiaries without Public Accountability: Disclosures
Effective for annual periods beginning on or after 1 January 2027. IFRS 19 is effective for reporting periods beginning on or after 1 January 2027 and earlier adoption is permitted.
If an eligible entity chooses to apply the standard earlier, it is required to disclose that fact. An entity is required, during the first period (annual and interim) in which it applies the standard, to align the disclosures in the comparative period with the disclosures included in the current period under IFRS 19, unless IFRS 19 or another IFRS accounting standard permits or requires otherwise.
Translation to a Hyperinflationary Presentation Currency - Amendments to IAS 21
Effective for annual periods beginning on or after 1 January 2027. The amendments apply for annual reporting periods beginning on or after 1 January 2027 and earlier application is permitted.
If an entity's functional currency and presentation currency are the currency of a hyperinflationary economy (or are the currencies of different hyperinflationary economies) and it translates the results and financial position of foreign operations whose functional currency is that of a non hyperinflationary economy, then it is required to apply the amendments from the beginning of the annual reporting period in which it first applies the amendments. In addition, it restates the comparative amounts of its foreign operations included in the entity's previously issued financial statements by applying the general price index it applies to corresponding figures in accordance with paragraph 34 of IAS 29.
Disclosures about Uncertainties in the Financial Statements
Entities are entitled to sufficient time to implement any changes as a result of the illustrative examples. The examples do not have an effective date or transition requirements.
The topics addressed in the examples include the following topics: Materiality judgements, Assumptions: specific requirements about impairment testing, Assumptions: general requirements, Credit risk, Decommissioning and site restoration provisions, Disclosure of disaggregated information in the notes.
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture - Amendments to IFRS 10 and IAS 28
In December 2015, the IASB decided to defer the effective date of the amendments until such time as it has finalized any amendments that result from its research project on the equity method. Early application of the amendments is still permitted and must be disclosed. The amendments must be applied prospectively.
IFRS Practice Statement 1: Management Commentary (Revised)
Companies are permitted to apply the revised guidance in the Practice Statement (revised PS) to financial statements prepared any time after 23 June 2025. The revised PS is not an IFRS accounting standard, and an entity can prepare IFRS compliant financial statements without preparing management commentary that complies with the revised PS.
IFRS 20 - Regulatory Assets and Regulatory Liabilities
On 27 May 2026, the Board issued IFRS 20 Regulatory Assets and Regulatory Liabilities. IFRS 20 sets out the requirements for the recognition, measurement, presentation and disclosure of regulatory assets, regulatory liabilities, regulatory income and regulatory expense.
IFRS 20, and the consequential amendments to the other accounting standards, is effective for reporting periods beginning on or after 1 January 2029 and is applied either retrospectively in accordance with IAS 8 or using the modified retrospective approach which includes certain transition reliefs from the application of IAS 8. Early adoption is permitted and has to be disclosed.
Amendments to the Fair Value Option for Investments in Associates and Joint Ventures in IAS 28
The amendments are applied when an entity first applies IFRS 18. If an entity elects to apply IFRS 18 for an earlier period, the amendments are applied consistently with that early application. However, if IFRS 18 is applied early for a period beginning before the issuance of the amendments, entities apply the amendments for the first reporting period ending on or after their issuance.
The amendments are applied retrospectively. Furthermore, an entity applying paragraph 11 of IAS 27 Separate Financial Statements is required to make the same change in its separate financial statements.
Annual Improvements to IFRS Accounting Standards - Volume 11
The IASB's annual improvements process deals with non-urgent, but necessary, clarifications and amendments to IFRS. In July 2024, the IASB issued Annual Improvements to IFRS Accounting Standards - Volume 11.
Annual Improvements to IFRS Accounting Standards - Volume 11
IFRS 1 First-time Adoption of International Financial Reporting Standards
Hedge Accounting by a First-time Adopter
Paragraphs B5 and B6 of IFRS 1 have been amended to include cross references to the qualifying criteria for hedge accounting in paragraph 6.4.1(a), (b) and (c) of IFRS 9. These amendments are intended to address potential confusion arising from an inconsistency between the wording in IFRS 1 and the requirements for hedge accounting in IFRS 9.
An entity applies the amendments for annual reporting periods beginning on or after 1 January 2026. Earlier application is permitted.
IFRS 7 Financial Instruments: Disclosures
Gain or Loss on Derecognition
The amendments update the language on unobservable inputs in paragraph B38 of IFRS 7 and include a cross reference to paragraphs 72 and 73 of IFRS 13 Fair Value Measurement.
An entity applies the amendments for annual reporting periods beginning on or after 1 January 2026. Earlier application is permitted.
Guidance on implementing IFRS 7 Financial Instruments: Disclosures
Introduction
The amendments to paragraph IG1 of the Guidance on implementing IFRS 7 clarify that the guidance does not necessarily illustrate all the requirements in the referenced paragraphs of IFRS 7, nor does it create additional requirements.
Disclosure of Deferred Difference between Fair Value and Transaction Price
Paragraph IG14 of the Guidance on implementing IFRS 7 has been amended mainly to make the wording consistent with the requirements in paragraph 28 of IFRS 7 and with the concepts and terminology used in IFRS 9 and IFRS 13.
Credit Risk Disclosures
Paragraph IG20B of the Guidance on implementing IFRS 7 has been amended to simplify the explanation of which aspects of the IFRS requirements are not illustrated in the example.
IFRS 9 Financial Instruments
Lessee Derecognition of Lease Liabilities
Paragraph 2.1 of IFRS 9 has been amended to clarify that, when a lessee has determined that a lease liability has been extinguished in accordance with IFRS 9, the lessee is required to apply paragraph 3.3.3 and recognise any resulting gain or loss in profit or loss. However, the amendment does not address how a lessee distinguishes between a lease modification as defined in IFRS 16 and an extinguishment of a lease liability in accordance with IFRS 9.
