China
| Extent of IFRS application | Status | Additional Information |
|---|---|---|
| IFRS Standards are required for domestic public companies | China's national standards are substantially converged with IFRS Standards, and China has committed to adopt IFRS Standards for reporting by at least some domestic companies although there is no timetable for completion of the process. Chinese companies representing more than 30 per cent of the total market capitalisation of the domestic market produce IFRS-compliant financial statements as a result of their dual listings in Hong Kong and other international markets. | |
| IFRS Standards are permitted but not required for domestic public companies | ||
| IFRS Standards are required or permitted for listings by foreign companies | Foreign companies do not trade currently in Chinese securities markets. Therefore, there is no relevant regulation on whether those companies would be permitted to use IFRS Standards. | |
| The IFRS for SMEs Standard is required or permitted | No. | |
| The IFRS for SMEs Standard is under consideration | No. |
Organisation
Accounting Regulatory Department, Ministry of Finance, People’s Republic of China
Note added by IFRS Foundation: As Special Administrative Regions of the People’s Republic of China, both Hong Kong and Macao adopt their own financial reporting standards. Accordingly, there are separate jurisdictional profiles for Hong Kong and Macao.
Role of the organisation
Website
Email contact
Has the jurisdiction made a public commitment in support of moving towards a single set of high quality global accounting standards?
Has the jurisdiction made a public commitment towards IFRS Standards as that single set of high quality global accounting standards?
What is the jurisdiction's status of adoption?
Additional comments provided on the adoption status?
2005 Joint Statement
The Chinese Accounting Standards for Business Enterprises (ASBEs) issued in February 2006 were substantially converged with IFRS, which was recognised in the Joint Statement of CASC Secretary-General and IASB Chairman signed in November 2005. Based on the Roadmap for Continuing Convergence of Chinese Accounting Standards for Business Enterprises with International Financial Reporting Standards released by the Ministry of Finance of China in April 2010, the ASBEs will be revised and improved in accordance with the revision and improvement of IFRS, in order to continue convergence of the ASBEs with IFRS.
2015 Joint Statement
On 18 November 2015, The IFRS Foundation and the Chinese Ministry of Finance announced the formation of a joint working group to explore ways and steps to advance the use of IFRS Standards within China, especially for internationally-oriented Chinese companies. The announcement forms part of a comprehensive update to the 2005 Beijing Joint Statement. The 2015 Joint Statement:
- establishes a joint working group to explore steps and ways to advance the use of IFRS Standards within China, especially for internationally-oriented Chinese companies;
- identifies the vision of Chinese Accounting Standards becoming fully converged with IFRS Standards, which is consistent with the G20-endorsed objective of a single set of high quality, global accounting standards; and
- encourages continued co-operation between the IASB Board and Chinese stakeholders in the future development of IFRS Standards.
If the jurisdiction has NOT made a public statement supporting the move towards a single set of accounting standards and/or towards IFRS Standards as that set of standards, explain the jurisdiction's general position towards the adoption of IFRS Standards in the jurisdiction.
For DOMESTIC companies whose debt or equity securities trade in a public market in the jurisdiction:
Are all or some domestic companies whose securities trade in a public market either required or permitted to use IFRS Standards in their consolidated financial statements?
No, the use of IFRS Standards is not permitted for domestic companies. All Chinese companies whose securities trade in a public market in China are required to use Chinese Accounting Standards for Business Enterprises (ASBEs) for financial reporting within mainland China.
It should be noted, however, that Chinese companies whose securities trade on the Stock Exchange of Hong Kong may choose among IFRS Standards, Hong Kong Financial Reporting Standards (HKFRS), and ASBEs for purposes of financial reporting to Hong Kong investors. Those financial reports are in addition to the ASBE financial reports that the Chinese companies issue within mainland China. At 30 September 2017, 398 Chinese companies trade in Hong Kong (on the ‘Red Chip’ and ‘H-Share’ main boards). The financial reporting frameworks used by those companies in Hong Kong are as follows:
| Which standards? | Number of companies | Per cent of companies | Market capitalisation (US Dollars) | Per cent of market capitalisation |
|---|---|---|---|---|
| IFRS Standards | 85 | 21% | 398,193,026,817.17 | 27% |
| HKFRS | 258 | 65% | 1,046,099,745,913 | 70% |
| ASBE | 55 | 14% | 38,505,889,963 | 3% |
| Total | 398 | 100% | 1,482,798,662,693 | 100% |
There are also a number of Chinese companies that use IFRS Standards for the purpose of trading in the United States and in Europe.
If YES, are IFRS Standards REQUIRED or PERMITTED?
Does that apply to ALL domestic companies whose securities trade in a public market, or only SOME? If some, which ones?
Are IFRS Standards also required or permitted for more than the consolidated financial statements of companies whose securities trade in a public market?
For instance, are IFRS Standards required or permitted in separate company financial statements of companies whose securities trade in a public market?
For instance, are IFRS Standards required or permitted for companies whose securities do not trade in a public market?
If the jurisdiction currently does NOT require or permit the use of IFRS Standards for domestic companies whose securities trade in a public market, are there any plans to permit or require IFRS Standards for such companies in the future?
For FOREIGN companies whose debt or equity securities trade in a public market in the jurisdiction:
Are all or some foreign companies whose securities trade in a public market either REQUIRED or PERMITTED to use IFRS Standards in their consolidated financial statements?
If YES, are IFRS Standards REQUIRED or PERMITTED in such cases?
Does that apply to ALL foreign companies whose securities trade in a public market, or only SOME? If some, which ones?
Which IFRS Standards are required or permitted for domestic companies?
