Accounting standards under discussion

The Professional Accountants Committee (CPC) has launched a public consultation on revising the territory’s accounting standards to align with the latest International Financial Reporting Standards (IFRS).

The proposed changes aim to update Macau’s standards, replacing the full set of IFRS 2015 standards with the full 2021 version, while maintaining the existing General Financial Reporting Standards for small and medium-sized enterprises.

The consultation period, which runs from July 17 to August 30, 2024, invites feedback from the accounting industry, related organizations and the public.

The new standards are scheduled to take effect from January 1, 2026, giving businesses ample time to prepare.

As one of China’s two Special Administrative Regions, Macau has its own legal system, including a framework for developing accounting standards.

The CPC is the sole regulatory body of the accounting profession in Macau, with powers that include issuing CPA licenses, setting ethics codes, and supervising CPA practices.

Updating Macau’s accounting standards is crucial as the territory’s economy continues to evolve.

Aligning with the latest IFRS framework will ensure Macau’s financial reporting is on par with international norms and supports the region’s development.

The principles-based framework of IFRS encourages companies to adopt best practices and reduces the risk of manipulation, ensuring financial statements accurately reflect a company’s financial situation.

The Big 4 auditing firms (Deloitte, EY, KPMG, and PwC) use IFRS as a global standard.

By aligning with IFRS, companies in Macau can benefit from consistent and reliable auditing procedures that enhance the credibility of their financial statements and are recognized globally.

The proposed changes and the consultation period provide an opportunity for stakeholders to give feedback and ensure the revised standards meet the needs of Macau’s businesses and investors. Nadia Shaw