China Accounting Standards: Introduction and Effects of New Chinese Accounting Standards for Business Enterprises

332 Pages·2016·2.92 MB·English

by  Lorenzo Riccardi (auth.)

Lorenzo Riccardi
China Accounting
Standards
Introduction and Effects of New Chinese
Accounting Standards for Business
Enterprises
China Accounting Standards
Lorenzo Riccardi
China Accounting Standards
Introduction and Effects of New Chinese
Accounting Standards for Business
Enterprises
123
Lorenzo Riccardi
Shanghai
China
ISBN978-981-10-0004-1 ISBN978-981-10-0006-5 (eBook)
DOI 10.1007/978-981-10-0006-5
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Contents
1 Introduction to New Accounting Standards for Business
Enterprises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2 ASBE’s Main Features and General Differences of New China
GAAP Versus US GAAP and IFRS. . . . . . . . . . . . . . . . . . . . . . . . 5
3 Impact and Results on Financial Statements . . . . . . . . . . . . . . . . . 9
4 Effects of the New PRC GAAP. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5 Accounting Standards for Business Enterprises
No. 1—Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 13
5.2 Chapter II: Recognition . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.3 Chapter III: Measurement. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.4 Chapter IV: Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.5 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.6 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6 Accounting Standards for Business Enterprises
No. 2—Long-Term Equity Investments . . . . . . . . . . . . . . . . . . . . . 19
6.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 19
6.2 Chapter II: Initial Measurement. . . . . . . . . . . . . . . . . . . . . . . 19
6.3 Chapter III: Subsequent Measurement . . . . . . . . . . . . . . . . . . 20
6.4 Chapter IV: Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.5 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.6 Example. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7 Accounting Standards for Business Enterprises
No. 3—Investment Real Estates. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 25
7.2 Chapter II: Recognition and Initial Measurement. . . . . . . . . . . 26
7.3 Chapter III: Follow-Up Measurement. . . . . . . . . . . . . . . . . . . 26
7.4 Chapter IV: Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
v
vi Contents
7.5 Chapter V: Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.6 Chapter VI: Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.7 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.8 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8 Accounting Standards for Business Enterprises
No. 4—Fixed Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 31
8.2 Chapter II: Recognition . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.3 Chapter III: Initial Measurement . . . . . . . . . . . . . . . . . . . . . . 32
8.4 Chapter IV: Subsequent Measurement . . . . . . . . . . . . . . . . . . 33
8.5 Chapter V: Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.6 Chapter VI: Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.7 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.8 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9 Accounting Standards for Business Enterprises
No. 5—Biological Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 37
9.2 Chapter II: Recognition and Initial Measurement. . . . . . . . . . . 38
9.3 Chapter III: Subsequent Measurement . . . . . . . . . . . . . . . . . . 39
9.4 Chapter IV: Harvest and Disposal . . . . . . . . . . . . . . . . . . . . . 41
9.5 Chapter V: Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.6 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.7 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10 Accounting Standards for Business Enterprises
No. 6—Intangible Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 45
10.2 Chapter II: Confirmation . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.3 Chapter III: Initial Measurement . . . . . . . . . . . . . . . . . . . . . . 47
10.4 Chapter IV: Subsequent Measurement . . . . . . . . . . . . . . . . . . 47
10.5 Chapter V: Disposal and Discarding . . . . . . . . . . . . . . . . . . . 48
10.6 Chapter VI: Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
10.7 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.8 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11 Accounting Standards for Business Enterprises
No. 7—Exchange of Non-Monetary Assets. . . . . . . . . . . . . . . . . . . 51
11.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 51
11.2 Chapter II: Confirmation and Measurement. . . . . . . . . . . . . . . 52
11.3 Chapter III: Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
11.4 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
11.5 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Contents vii
12 Accounting Standards for Business Enterprises
No. 8—Impairment of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
12.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 55
12.2 Chapter II: Recognition of Assets with Potential
Impairment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
12.3 Chapter III: Measurement of Recoverable Amount
of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
12.4 Chapter IV: Determination of Losses of Asset
Impairment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
12.5 Chapter V: Recognition of Group Assets and Treatments
of Impairment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
12.6 Chapter VI: Treatment of Impairment of Business
Reputation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
12.7 Chapter VII: Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.8 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
12.9 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
13 Accounting Standards for Business Enterprises
No. 9—Employee Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . 67
13.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 67
13.2 Chapter II: Confirmation and Measurement. . . . . . . . . . . . . . . 67
13.3 Chapter III: Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
13.4 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
13.5 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
14 Accounting Standards for Business Enterprises
No. 10—Enterprise Annuity Fund. . . . . . . . . . . . . . . . . . . . . . . . . 71
14.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 71
14.2 Chapter II: Confirmation and Measurement. . . . . . . . . . . . . . . 71
14.3 Chapter III: Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
14.4 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
14.5 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
15 Accounting Standards for Business Enterprises
No. 11—Share-Based Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . 77
15.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 77
15.2 Chapter II: The Equity-Settled Share-Based Payments . . . . . . . 78
15.3 Chapter III: The Cash-Settled Share-Based Payments. . . . . . . . 79
15.4 Chapter IV: Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
15.5 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
15.6 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
16 Accounting Standards for Business Enterprises
No. 12—Debt Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
16.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 83
16.2 Chapter II: Accounting Treatment of Debtors . . . . . . . . . . . . . 83
viii Contents
16.3 Chapter III: Accounting Treatments of the Creditor . . . . . . . . . 84
16.4 Chapter IV: Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