The auditor's report and/or the basis of presentation footnotes states that financial statements have been prepared in conformity with:
Does the auditor's report and/or the basis of preparation footnote allow for ‘dual reporting’ (conformity with both IFRS Standards and the jurisdiction’s GAAP)?
Are IFRS Standards incorporated into law or regulations?
If yes, how does that process work?
If no, how do IFRS Standards become a requirement in the jurisdiction?
Does the jurisdiction have a formal process for the 'endorsement' or 'adoption' of new or amended IFRS Standards (including Interpretations) in place?
If yes, what is the process?
If no, how do new or amended IFRS Standards become a requirement in the jurisdiction?
Has the jurisdiction eliminated any accounting policy options permitted by IFRS Standards and/or made any modifications to any IFRS Standards?
If yes, what are the changes?
Other comments regarding the use of IFRS Standards in the jurisdiction?
Are IFRS Standards translated into the local language?
If they are translated, what is the translation process? In particular, does this process ensure an ongoing translation of the latest updates to IFRS Standards?
Has the jurisdiction adopted the IFRS for SMEs Standard for at least some SMEs?
If no, is the adoption of the IFRS for SMEs Standard under consideration?
Did the jurisdiction make any modifications to the IFRS for SMEs Standard?
If the jurisdiction has made any modifications, what are those modifications?
Which SMEs use the IFRS for SMEs Standard in the jurisdiction, and are they required or permitted to do so?
For those SMEs that are not required to use the IFRS for SMEs Standard, what other accounting framework do they use?
Other comments regarding use of the IFRS for SMEs Standard?
The Chinese Accounting Standard for Small Entities was published by the Ministry of Finance in October 2011. China used the IFRS for SMEs Standard as an important reference when developing the Chinese Accounting Standard for Small Entities.
The IFRS for SMEs Standard has been translated into simplified Chinese
General requirements for companies for-profit entities
Listed companies
Listed companies are required to publish their annual financial statements on the website designated by the China Securities Regulatory Commission (CSRC) within four months after the financial year (ie 30 April).
The Shanghai and Shenzhen Stock Exchanges require the release of the annual financial reports within four months of the fiscal year end physically, and they are publicly available.
General requirement for companies
Listed companies
Organisation
What type or format of structured electronic filing is required or permitted?
What is the purpose of the electronic filing?
The pilot project aims to promote more and more enterprises to use XBRL, develop the electronic filing competence of enterprises and. reveal the value of XBRL.
The detailed purposes include:
- Promote enterprises to fill financial reports using XBRL.
- Encourage enterprises to use XBRL internally, such as industry benchmarking analysis.
- Promote the XBRL applications in regulatory departments following the Loose-coupled Model; that is, every regulatory department develops its own regulation taxonomy based on the CAS Taxonomy and follows the same technical route of the CAS Taxonomy. The data standards among different regulatory departments will be unified by the involvement of those departments at every stage.
The ultimate goal is to share data among different regulatory departments and reduce the filing burden on enterprises
What documents are required to be filed to the electronic filing system?
Is the financial data provided in XBRL format publicly available?
Is the XBRL reporting system based on the IFRS Taxonomy issued by the IASB?
If no, what are the reasons for not using the IFRS Taxonomy?
Enterprises in China prepare and submit the financial reports under China Accounting Standards (CAS), which are convergent with IFRS. Accordingly, the e-filing using XBRL is based on the CAS Taxonomy.
The MOF adopted the Interoperable Taxonomy Architecture (ITA) of the IFRS Foundation as XBRL taxonomy architecture guidance, which standardised the logical structure, physical structure and modelling method of taxonomy (not only the taxonomy for financial reports, but also for other disclosure reports).
At a taxonomy level, the CAS taxonomy imports the core schema of the IFRS Taxonomy and uses the elements from the IFRS Taxonomy whose underlying accounting facts are conceptually equivalent between IFRS and CAS. Moreover, industry-based extensions are created for the banking and oil/gas industry.
Is the IFRS for SMEs filing adopted in the XBRL reporting system?
If no, are there any plans to implement the IFRS for SMEs filing in the future?
How is the XBRL financial statement reporting system set up?
What is (are) the intended purpose(s) of the local base taxonomy?
Which IFRS Taxonomy files are used?
Which part(s) of the IFRS (local) Taxonomy do filer's submissions import/refer to?
Are filers permitted to replace or override any aspects or specified features of the IFRS (local) Taxonomy?
If yes, which aspects and how does this work?
What is the scope or coverage of XBRL filing/tagging?
- face statements/primary financial statement
- notes/footnotes
- ‘detailed’ tagging—all numeric facts
- block tagging
Are there any plans to extend the coverage of the XBRL filing/tagging in the future?
Which version of the IFRS Taxonomy is being used
2014 IFRS Taxonomy.
The CAS Taxonomy is updated according to the updates of the CAS. The CAS Taxonomy imports the latest version of the IFRS Taxonomy and is updated to reflect the newly released CAS.
If the taxonomy is to be updated to the 2014/2015 version, which of the following module(s) is (are) to be used?
Any guidelines or submission rules for filers?
The MOF introduced XBRL specifications released by the XBRL International as CAS, together with the Standardization Administration of the People's Republic of China (SAC).
To standardise the preparation process in XBRL financial reporting and promote the best practices, the MOF developed and released the filing rules for the CAS Taxonomy.
Do bodies in this jurisdiction use XBRL for purposes other than general purpose financial reports? (For example, taxation authorities, statistical purposes etc.)
Yes.
XBRL is also implemented in the Shanghai Stock Exchange and the Shenzhen Stock Exchange, although the taxonomies used are not based on the IFRS Taxonomy.
The State-owned Assets Supervision and Administration Commission (SASAC) will make XBRL filing mandatory step by step
