Implementation of Hong Kong Accounting Standards 39 and 32

Our Ref:

B1/7C

3 June 2004

The Chief Executive
All locally incorporated AIs

Dear Sir / Madam,

Implementation of Hong Kong Accounting Standards 39 and 32

We are writing to inform you that the Hong Kong Society of Accountants (HKSA) has recently issued two Hong Kong Accounting Standards (HKAS), HKAS 39 Financial Instruments: Recognition and Measurement and HKAS 32 Financial Instruments: Disclosure and Presentation. These two standards are modelled closely on International Accounting Standards 39 and 32 issued by the International Accounting Standards Board. They are to be applied prospectively for accounting periods beginning on or after 1 January 2005 with earlier application prohibited. The two standards are now available on the HKSA website¹.

In view of the tight implementation timing, AIs are strongly encouraged to give priority to implementation work in this area and to escalate support from management level to set aside adequate resources. AIs are requested to keep the HKMA informed of the progress on their implementation action plans through the regular communication channels.

Yours faithfully,

Simon Topping
Executive Director (Banking Policy)

¹http://www.hksa.org.hk/professionaltechnical/accounting/standards/

c.c.

The Chairman, Hong Kong Association of Banks
The Chairman, The Deposit-taking Companies Association
The President, Hong Kong Society of Accountants