16.5 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
16.6 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
17 Accounting Standards for Business Enterprises
No. 13—Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
17.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 87
17.2 Chapter II: Recognition and Measurement . . . . . . . . . . . . . . . 87
17.3 Chapter III: Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
17.4 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
17.5 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
18 Accounting Standards for Business Enterprises
No. 14—Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
18.1 Chapter I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
18.2 Chapter II: Revenue from Selling Goods . . . . . . . . . . . . . . . . 91
18.3 Chapter III: Revenue from Providing Labor Services. . . . . . . . 92
18.4 Chapter IV: Revenue from Abalienating the Right
to Use Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
18.5 Chapter V: Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
18.6 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
18.7 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
19 Accounting Standards for Business Enterprises
No. 15—Construction Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . 97
19.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 97
19.2 Chapter II: The Split Up and Combination of Contracts. . . . . . 97
19.3 Chapter III: Contract Revenue. . . . . . . . . . . . . . . . . . . . . . . . 98
19.4 Chapter IV: Contract Costs. . . . . . . . . . . . . . . . . . . . . . . . . . 99
19.5 Chapter V: Recognition of Contract Revenue
and Contract Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
19.6 Chapter VI: Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
19.7 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
19.8 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
20 Accounting Standards for Business Enterprises
No. 16—Government Subsidies. . . . . . . . . . . . . . . . . . . . . . . . . . . 105
20.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 105
20.2 Chapter II: Recognition and Measurement . . . . . . . . . . . . . . . 105
20.3 Chapter III: Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
20.4 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
20.5 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Contents ix
21 Accounting Standards for Business Enterprises
No. 17—Borrowing Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
21.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 109
21.2 Chapter II: Recognition and Measurement . . . . . . . . . . . . . . . 109
21.3 Chapter III: Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
21.4 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
21.5 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
22 Accounting Standards for Business Enterprises
No. 18—Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
22.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 115
22.2 Chapter II: Tax Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
22.3 Chapter III: Temporary Difference. . . . . . . . . . . . . . . . . . . . . 116
22.4 Chapter IV: Recognition. . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
22.5 Chapter V: Measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
22.6 Chapter VI: Presentation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
22.7 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
22.8 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
23 Accounting Standards for Business Enterprises
No. 19—Foreign Currency Translation . . . . . . . . . . . . . . . . . . . . . 121
23.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 121
23.2 Chapter II: Determination of Functional Currency . . . . . . . . . . 122
23.3 Chapter III: Accounting Treatment for Foreign Currency
Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
23.4 Chapter IV: Translation of Foreign Currency Financial
Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
23.5 Chapter V: Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
23.6 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
23.7 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
24 Accounting Standards for Business Enterprises
No. 20—Business Combinations . . . . . . . . . . . . . . . . . . . . . . . . . . 127
24.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 127
24.2 Chapter II: Classification of Leases . . . . . . . . . . . . . . . . . . . . 127
24.3 Chapter III: Accounting Treatments of Lessees in Finance
Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
24.4 Chapter IV: Accounting Treatments of Lessors in Finance
Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
24.5 Chapter V: Accounting Treatments of Lessees
in Operating Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
24.6 Chapter VI: Accounting Treatments of Lessors
in Operating Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
24.7 Chapter VII: Sale and Leaseback Transactions . . . . . . . . . . . . 132
x Contents
24.8 Chapter VIII: Presentation . . . . . . . . . . . . . . . . . . . . . . . . . . 132
24.9 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
24.10 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
25 Accounting Standards for Business Enterprises
No. 21—Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
25.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 135
25.2 Chapter II: Classification of Leases . . . . . . . . . . . . . . . . . . . . 135
25.3 Chapter III: Accounting Treatments of Lessees in Finance
Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
25.4 Chapter IV: Accounting Treatments of Lessors in Finance
Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
25.5 Chapter V: Accounting Treatments of Lessees
in Operating Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
25.6 Chapter VI: Accounting Treatments of Lessors
in Operating Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
25.7 Chapter VII: Sale and Leaseback Transactions . . . . . . . . . . . . 139
25.8 Chapter VIII: Presentation . . . . . . . . . . . . . . . . . . . . . . . . . . 140
25.9 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
25.10 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
26 Accounting Standards for Business Enterprises
No. 22—Recognition and Measurement of Financial
Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
26.1 Chapter I: General Principles . . . . . . . . . . . . . . . . . . . . . . . . 145
26.2 Chapter II: Classification of Financial Assets
and Financial Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
26.3 Chapter III: Embedded Derivative Instruments . . . . . . . . . . . . 151
26.4 Chapter IV: Recognition of Financial Instruments . . . . . . . . . . 152
26.5 Chapter V: Measurement of Financial Instruments. . . . . . . . . . 153
26.6 Chapter VI: Impairment of Financial Assets . . . . . . . . . . . . . . 156
26.7 Chapter VII: Determination of the Fair Value. . . . . . . . . . . . . 159
26.8 Chapter VIII: Definition of Financial Assets, Financial
Liabilities, and Equity Instruments. . . . . . . . . . . . . . . . . . . . . 162
26.9 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
26.10 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
27 Accounting Standards for Business Enterprises
No. 23—Transfer of Financial Assets. . . . . . . . . . . . . . . . . . . . . . . 167
27.1 Chapter I: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 167
27.2 Chapter II: Recognition of Transfer of Financial Assets . . . . . . 167
27.3 Chapter III: Measurement of Transfer of Financial Assets. . . . . 170
27.4 Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
27.5 Examples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174