An entity applies the amendments for annual reporting periods beginning on or after 1 January 2026. Earlier application is permitted.
Transaction Price
Paragraph 5.1.3 of IFRS 9 has been amended to replace the reference to 'transaction price as defined by IFRS 15 Revenue from Contracts with Customers' with 'the amount determined by applying IFRS 15'. The use of the term 'transaction price' in relation to IFRS 15 was potentially confusing and so it has been removed. The term was also deleted from Appendix A of IFRS 9.
An entity applies the amendments for annual reporting periods beginning on or after 1 January 2026. Earlier application is permitted.
IFRS 10 Consolidated Financial Statements
Determination of a 'De Facto Agent'
Paragraph B74 of IFRS 10 has been amended to clarify that the relationship described in paragraph B74 is just one example of various relationships that might exist between the investor and other parties acting as de facto agents of the investor. The amendments are intended to remove the inconsistency with the requirement in paragraph B73 for an entity to use judgement to determine whether other parties are acting as de facto agents.
An entity applies the amendments for annual reporting periods beginning on or after 1 January 2026. Earlier application is permitted.
IAS 7 Statement of Cash Flows
Cost Method
Paragraph 37 of IAS 7 has been amended to replace the term 'cost method' with 'at cost', following the prior deletion of the definition of 'cost method'.
An entity applies the amendments for annual reporting periods beginning on or after 1 January 2026. Earlier application is permitted.
New pronouncements issued as at 30 June 2026
Table of mandatory application
New pronouncement | Effective date | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Classification and Measurement of Financial Instruments - Amendments to IFRS 9 and IFRS 7 | 1 Jan 2026 | 2027 | 2027 | 2027 | 2027 | 2027 | 2027 | 2027 | 2027 | 2027 | 2027 | 2027 | 2026 |
Annual Improvements to IFRS Accounting Standards - Volume 11 | 1 Jan 2026 | 2027 | 2027 | 2027 | 2027 | 2027 | 2027 | 2027 | 2027 | 2027 | 2027 | 2027 | 2026 |
Contracts Referencing Nature-dependent Electricity - Amendments to IFRS 9 and IFRS 7 | 1 Jan 2026 | 2027 | 2027 | 2027 | 2027 | 2027 | 2027 | 2027 | 2027 | 2027 | 2027 | 2027 | 2026 |
IFRS 18 - Presentation and Disclosure in Financial Statements | 1 Jan 2027 | 2028 | 2028 | 2028 | 2028 | 2028 | 2028 | 2028 | 2028 | 2028 | 2028 | 2028 | 2027 |
IFRS 19 - Subsidiaries without Public Accountability: Disclosures | 1 Jan 2027 | 2028 | 2028 | 2028 | 2028 | 2028 | 2028 | 2028 | 2028 | 2028 | 2028 | 2028 | 2027 |
Translation to a Hyperinflationary Presentation Currency - Amendments to IAS 21 | 1 Jan 2027 | 2028 | 2028 | 2028 | 2028 | 2028 | 2028 | 2028 | 2028 | 2028 | 2028 | 2028 | 2027 |
IFRS 20 - Regulatory Assets and Regulatory Liabilities | 1 Jan 2029 | 2030 | 2030 | 2030 | 2030 | 2030 | 2030 | 2030 | 2030 | 2030 | 2030 | 2030 | 2029 |
Amendments to Illustrative Examples on IFRS 7, IFRS 18, IAS 1, IAS 8, IAS 36 and IAS 37 | Note 1 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture - Amendments to IFRS 10 and IAS 28 | Note 2 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Amendments to the Fair Value Option for Investments in Associates and Joint Ventures in IAS 28 | Note 3 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
* Effective for annual periods beginning on or after this date.
** Assuming that an entity has not early adopted the pronouncement according to specific provisions in the standard, interpretation, or amendment.
- The examples do not have an effective date or transition requirements. Entities are entitled to sufficient time to implement any changes as a result of illustrative examples.
- In December 2015, the IASB postponed the effective date of this amendment indefinitely pending the outcome of its research project on the equity method of accounting.
- The amendments are applied when an entity first applies IFRS 18. If IFRS 18 is applied early for a period beginning before the issuance of the amendments, entities apply the amendments from the beginning of the first reporting period starting on or after their issuance.
note
- This overview covers for year-end reporting until 31 December 2026. Therefore also pronouncements with effective date 1 January 2026 are included as these shall be applied for the first time for financial years ended at e.g. 31 January 2026.
- If the "first time applied in annual periods ending on the last day of the month" is December 2026, this means that a Company with a year ending 31 December 2026 would apply this standard for the annual period ending 31 December 2026, i.e. applicable for the reporting period from 1 January 2026 until 31 December 2026.
Local country specific changes above IFRS based on local GAAP
All standard names should be updated from 'IFRS' and 'IAS' to 'HKFRS' and 'HKAS', respectively.
The following changes have not been adopted in Hong Kong. Hence these should not be included in local updates.
- IFRS Practice Statement 1 Management Commentary
- IFRS 20 - Regulatory Assets and Regulatory Liabilities
- Amendments to the Fair Value Option for Investments in Associates and Joint Ventures in IAS 28
Additional local GAAP updates
Hong Kong Interpretation 5 Presentation of Financial Statements – Classification by the Borrower of a Term Loan that Contains a Repayment on Demand Clause (amendments)
Following the issuance of HKFRS 18, the references in HK Int 5 have been updated to reflect the requirements in HKFRS 18. HK Int 5 has incorporated the references to HKFRS 18 which is effective for annual reporting periods beginning on or after 1 January 2027.
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