|Extent of IFRS application
|IFRS Accounting 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 Accounting Standards are permitted but not required for domestic public companies
|IFRS Accounting 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 Accounting Standard is required or permitted
|The IFRS for SMEs Accounting Standard is under consideration
Profile last updated: 12 January 2018
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.
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 the Board 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:
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:
|Number of companies
|Per cent of companies
|Market capitalisation (US Dollars)
|Per cent of market capitalisation
There are also a number of Chinese companies that use IFRS Standards for the purpose of trading in the United States and in Europe.
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