Hong Kong Regulations

BANKING (DISCLOSURE) RULES - SECT 34

Principal accounting policies

(1) An authorized institution shall disclose the principal accounting policies
it uses in the preparation of its financial statements.

(2) Without prejudice to the generality of subsection (1), an authorized
institution shall disclose—

   (a)  the accounting policies, practices and methods it uses for credit risk
        exposures, in particular for loans and advances (including the
        measurement basis used for loans and advances at the time of their
        origination and at subsequent periods, and the recognition of interest
        income), and the determination of specific provisions, collective
        provisions and write-offs;

   (b)  the accounting treatment of loans and advances upon the repossession
        of assets where such loans and advances to which the repossession of
        assets relate are material;

   (c)  the accounting treatment of fees and expenses related to loans and
        advances (including whether any incentives relating to residential
        mortgage loans or other loans and advances have been written off or
        amortized) where the fees and expenses are material;

   (d)  the principal accounting policies used for derivative transactions and
        off-balance sheet exposures (including an explanation of the
        accounting practices and major assumptions used for valuation and
        income recognition); and

   (e)  the accounting policies used for offsetting assets and liabilities
        arising from derivative transactions.