ESG Reporting

Financial Reporting

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CPA, FCCA, CIA, CISA, CTA (HK)
Ricky is responsible for Risk Management Advisory and Environment, Social and Governance (ESG) advisory services in AVISTA.
Ricky has 20 years of experience in the fields of accounting, auditing, taxation, asset management, corporate finance and risk management. He has advised pre-IPO and listed clients in various industries, including property, financial services, TMT, manufacturing and licensed corporation, etc. Before joining AVISTA, Ricky had worked in Cheung Kong (Holdings) Limited, Ernst &amp; Young and KPMG in Hong Kong for few years.
Ricky has been invited to speak for the seminars and training of professional institutions such as, HKICPA, HKICS, HKiNEDA as well as those of various listed companies and professional training centers to share his valuable experiences in areas, including listing, risk management, internal control and ESG.

RICKY HO

Director

CPA, ACS, CTA(HK), CIA
Joey has profound experience in enterprise risk management, internal controls, financial due diligence and external audit.
Joey has more than 10 years’ experience in handling assignments of initial public offerings, resumption of trading and merger and acquisition exercises for listed companies. She has extensive experience in different industries including manufacturing and trading, property development and investment, financial services, money lending and provision of educational services.
Before joining AVISTA, Joey had worked for professional advisory firms and accounting firm with extensive experiences in providing accounting, auditing, risk advisory services for HK IPO listing companies and listed companies.

JOEY LEONG

Principal

CPA, CIA
Andrea has over 10 years experiences in the fields of corporate governance, due diligence, business consulting, risk management and internal control review. She has served clients in a range of industries, including garment and textile, licensed corporation, property, construction, automotive, pawn loan, travel and tourism, logistics, mining, energy, TMT, financial services, catering, healthcare, beauty and wastewater treatment etc.
Before joining AVISTA, Andrea had worked for professional advisory firms, accounting firm and multinational corporation with extensive experiences in providing accounting, auditing, risk advisory services for HK IPO listing companies and listed companies.

ANDREA KWAN

Newly-Released ESG Guide Consultation Conclusions and ESG Disclosure Review by HKEX

The International Accounting Standards Board (“IASB”) has published the Discussion Paper Business Combinations—Disclosures, Goodwill and Impairment in March 2020 (the “Discussion Paper”). The Discussion Paper considers four major topics, including (1) improving disclosures about acquisitions, (2) improving effectiveness of impairment test, (3) simplifying the impairment test, and (4) changing the range of recognisable intangible assets. As an experienced valuation and financial advisory firm, AVISTA has outlined the key points in the Discussion Paper and potential impacts to valuation and corporate transactions.
 
Improving disclosures about acquisitions
 
In response to some investors’ concern on not having sufficient information for understanding the subsequent performance of an acquisition and achievement of the management’s objectives for the acquisition, the IASB believes that companies should disclose the strategic rationale and management’s objective for undertaking an acquisition, and the metrics for monitoring achievement of objectives at acquisition date. Subsequent to the acquisition date, disclosure regarding the information and metrics used by the management to monitor and measure the progress of objectives achievement should be required. The metrics to be disclosed could be financial (e.g. profitability) and/or non-financial (e.g. product launches).
 
Another suggested additional disclosure is the factors making up goodwill, such as nature, amount, and timing of, and related costs required for the synergies expected to be realised. The company is required to provide qualitative description of factors that make up the goodwill recognised and to quantify an estimate of expected synergies in determining and agreeing the acquisition price.
 
Improving effectiveness of impairment test
 
Under the current IAS 36 — Impairment of Assets requirement, companies have to test cash-generating units containing goodwill for impairment at least annually. The Discussion Paper has examined (1) ways to improve the effectiveness of impairment test at a reasonable cost; and (2) whether to reintroduce amortisation of goodwill.
 
Regarding the improvement on the effectiveness of impairment test at a reasonable cost, the Discussion Paper has preliminary concluded that it is not feasible to design a significantly more effective impairment test than the currently adopted one as required in IAS 36 — Impairment of Assets.
 
