Guidance on Disclosure of Directors’ remuneration

The Financial Reporting Standards Committee revised Accounting Bulletin 3 (“AB3”) “Guidance on Disclosure or Directors’ Remuneration” in November 2017 and it supersedes AB3 issued in January 2000.

The AB3 provides general reference on the requirements of Section 383 of the Hong Kong Companies Ordinance Cap. 622 (“CO”) and Cap. 622G (the “Regulation”) with respect to the disclosure of directors’ remuneration in notes to the financial statements of a company incorporated in Hong Kong.

The major addition of disclosure in the notes to the financial statements is the consideration provided to or receivable by third parties for making available the services of persons as directors.

Section 7 of the Regulation requires separate disclosure of the aggregate amount of the consideration provided to or receivable by any third party, whether in cash or otherwise, for making available the qualifying services of a person who is a director of a company.

According to Section 7(3), the reference to 'third party' in this section is a reference to any person other than:

(a) the director;
(b) a connected entity of the director;
(c) the company; or
(d) a subsidiary undertaking of the company.

'Qualifying services' are defined in Section 3(1) as:
(a) services as a director of the company concerned; or;
(b) while a director of the company concerned, services as:
(i)    a director of a subsidiary undertaking of the company concerned; or
(ii)   other services in connection with the management of the affairs of the company concerned or its subsidiary undertaking.