Chinese accounting system

chinese accounting slang

Other statements may be prepared based on the enterprise's requirements and by reference to the standard accounting forms and specifications for specific industries drawn up or approved by the Ministry of Finance.

The book balances of the general reserve fund and the enterprise expansion fund shall not be reduced except where approval is obtained for the former to be applied in setting off accumulated losses or increasing capital and the latter in increasing capital. Inthe Chinese government introduced a revised accounting law.

Such loss may also be charged to a provision for losses that may arise on sale of the inventory and stated as a deduction from inventory in the balance sheet.

China ias

With online support, the Junior Admin, the Virtual CFO and the owner of the company can access the same set of real-time data. Current liabilities denominated in multi-currencies shall be individually accounted for in their originating currencies. For trading and service enterprises, the historical cost of commodities purchased includes purchase consideration and taxes payable. Article 11 Accounting methods adopted by enterprises with foreign investment shall be consistent within each accounting period and from one period to the next and shall not be changed at will. The cost of fixed assets under finance leases represents the purchase consideration stated in the contracts including transportation, loading and unloading expenses, insurance and taxes payable borne by the enterprise. In contrast to a Western balance sheet , Chinese accounting standards did not include an accounting of the debts that a corporation holds, and were less suitable for management control than for accounting for tax purposes. Article 35 When the construction of an asset is completed and it is used in operation but the total cost of the asset is yet to be determined, the asset shall be transferred to fixed assets at the estimated value based on the budgeted price or cost of the work, and shall be depreciated according to the provisions set out in Article 31 of the System. Chinese accounting standards are unique because they originated in a socialist period in which the state was the sole owner of industry. The cost of fixed assets contributed by the investors represents the amount stated in contracts, agreements, the enterprise's application document for incorporation or the statement of examination and receipt of fixed assets contributed including transportation, loading and unloading expenses, insurance and taxes payable borne by the enterprise. All original documents and primary vouchers must be true, complete and accurate, and shall be obtained or prepared through proper procedures. Cost shall also include installation costs, if any, of the fixed assets.

Where changes are necessary, approval shall be obtained from the responsible finance bureau or other relevant supervisory authorities under the State Council. Where debentures are acquired at a premium or discount, the difference between the cost and the face value of the debentures shall be amortized by installments using the straight line method or effective interest rate method over the period to maturity of the debentures in order to adjust the interest income and the book value of the long term investments.

Retained until the enterprise is put into liquidation. Failure to do so may result in extra expenses, penalties, or even revocation of their business license.

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Accounting System in China: An Overview on the Convergence to IAS/IFRS.