Accounting Standard for Business Enterprises:

Basic Standard



Contents



The People's Republic of China

Accounting Standard for Business Enterprises:

Basic Standard



Chapter I General Provisions



Article 1. In accordance with "The Accounting Law of the People's Republic of China", this Standard is formulated to meet the needs of developing a socialist market economy in our country, to standardize accounting practice and to ensure the quality of accounting information.



Article 2. This Standard is applicable to all enterprises established within the territory of the People's Republic of China. Chinese enterprises established outside the territory of the People's Republic of China (hereinafter referred to as "enterprises abroad") are required to prepare and disclose their financial reports to appropriate domestic regulatory authorities in accordance with this Standard.



Article 3. Accounting systems of enterprises are required to comply with this Standard.



Article 4. An enterprise shao9ill accurately account for all its transactions actually taken place in order to provide reports of reliable quality on the economic and financial activities of the enterprise itself.



Article 5. Accounting and financial reports should proceed on the basis that the enterprise is a continuing entity and will remain in operation into the foreseeable future.



Article 6. An enterprise shall account for its transactions and prepare its financial statements in distinct accounting periods. Accounting periods may be a fiscal year, a quarter, or a month, commencing on first days thereof according to the Gregorian calendar.



Article 7. The Renminbi is the bookkeeping base currency of an enterprise. A Foreign currency may be used as the bookkeeping base currency for enterprises which conduct transactions mainly in foreign currency. However, in preparing financial statements, foreign currency transactions are to be converted into Renminbi. This latter requirement app1ies to enterprises abroad when reporting financial and economic results to concerned domestic organizations.



Article 8. The debit and credit double entry bookkeeping technique is to be used for recording all accounting transactions.



Article 9. Accounting records and financia1 reports are to be compiled using the Chinese language. Minority or foreign languages may be used concurrently with the Chinese 1anguage by enterprises in autonomous areas of minority nationalities, or by enterprises with foreign investment, and by foreign enterprises.
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