My name is Steve Chen, FCCA and course director at APC teaching ACCA courses.

Have you heard of 'HUARONG Debacle' recently? HUARONG is a company in mainland China set up in about 20 years ago and the aim of the company was to buy 'bad debts' from commercial banks. 20 Years ago, there is a revolution in China to boost economy, at that time, in order for commercial banks such as INDUSTRIAL AND COMMERCIAL BANK OF CHINA to be listed on the stock exchange, bad debts should be reduced or removed and therefore, HUARONG was created to buy these bad debts enabling these commercial banks to be successfully listed.

Recently and interestingly, HUARONG decided to postpone to disclose its annual accounts, in other words, not meeting with timeliness according to conceptual framework requirement. In the past, a commercial bank called 'BAOSHANG BANK' in China was also doing the same thing, to delay in disclosing its accounts and later on, it was announced to go bankrupt because it could not repay its debts.

As we can see, the market is uncertain about HUARONG at all and the price of its issued debt has significantly decreased in the overseas market.

Timeliness in conceptual framework is an enhancing qualitative characterstic and companies following this requirement would give confidence to investors.

This is also an important topic in ACCA FA/FR and especially, SBR course.

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