In the context of reintroducing amortisation of goodwill, the views among IASB members are controversial, with majority of them voting in favour of retaining the impairment-only model and not reintroducing amortisation of goodwill, as the determination of useful life of goodwill would be arbitrary and amortisation of goodwill could not be an effective measure of management’s accountability for acquisition decisions.
 
Simplifying the impairment test 
 
There are three reliefs proposed by the IASB to simplify the impairment test, including (1) removing the requirements for a company to perform annual impairment assessment for cash-generating units containing goodwill if there is no impairment indication, intangible assets with indefinite useful lives and intangible assets not yet available for use; (2) removing the restriction on including uncommitted restructuring and asset enhancement cash flows; and (3) removing the requirement to use pre-tax cash flows and pre-tax discount rates in estimating value in use.
 
The IASB is in the preliminary view that these measures could reduce the cost and complexity for performing impairment test.
 
Changing the range of recognisable intangible assets
 
The Discussion Paper has examined whether some intangible assets could be included in goodwill to reduce costs and complexity for companies in identifying and valuing particular intangible assets. Having considered varying views from stakeholders on this topic, the IASB concluded that there is no compelling evidence suggesting that a change in the range of recognisable intangible assets is favourable.
 
To read the full Discussion Paper released by IASB, please click <a href="https://cdn.ifrs.org/-/media/project/goodwill-and-impairment/goodwill-and-impairment-dp-march-2020.pdf">here</a>.
 
 
AVISTA’s Professional Services for Valuation and Corporate Transactions
 
AVISTA provides one-stop valuation and financial advisory services that help clients achieve additional growth and ensure their compliance with regulators’ stringent rules and disclosure requirements when implementing business decisions and strategies. 
 
<ul>
<li>Valuation Services for Transactions</li>
<li>Valuation Services for Financial Reporting</li>
</ul>
 
We are closely following up on the latest development of this accounting standard update. For further information or enquiry regarding the potential valuation impact of the Discussion Paper to you, please feel free to contact us.

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IASB Discussion Paper on  Business Combinations — Disclosures, Goodwill and Impairment

The Hong Kong SAR government has recently released a new round of economic data, predicting that Hong Kong's Gross Domestic Product (GDP) will contract by 3% in the Q4 of 2019 and contract by 1.3% for the whole year, and lowering Hong Kong's GDP growth forecast for 2020 to 0.7%.
 
It can be seen that there is an uncertainty in Hong Kong's economic prospects and hence some investors have stepped up their efforts to transfer funds to other countries and regions, including Southeast Asian countries. These countries are the members of the Belt and Road Initiative (BRI) that China has been actively promoting since 2013. With the continuous implementation of the BRI, China and Southeast Asian countries have developed much closer business relationships and trade ties.
 
In view of that, AVISTA has selected a number of the Belt and Road countries, mainly those in Southeast Asia, and conducted a comprehensive analysis of their real estate market.
 
The first country that we are looking at would be … Malaysia.
 
Please <a href="../../../../../uploads/Malaysia_belt_and_road_initiative_aba68f497d.pdf" target="_blank" rel="noopener">click here</a> to read the full report (available in Chinese version only).
 
<a href="../../../../../uploads/Malaysia_belt_and_road_initiative_aba68f497d.pdf" target="_blank" rel="noopener"><img src="../../../../../uploads/thumbnail_9d5a6ef6e3.png" alt="" width="630" height="888" /></a>

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AVISTA Insight – Belt and Road Series: Malaysia

The Hong Kong Stock Exchange (the “HKEx”) has issued a consultation paper on “Review of the Environmental, Social and Governance (“ESG”) Reporting Guide (the “Guide”) and Related Listing Rules” (“Listing Rules”) (“the consultation paper"). This is the second consultation on the revision of the Guide conducted by the HKEx since the launch of the Guide in 2013. The HKEx has proposed to implement the revised “Listing Rules” and the “Guide” for the fiscal year beginning on or after January 1, 2020. In other words, issuers are required to publish ESG Reports according to the revised Guide starting from 2021.
 
Based on our extensive experience ESG advisory, AVISTA Risk Advisory has summarized the major revisions in this consultation with comparisons of previous guides.
 
Please <a href="../../../../../uploads/ESG_Guidance_Update_98ad3951d1.pdf" target="_blank" rel="noopener">click here</a> to read the full summary.
 
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