Proposal on eligibility for the use of SME-FRF-FRS

The Institute newly issued a consultation paper to recommend the size criteria for companies to prepare a simplified financial and directors' report using the SME-FRF-FRS. The recommended criteria are as follows:

(a) A small private company (except for those in banking, deposit-taking, insurance or stock-broking industry) should be automatically qualified if it satisfies any two of the following conditions:

(i) total revenue does not exceed HK$100 million

(ii) total assets does not exceed HK$100 million

(iii) the average number of employees does not exceed 100

(b) A private company that is the holding company of a group of small private companies can also be qualified provided that it satisfies any two of the following conditions:

(i) the group's total revenue does not exceed HK$100 million net

(ii) the group's total assets does not exceed HK$100 million net

(iii) the average number of employees of each company in the group does not exceed 100

The above recommendations have not yet formally adopted. The Institute will submit their final recommendations to the Companies Bill team and the Bills Committee of the Legislative Council for their consideration.

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