Close & reporting
IFRS conversion
Books converted between HKFRS, full IFRS and another jurisdiction's local GAAP, for a Hong Kong company reporting to an overseas parent, investor or standard-setter that does not use Hong Kong's own framework. Finbryn prepares the conversion and the memo behind it; the statutory audit stays with your practising Hong Kong CPA.
Management report
Illustrative client · August 2026
HKD
| Line | Aug | Jul | |
|---|---|---|---|
| Revenue | 142,380 | 131,904 | +10,476 |
| Cost of sales | (51,260) | (48,115) | (3,145) |
| Gross profit | 91,120 | 83,789 | +7,331 |
| Payroll | (46,300) | (45,900) | (400) |
| SoftwareNoted | (6,480) | (5,490) | (990) |
| Rent | (8,000) | (8,000) | 0 |
| Other operating | (9,215) | (9,870) | +655 |
| Net income | 21,125 | 14,529 | +6,596 |
Reviewer's note
Software is up on last month after two seats were added mid-month. Revenue includes one milestone invoice that will not repeat next month.
Illustrative. An example of the document, not a client's figures.
Why Hong Kong companies still need a conversion
Hong Kong Financial Reporting Standards already track full IFRS closely, so a Hong Kong subsidiary reporting into a group that also uses IFRS or HKFRS usually needs little more than a mapping exercise. The real conversion work shows up when the parent, investor or lender sits in a market running a different local GAAP, such as US GAAP or mainland China's accounting standards, or when a company that has grown out of the small and medium-sized entity threshold needs to move off the simplified SME-FRF and onto full HKFRS.
What the conversion covers
A line-by-line reconciliation between the two frameworks' balances, adjustments for the areas where they diverge most, commonly revenue timing and lease accounting, and an opening balance sheet built on the target framework where the conversion counts as a first-time adoption.
A memo, not a black box
Every adjustment is documented in a conversion memo explaining its basis, so a practising Hong Kong CPA performing the annual statutory audit, or an overseas auditor reviewing group figures, can follow the reasoning rather than take the converted numbers on faith.
Where the audit sits
Finbryn prepares the converted books and the supporting memo. The Hong Kong statutory audit itself is performed and signed by an independent, practising Hong Kong CPA, and any overseas group audit sits with whichever firm the parent already uses.
Related work
Conversion work often runs alongside revenue recognition, lease accounting and consolidations once the target framework is settled.
Questions
Frequently asked questions: IFRS conversion
Does a Hong Kong company usually need a full IFRS conversion?
Not always. Hong Kong Financial Reporting Standards already track full IFRS closely, so many groups need only a mapping exercise rather than a ground-up conversion.
When does the conversion get more involved?
When the parent, investor or lender uses a different local GAAP, such as US GAAP or mainland China's accounting standards, or when a company outgrows the simplified SME-FRF framework and moves onto full HKFRS.
Do you sign off on the conversion as an auditor would?
No. We prepare the converted books and the memo behind them. The Hong Kong statutory audit is performed and signed by an independent, practising Hong Kong CPA.
What does the conversion memo actually contain?
A documented explanation of every adjustment made and its basis, so an auditor on either side of the conversion can follow the reasoning rather than take the numbers on faith.
What is the first step in an IFRS conversion project?
A gap analysis comparing your current accounting policies against HKFRS or full IFRS, identifying the specific standards, such as leases or revenue, where treatment actually differs before any historical figures ever get restated.
Why would a US business need IFRS books?
Usually because a foreign parent, investor or lender outside the United States requires IFRS reporting, or the business is preparing for a cross-border transaction.
Do you sign off on the IFRS conversion as an auditor would?
No. We prepare the converted books and the supporting memo; any attest or audit work sits with a qualified audit firm.
What software works with iFRS conversion?
IFRS conversion runs inside NetSuite or Sage Intacct, whichever you already use. If you are not yet set up in either, we can configure a file in your name so you keep ownership of it once the engagement is under way.
How do we get started with iFRS conversion?
Getting started with iFRS conversion begins with a short review of your current records and software access. Once that is done we confirm scope and timing in writing, and ongoing work begins on the schedule agreed with you.
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Next step
Talk to the team that would run your books
A short call covers your setup, your software and what a first month would look like. You get a written scope and price after it.