China's central-level State-Owned Enterprises (SOEs) and large
to mid-scale companies will all adopt China's new accounting
standards that comply with the International Financial Reporting
Standards (IFRS) by the end of 2009.
The country's small and medium-sized enterprises, which make up
99 percent of the total companies in China, will not comply with
the IFRS.
Speaking at an international accounting conference in Beijing
this week, Liu Yuting, director of the Accounting Department of the
Ministry of Finance (MOF), said central-level state-owned
enterprises would comply with the new regulations by 2008 and the
scope would be expanded to include all large and mid-scale
enterprises a year later.
"The MOF will also speed up the construction of an internal
control system on accounting to ensure the credibility of
accounting information released by the enterprises," said Liu.
China's listed companies adopted the new Chinese accounting
standards at the beginning of the year. The standards, including 39
specific principles for corporate accounting, are much closer to
international practices.
"There is a clear momentum toward accepting the IFRS as the
common financial reporting language throughout the world, and
companies from more and more countries including China are
benefiting from the trend," said David Tweedie, chairman of the
International Accounting Standards Board (IASB).
"The benefits of these accounting reforms for China are clear,
"said Tweedie. "The new Chinese standards that incorporate
accounting principles familiar to investors worldwide will
encourage investor confidence in China's capital market and
financial reporting, and will be an additional spur for investment
from both domestic and foreign sources of capital."
He added that for Chinese companies that are playing an
increasingly global role, the acceptance of the new standards
should also reduce the cost of complying with the accounting
regimes of different jurisdictions in which they operate.
The Republic of Korea announced its intention to adopt the IFRS
in 2009, India will make a decision on the issue some time this
month and Japan is also feeling the pressure to reform.
Iraj Talai, regional manager of the financial management of the
World Bank, said that China's experiences in accounting reforms
would be of great help to other emerging and transitional
economies.
(Xinhua News Agency July 13, 2007)
