A radical reform of the accounting system is under consideration because of the need to adapt domestic accounting practices to international standards, according to Feng Shuping, head of the Accounting Department of the Ministry of Finance. Functionaries are now working overtime to formulate such new and comprehensive standards.
The system is expected to replace the ongoing accounting system prevalent in all enterprises, even small ones that raise no foreign funds. According to Feng, the new system will go far beyond just a reform of bookkeeping. It will be a reform in the basic nature and concept of accounting.
However the new accounting system will be similar to that now used in shareholding companies, but with improvements in fixed and intangible asset assessments. Thus most listed companies should encounter few difficulties in adopting the new system.
The revision of the accounting system began early this year. It is currently in the draft stage with scheduled completion in early 2001. It will be applied first to some qualified enterprises, including listed companies, as soon as it is approved through legislative procedures.
(CIIC 11/23/2000)
