In October 2025, following extensive communication and evaluation between the Ministry of Finance and the Hong Kong Institute of Certified Public Accountants, the accounting standards-setting body of the Hong Kong, the two sides confirmed that interpretations No. 18 and No. 19 (Exposure Draft) for Accounting Standards for Business Enterprises, issued by the Chinese Mainland over the past year, continue to converge with the Hong Kong Financial Reporting Standards, which directly adopt the International Financial Reporting Standards.

In 2007, the Chinese Mainland and Hong Kong achieved mutual recognition of equivalence in accounting standards, auditing standards, and audit regulation. Since then, the two sides have maintained timely annual exchanges on the development of accounting standards and progress in international convergence, and reaffirmed the continuous convergence between the mainland’s Accounting Standards for Business Enterprises and the Hong Kong Financial Reporting Standards, which effectively support the building of a new system for a higher-standard open economy in China.

On the one hand, such convergence helps reduce the financing costs of mainland enterprises seeking listings in Hong Kong. At present, mainland enterprises listed in Hong Kong may choose to prepare their financial statements in accordance with the mainland’s Accounting Standards for Business Enterprises and engage mainland accounting firms qualified for  auditing mainland enterprises listed in Hong Kong to issue audit reports. This eliminates the need to prepare two sets of financial statements and avoids hiring separate accounting firms in the mainland and Hong Kong, thereby significantly reducing financial reporting and auditing costs associated with listings in Hong Kong.

On the other hand, continuous convergence facilitates capital market connectivity. The alignment of accounting standards between the two sides creates a sound accounting environment for mainland enterprises “going global”, the smooth operation of the Shanghai–Hong Kong Stock Connect and Shenzhen–Hong Kong Stock Connect programs, and the connectivity of the bond markets of both sides. This not only provides convenience for mainland enterprises in expanding financing channels but also contributes to the prosperity and development of Hong Kong’s capital market.

Going forward, the Ministry of Finance will continue to strengthen communication and cooperation with the Hong Kong Institute of Certified Public Accountants, actively advancing efforts to ensure the continued convergence of accounting standards between the two sides, so as to promote their high-quality economic and social development and achieve mutual benefit and win-win results.