What do a Hong Kong company's annual financial statements include?

The Companies Ordinance (Cap. 622) sets the framework; the accounting standard fills in the line items.

Legal requirements

• The statements must give a true and fair view of the financial position at year end and of the financial performance for the year, unless the company falls within the reporting exemption (s.380).
• They must follow Schedule 4 of the Ordinance and the applicable accounting standards (s.380(3)-(4)).
• The notes must disclose directors' emoluments, retirement benefits, termination payments, loans and similar dealings with directors, and directors' material interests in contracts (s.383), subject to relief for companies using simplified reporting.
• The statement of financial position must be approved and signed (s.387).

Components by standard

• HKFRS for Private Entities (s.3.17): a statement of financial position; a single statement of comprehensive income, or a separate income statement plus a statement of comprehensive income; a statement of changes in equity; a statement of cash flows; and notes with a summary of significant accounting policies.
• SME-FRS (companies in the reporting exemption using the SME-FRF): the cash flow statement is optional, and changes in equity can be shown in the notes or as a separate statement. HKICPA notes that SME-FRS statements do not give a true and fair view.

The directors' report and the auditor's report are separate documents that travel with the statements.