FIDAY, JUNE 21, 1974
NEW RULES ON COMPANY ACCOUNTS PROPOSED
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COMPANY DIRECTORS WILL BE REQUIRED TO GIVE MUCH FULLER INFORMATION ABOUT THEIR COMPANY AFFAIRS, UNDER DRAFT LEGIS- LATION PULLISHLD IN TODAY'S GAZETTE.
THIS IS PROVIDED FOR IN THE COMPANIES (AMENDMENT) BILL 1974 WHICH SEEKS TO GIVE EFFECT TO A NUMBER OF RECOMMENDATIONS IN THE SECOND REPORT OF THE COMPANIES LAV REVISION CUMIITTLE RELATING TO COMPANY ACCOUNTS AND DIRECTORS' REPORTS.
THE BILL DEALS ONLY WITH ACCOUNTANCY MATTERS OF GENERAL PRACTICAL BUSINESS APPLICATION AND AIMS AT BRINGING THE ACCOUNTS PROVISION GENERALLY INTO LINE WITH THOSE NOW IN FORCE IN THE UN1120 KINGDOM.
'IT PROVIDES THAT COMPANY BALANCE SHEETS AND PROFIT AND LOSS ACCOUNTS MUST GIVE A TRUE AND FAIR VIEW OF THE STATE OF THE COMPANY AND OF ITS PROFIT OR LOSS. PROVISION IS NADE FOR CERTAIN SMALL PRIVATE COMPANIES TO OPT OUT OF SOME OF THE NEV REQUIREMENTS. WHERE A COMPANY EXERCISES THIS OPTION, THE EXISTING REQUIREMENTS OF THE COMPANIES ORDINANCE WILL CONTINUE TO APPLY INSTEAD OF THÊ NEW REQUIREMENTS.
THE PROPOSED LEGISLATION ALSO REQUIRES A COMPANY HAVING SUBSIDIARIES TO PREPARE GROUP ACCOUNTS DEALING WITH THE STATE OF AFFAIRS AND PROFIT AID.LOSS OF THE COMPANY AID ITS SUBSIDIARIES.
THESE GROUP ACCOUNTS MUST GIVE +A TRUE AND FAIR VIEW+ OF THE STATE OF AFFAIRS AND PROFITS OR LOSS OF THE COMPANY AND THE SUBSIDIARIES AS A WHOLE.
ANOTHER FEATURE OF THE BILL IS THAT IT REQUIRES THE ATTACHMENT TO A COMPANY 'Š ^3.1LANCE SHEET OF A COMPREHENSIVE REPORT BY ITS DIRECTORS WITH RESPECT TO ITS PROFIT OR LOSS, THE STATE OF AFFALIS, ITS PRICIPAL ACTIVITIES, PRJPJJEJ DIVIDEND, TRANSPER TJ RESERVES, DONATIONS, CHANGES IN FIXED ASSETS, ISSUES OF SHARES AND DEBEITURES, ITS DIRECTORS, AKO ANY OTHER MATTERS MATERIAL FOR THE APPRECIATIJN BY ITS MOHJENS OF THE STATE OF LIS AFFAIRS.
THE BILL FULLOYS CONSULTATION WITH THE ACCOUNTANCY AND OTHER BODIES WHICH HAD EXPRESSED THE VIEW THAT HONG KONG SHOULD ADOPT THE BRITISH REJUIREMENTS AS TO ACCOUNTS, WHEREVER FEASIBLE.
THE HONG KONG SOCIETY OF ACCOUNTANTS AND LOCAL CHAMBERS OF COMMERCE WERE CONSULTED ON THE DRAFT LEGISLATIJN AND THEY SUPPORTAJ THE PROPOSALS.
THE BILL IS EXPECTED TO BE INTRODUCED IN THE LEGISLATIVE COUNCIL SHORTLY AND, IF ENACTED, WILL TAKE EFFECT FROM JANUARY 1, 1975.
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