LSP Valuation Under the Subsidy Scheme

Valtech’s valuation team has recently completed a long service payment (“LSP”) valuation for a Hong Kong medical company.

With the Hong Kong government confirming the subsidy scheme, the detailed arrangement for the abolition of MPF offsetting mechanism is finalized. The 25-year subsidy scheme will cover part of the increase in LSP arising from the new legislation, helping the employers to gradually adapt to the new regulation. We foresee that the subsidy scheme can soon be considered in reporting future LSP provision for the upcoming fiscal year, lightening the LSP provision burden appearing on the balance sheet.

Valtech Valuation is highly experienced in LSP assessment and also alerts the recognition of the subsidy scheme. We have been actively studying the addition of the subsidy scheme in our internally developed programme to calculate LSP provisions. We also closely monitor the latest updates from HKICPA, in case they issue new guidance considering the subsidy scheme.

The subsidy scheme has further increased the complexity in LSP assessment. It is highly recommended to appoint a specialist to assist in these valuations. Valtech Valuation has a strong track record on LSP valuation which has passed the review from various Big 4 audit teams. We also provide further support in providing relevant figures for accounting disclosures such as sensitivity testing and discount rate, ensuring that our client meets the disclosure requirements.

About Valtech Valuation

Valtech Valuation is a professional valuation firm accredited with ISO-9001 in valuation advisory services. The firm is renowned for its expertise in advanced valuation techniques, customized valuation models, data-driven insights, and adherence to compliance and reporting standards. The firm has a solid track record in valuation advisory for listed companies, private equity, fund managers, and financial institutions. Valtech’s qualified team comprises members with PhDs, CPA (HKICPA), CFA, Chartered Valuation Surveyors of the Royal Institution of Chartered Surveyors, and valuers accredited with Business Valuation (ABV) by AICPA and CVA qualifications in Singapore. Valtech continues to expand into more markets by leveraging its valuation platform and recruiting local experts.

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