HKFRS News 

In this newsletter, we look at the following topics:
  
HKAS 32 from the issuer's perspective (Part III)
 
This is the final instalment in a series of three supplements on HKAS 32 Financial Instruments: Presentation.  In our previous supplements on HKAS 32, we highlighted some of the more common financial instruments terms and conditions and explain how they affect the classification of an instrument.  This edition, however, will look at the linkage of two or more contracts, reclassification between liabilities and equity, and the separation of a compound instrument into its components, among other issues.
  
IFRIC 13 Accounting for Customer Loyalty Programmes
  
Customer loyalty programmes are widespread: retailers, airlines, hotels, telecoms operators and similar businesses are all offering incentives to gain customer loyalty.  There seems to be almost as many different accounting treatments as there are programmes.  IFRIC 13 Customer Loyalty Programmes, was published to create consistency in accounting for customer loyalty plans.  The interpretation is applicable to all entities that grant awards as part of a sales transaction (including awards that can be redeemed for goods or services not supplied by the entity).  HK(IFRIC) Interpretation 13 Customer Loyalty Programmes is expected to be published by the Hong Kong Institute of Certified Public Accountants in due course.  This edition addresses the major impact of IFRIC 13.

Note: HKFRS has converged with IFRS effective from 1 January 2005.  Contents contained in this newsletter are relevant to both HKFRS preparers and IFRS preparers.