### Inland Revenue Ordinance 《稅務條例》

18E. Change of accounting date and apportionments
(1) Where the assessable profits of a person from any trade, profession or business carried on in Hong Kong have been computed by reference to an account made up to a certain day in any year of assessment and either— (Amended 7 of 1986 s. 12)
(a) that person fails to make up an account to the corresponding day in the following year of assessment; or
(b) that person makes up accounts to more than one day in the following year of assessment,
then—
(i) the assessable profits from that source for the year of assessment in which the circumstances described in either paragraph (a) or (b) prevail shall be computed on such basis as the Commissioner thinks fit; and
(ii) the assessable profits for the year preceding that year of assessment shall be recomputed on such basis as the Commissioner thinks fit.
(2) For the purposes of subsection (1)—
(a) where the accounts of any trade, profession or business are made up to the end of the Lunar year, the Commissioner may accept those accounts as being made up to a corresponding day in each year of assessment; and
(b) in the case of a trade, profession or business which was commenced on or after 1 April 1974, the Commissioner may, if he considers it necessary, make a computation under subsection (1) in respect of a basis period which exceeds 12 months.
(3) For the purposes of this Part, where in the case of a trade, profession or business it is necessary in order to arrive at the assessable profits or the losses for any year of assessment to divide or apportion to specific periods the profits and losses for any period for which accounts have been made up, or to aggregate any such profits or losses or any apportioned parts thereof, it shall be lawful to make such division and apportionment or aggregation, and any such apportionment shall be made in proportion to the number of days or months in the respective periods unless the Commissioner, having regard to any special circumstances, otherwise directs.
(4) For the purposes of section 18D(2A), where in the case of a trade, profession or business it is necessary in order to arrive at the profits or losses for any period to divide or apportion to specific periods the profits and losses for any period for which accounts have been made up, or to aggregate any such profits or losses or any apportioned parts thereof, the Commissioner may make such division and apportionment or aggregation as he may deem proper in that case. (Added 34 of 1980 s. 3)
(Added 7 of 1975 s. 12)

### Inland Revenue Ordinance 《稅務條例》

18F. Adjustment of assessable profits
(1) The amount of assessable profits for any year of assessment of a person chargeable to tax under this Part shall be increased by the amount of any balancing charge directed to be made on that person under Part 6 and decreased by the allowances made to that person under Part 6 for that year of assessment to the extent to which the relevant assets are used in the production of the assessable profits.
(2) When in any year of assessment the amount of the allowances made under Part 6 to any person chargeable to tax under this Part exceeds the total amount of that person’s assessable profits, as increased by any balancing charge, the amount of such excess shall, for the purposes of section 19C, be deemed to be a loss of that person for that year of assessment.
(3) This section shall apply to the year of assessment commencing on 1 April 1975 and to subsequent years of assessment.
(Added 7 of 1975 s. 12. Amended E.R. 1 of 2012)

### Inland Revenue Ordinance 《稅務條例》

18G. Financial instrument: interpretation of this section and sections 18H, 18I, 18J, 18K and 18L
(1) In this section and sections 18H, 18I, 18J, 18K and 18L—
recognized (確認)—see subsection (2)(a);

specified financial reporting standard (指明財務報告準則)—
(a) unless paragraph (b) applies, means—
(i) the Hong Kong Financial Reporting Standard 9 (Financial Instruments) issued by the Hong Kong Institute of Certified Public Accountants, as in force from time to time;
(ii) the International Financial Reporting Standard 9 (Financial Instruments) issued by the International Accounting Standards Board, as in force from time to time; or
(iii) a financial reporting standard adopted by a relevant authority of a jurisdiction other than Hong Kong, as in force from time to time, which is, in the Commissioner’s opinion, equivalent to the standard referred to in subparagraph (ii); or
(b) in relation to a person for a year of assessment for which the person prepares financial statements in accordance with a standard referred to in paragraph (a)(i), (ii) or (iii), means that standard.

(2) If a person prepares financial statements for the basis period for a year of assessment in accordance with a specified financial reporting standard—
(a) recognized in this section or section 18H, 18I, 18J, 18K or 18L (other than section 18L(6)(c)), in relation to the person and the year, means recognized in accordance with the standard; and
(b) an expression used in this section or section 18H, 18I, 18J, 18K or 18L has the same meaning in relation to the person and the year as the expression has in the standard if the expression is—
(i) defined in the standard; and
(ii) not defined in this section or section 18H, 18I, 18J, 18K or 18L.
(Added 6 of 2019 s. 3)

18H. Financial instrument: application of sections 18I, 18J, 18K and 18L
(1) Sections 18I, 18J, 18K and 18L apply to a person for a year of assessment only if—
(a) the person prepares financial statements for the basis period for the year in accordance with a specified financial reporting standard; and
(b) the person has elected in writing that those sections apply to the person (election

### Inland Revenue Ordinance 《稅務條例》

18I. Financial instrument: effect of sections 18J, 18K and 18L on other Part 4 provisions
(1) This section applies in determining whether any profit, gain, loss, income or expense is chargeable to tax or allowable for deduction in relation to a person to whom this section applies under section 18H for a year of assessment.
(2) Sections 18J, 18K and 18L do not affect the operation of sections 17C and 17D.
(3) Subject to subsection (2), sections 18J, 18K and 18L apply despite any other Part 4 provisions to the extent that—
(a) those other provisions (regardless of how they are expressed) would otherwise limit the profit, gain, loss, income or expense chargeable to tax or allowable for deduction to that which is realized, received, receivable, accrued, paid, payable or incurred; or
(b) under those other provisions (regardless of how they are expressed), any profit, gain, loss, income or expense would otherwise be computed in a way different from that provided for in any of sections 18J, 18K and 18L (whether or not by having the profit, gain, loss, income or expense wholly or partly brought into account for a different year of assessment).
(4) Except as provided for in subsection (3), sections 18J and 18L apply subject to the other Part 4 provisions.
(5) In this section—
other Part 4 provisions (第4部其他條文) means provisions of this Part other than sections 18G, 18H, 18I, 18J, 18K and 18L.
(Added 6 of 2019 s. 3)