Who can use HKFRS for Private Entities in Hong Kong?
Any entity without public accountability that publishes general purpose financial statements, with no size test. It excludes publicly traded entities and financial institutions such as banks, insurers and securities brokers. A subsidiary of a full-HKFRS group can use it if the subsidiary itself has no public accountability.
HKICPA's FAQ sets out the key points:
- Core test: the entity must not be publicly accountable. Public accountability arises if its debt or equity is traded in a public market, or if it holds assets for a broad group of outsiders as a primary business.
- Excluded: publicly traded entities of any size, and financial institutions: banks, insurers, securities brokers or dealers, pension funds, mutual funds and investment banks.
- Not automatically excluded: companies limited by guarantee, unlimited companies, and not-for-profit organisations. Each depends on its facts. Company status under the Ordinance is not the only test.
- Holding client money incidentally to the main business does not by itself create public accountability. The FAQ gives solicitor firms and charities as examples.
- Subsidiaries: a subsidiary of a group reporting under HKFRS or IFRS may use the standard if it has no public accountability itself.
- No shareholder approval is needed to adopt it, according to the FAQ.
Unlike the SME-FRF, there is no size or company-type threshold. HKICPA revises the standard from time to time, so use the edition in force for your financial year.
Sources
Applies to 2026 · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- Is a Hong Kong company legally required to keep accounting records?Yes. Section 373 of the Companies Ordinance (Cap. 622) requires every company to keep accounting records that explain its transactions and show its financial position and performance at any time. Directors who fail to take all reasonable steps risk a fine of HK$300,000, and up to 12 months' jail if the failure is wilful.
- How long must a Hong Kong company keep its accounting records?Seven years. Under section 377 of the Companies Ordinance, a company must keep its accounting records for 7 years after the end of the financial year to which the last entry relates. The Inland Revenue Department separately requires business records to be kept at least 7 years after the transactions they relate to.
- What does section 51C of the Inland Revenue Ordinance require from my business?Anyone carrying on a trade, profession or business in Hong Kong must keep enough records, in English or Chinese, to work out assessable profits, and keep them for at least 7 years. Failing to do so without reasonable excuse can lead to a fine of up to HK$100,000.
- Which documents should a Hong Kong business keep for its books?Keep every document that supports an entry in your books: sales and purchase invoices, receipts, bank statements, contracts, payroll and MPF records, asset purchase papers, loan agreements, and stocktake sheets. The test is whether someone else could trace any figure back to its source.
- Can a Hong Kong company keep its accounting records digitally or scan paper originals?Yes. The Companies Ordinance allows records in hard copy or electronic form, provided they stay available for reference and can be reproduced on paper. The IRD also accepts electronic books and scanned source documents if integrity, legibility and origin details are preserved, and no prior approval is needed.