個案總覽

This case explores the audit considerations in relation to revenue arising from the operations of a cryptocurrency trading platform. The protagonist is Global Token Limited (Global Token or the Group, stock code: 8192.HK), which commenced its "blockchain technology-related business" segment in FY2018. In the year of commencement, the independent auditors issued a "qualified opinion" on the "commission and service income" recognized from the cryptocurrency trading platform (crypto exchange or cryptocurrency exchanges). In the following year, the auditors issued the same opinion on the same subject matter for the same reasons. Eventually, Global Token resolved to cease all blockchain-related operations during FY2020 owing to the alleged cost pressure. The case seeks to highlight the audit considerations at the stage of client acceptance and continuance. Through the case, students will grapple with the practical questions of how to identify the "assertions" in question, suggest the possible "what can go wrong(s)" (WCGWs) within Global Token's operating procedures, as well as what substantive procedures auditors could perform to obtain assurance in light of the assertions.

This case explores the accounting treatment of cryptocurrencies that Huobi Technology Holdings Limited (Huobi Technology, stock code: 1611.HK) had classified as intangible assets. Huobi Technology operated a digital asset (cryptocurrency) trading platform and rendered technology solution services in relation to blockchain. Huobi Technology received a loan in both cash and cryptocurrencies from its parent company, Huobi Global Limited. The cryptocurrencies portion of this loan was recognized as intangible assets by Huobi Technology in its statement of financial position. Such accounting classification also had financial implications across statements of profit or loss and other comprehensive income, statement of cash flows, statement of changes in equity, among others. The case seeks to highlight the accounting standards governing recognition of intangible assets. Through the case, students will grapple with the practical questions of how to develop an accounting policy with regard to cryptocurrencies.

This case explores how the retail customers of the Bank of China lost an astounding RMB10bn (USD1.27bn) by investing in a structured product. The product, Crude Oil Treasure, was linked to West Texas Intermediate (WTI) futures. These crude oil futures were traded on the New York Mercantile Exchange and were used as a benchmark in oil pricing. The negative futures price of -USD37.63 per barrel on 20 April 2020 was a "black swan" event. Never before had the price of oil futures plunged into the negative. Through the case, students will grapple with the practical questions of how to identify the characteristics of a structured product by reference to the traits exhibited in a standard futures contract. Students will also be asked questions on finance theories about contango, extreme contango, backwardation, extreme backwardation, normal contango, and normal backwardation.

This case investigates the downfall of Ocean Park Corporation (Ocean Park or the park) from the perspective of financial statement analysis. Ocean Park's performance significantly declined from a surplus of HKD127.2mn in FY2013 to a severe deficit of HKD557.3mn in FY2019. This was mainly attributable to the shrinking revenue size and mounting difficulties in controlling the operating costs during this period. In 2020, Ocean Park was hard-hit by the coronavirus pandemic, which pushed it further to the verge of liquidation. After rounds of debates, the Hong Kong legislature eventually approved of a relief fund of HKD5.4bn in taxpayers' money. The case seeks to highlight the financial ratios and metrics commonly used in financial statement analysis, and their interpretations. It provides insights on Ocean Park's financial performance in terms of profitability, liquidity, solvency, and operational efficiency. Students will tackle practical questions regarding financial statement analysis of Ocean Park from FY 2013 to FY2019, and the financial impact of the relief fund by means of pro forma financial statements over the next few years.

This case explores the corporate finance issues arising from the suspension of HSBC Holdings plc's (HSBC, stock code: 5.HK) dividend payout in March 2020. Such abrupt change in pattern was immediately met with tremendous reverberation and discussion in the market. The case seeks to highlight the considerations of HSBC in deciding on a dividend policy, both from a corporate finance and behavioral finance perspective. Through the case, students will grapple with the practical questions of how a listed company should structure its dividend payout pattern. The pattern is structured in such a way to satisfy the operational and financial needs of itself while minimizing the negative impacts to shareholder relationships. There is a dilemma that a listed company's dividend policy, while constituting part of the current cost of capital, is a means to maintaining a stable share price and shareholder "clientele". As such, it is important for students to be aware when such dilemma arises, how to strike a healthy balance between satisfying the shareholders and adhering to Milton Friedman's "business of business is business" convention.

This case explores how Cathay Pacific, the world's eighth-largest carrier of international passengers, deals with the new accounting standard, namely, HKFRS 16 Leases (which superseded the prior HKAS 17) as mandated, effective 1 January 2019. For lessee accounting, the new standard adopts a singular right-of-use model that applies the same accounting treatment universally to all leases (with few exceptions), while the prior standard used a dual model that required distinct classification of operating and finance leases with different accounting treatments. Companies that enter lease arrangements to access assets are affected by the new lease standard in varying degrees. In particular, the airline industry-with heavy reliance on leases for aircrafts-is one of most affected in terms of financial metrics. The case seeks to highlight the discussion surrounding the implementation of the new standard. Students will tackle practical questions about the differences between HKFRS 16 and HKAS 17, and how the implementation of the new standard affects Cathay Pacific's financial position, performance, and disclosures in the financial statements.