Businesses coming to China, and so is accounting. Accounting in China is not an issue, mainly because the standards differ from the international standards. While it’s important to get good local China accounting advice, it doesn’t hurt to know how things work in the country.
This article will show you the difference between Chinese and International standards and the benefits of outsourcing a delicate function such as accounting.
An overview of Chinese accounting standards:
With the rapid development of China’s economy, significant progress has been made in the accountant’s individual business level and the improvement of economic stability, both to promote China’s economic stability and China’s economic development they are working on Accounting services in china.
As the main reference and basis for the implementation of accounting standards, it has also been changing and converging with international financial reporting standards in recent years.
There are no major differences between Chinese accounting standards and International Financial Reporting Standards yet.
Chinese Accounting Standards US IFRS:
Progress has been made in recent years in establishing international accounting standards.But the standards still differ from country to country, China is no exception. It is generally accepted that there are major differences between Chinese accounting standards and international accounting standards.
First of all, it is different from the standards before. The specific standards for Chinese accounting were not issued until 1997, as the Chinese economy moved beyond transformation and reform. The risks and costs were not easy to oversee, resulting in a difficult implementation of the accounting standards.
In the late 1990s, China issued more than 30 specific guidelines for drafting guidelines, but guidelines to be formed so far, actually 16. There are strategic goals, which are currently intended to get started.
China’s business accounting standards:
In addition, the regulation is not detailed enough, works poorly and does not cover new issues, such as future financial instruments.International accounting standards were first issued in 1973 and were used on the basis of a strongly developing market economy. The 41 accounting standards cover all economic companies and clear features of a market economy.
Second, accounting standards focus on different topics. China’s business accounting standards are on the income statement, the correct and average ratio of income. And the international accounting standards are focused on the balance sheet, the accurate measurement of assets.
Third, different accounting standards for the measurement mode. The core problem of financial accounting is the measurement problem. China’s expert standards of the core valuation is the historical cost, the vast majority of the account of the value.
The useful feature of international accounting standards is acquired value to augment the relevant accounting information. If we use the values of values as an example, use the Chinese standards generally use historical values, use values.
Outsourcing Accounting in China: Is It the Best Solution for Your Expansion in China?
It is generally accepted that there is not much difference between Chinese accounting standards and IFRS.
In practice, however, there are still major differences in concept, process and application environment between two standards.
For foreign companies operating in China, not understanding Chinese accounting standards and applying IFRS can cause problems with financial reports, and can even lead to misunderstandings when the company transfers files and financial information communicates with international investments in freezers for more details concern with Moore MS Advisory.