Lee & Lee Associates

TAX DUE DILIGENCE(2020年12月05日)

llaassociates — 2020-12-01T13:04:01+0900

http://www.lla.cc/service/tax-due-diligence/

If you do not feel comfortable for your company’s tax accruals and payments, if you are facing a tax audit by local tax authority, or if you want to establish a joint venture with a local partner, you may need to do a health check on you or the local partner to see whether you or the partner has been accruing and paying taxes timely and accurately. Since any underpaid taxes will be subject to a late interest penalty of 0.05% per day and a once-off fine ranging from 50% to 500%, the contingent tax liabilities would be prohibitively high.

You may find it necessary to ask experienced independent professionals to conduct a tax due diligence on all aspects of your tax affairs, not only covering all tax categories, but also accrual and payment status, i.e., to conduct a “health check”.

Our tax professionals can interview your company or your partners’ employees to understand their business activities, as well as accounting and tax treatments on the activities to unveil any irregularities and propose corrective measures.

Lee & Lee Associates is a professional service firm dedicated to providing high-quality services in accounting, auditing, tax due diligence report, tax due diligence checklist, financial due diligence, investment consulting, business deregistration, and business establishment in China.

PAYROLL SERVICE(2020年12月04日)

llaassociates — 2020-12-01T13:03:36+0900

http://www.lla.cc/service/payroll-service/

More and more enterprises are choosing to payroll outsourcing china their payroll function to maintain their competitive edge. Outsourcing your payroll function can enable you to focus on your core business activities, access to external expertise on labor and tax laws and regulations, reduce your risks and cost, and keep your compensation system confidential.

To ensure your payroll function being timely, accurately, and legally completed, our experienced professionals can

a) coordinate with your HR manager or other contact person,

b) collect all relevant information on basic salary, bonus, time records, social welfares, etc., for each of your employees,

c) calculate IIT payable, net salary, welfare payable, etc.

d) coordinate with relevant governmental bodies and pay various social welfares on your behalf,

e) make payment of IIT to tax authority and obtain tax payment certificates

f) make payment to each of your employees

g) update your top management with any latest laws and regulations on social welfares or tax, and

h) provide HR and individual income tax advisory where necessary.

FINANCIAL DUE DILIGENCE(2020年12月03日)

llaassociates — 2020-12-01T13:03:11+0900

http://www.lla.cc/service/financial-due-diligence/

To successfully enter the China market, you may have different options, such as working with a local sales/service agent, setting up a business from scratch, or finding a local partner and establishing an equity joint venture or cooperative joint venture.

Working with local partners, you will be able to access local market expertise, well-established sales channels, local brand names, local finance, and support from local governments, etc. However, you will also realize the credentials of the local partner, background of local management, and the fairness of the financial statements.

You may have a deep concern regarding the following issues:

√ Any significant tax risks?

√ Any illegal activities?

√ Any other unrecorded and contingent liabilities?

√ Any significant loopholes in corporate governance?

√ Any sound internal control policy in place?

√ All the assets recorded in accounts still exist?

√ Any impairment issues for the existing fixed assets?

√ Any provisions required for receivables and stocks?

√ Revenue not manipulated?

Our customized financial due diligence accounting can be conducted exactly according to your specific instructions, address all your concerns and provide you a full picture of your targeted local partner.

EMPLOYMENT CONTRACT(2020年12月02日)

llaassociates — 2020-12-01T13:02:44+0900

http://www.lla.cc/service/employment-contract/

You may have an employment contract in chinese at your head office. However, you can expect many differences between it and a “should-be” employment contract as required by Chinese law. A well-structured employment contract can not only protect you and your employee’s interests, but also avoid any unnecessary penalties due to failure of compliance of prevailing Chinese labor laws and regulations.

Our experts who are versed in Chinese labor and tax laws can either draft an employment contract for you from scratch or review your employment contract template and update it to a customized version for your company and employee to sign.

CAPITAL VERIFICATION(2020年12月01日)

llaassociates — 2020-12-01T13:02:17+0900

http://www.lla.cc/service/capital-verification/

According to Chinese law, all Foreign Invested Enterprises (“FIEs”) should provide capital verification reports to the Administration of Industry and Commerce (“AIC”), State Administration of Foreign Exchange (“SAFE”), Tax Authority, etc., after their registered capital are injected. The injected capital can be in form of cash, tangible assets, or intangible assets.

Our practicing certified public accountants can interview your finance personnel, coach them in providing necessary documents and issuing high quality capital verification reports.

HEAD HUNTING(2020年10月18日)

llaassociates — 2020-09-24T10:48:28+0900

http://www.lla.cc/service/head-hunting/

The role of today’s finance function should not only be a bookkeeper and doorkeeper, but also a strategy advisor, providing insights in the industry from finance perspective. Thus, to recruit and retain both technically competent and high-integrity professional finance personnel is the key for your success in China.

Through our years of professional service, we have the opportunity and capability to identify, maintain and continuously update our talent database. In case you are in need of good finance personnel whether at an operational level or executive level, we can recommend suitable candidates to cater to your specific requirements.

Lee & Lee Associates is setting up a company in china,we cooperate with many head hunting firms,contact us now.

DOING BUSINESS IN ASIA PACIFIC REGION NEWSLETTER SERIES(2020年10月18日)

llaassociates — 2020-09-24T10:48:02+0900

http://www.lla.cc/service/doing-business-in-asia-pacific-region-newsletter-series/

Asia Pacific region is the most dynamic investment destination. If you want to invest in the region but don’t know how, please click the link below to find the information you need. This is a series of newsletters: the first issue is “Establish a Business in Asia Pacific Region”, the second issue is “Tax System Snapshot in Asia Pacific Region”, the third issue is “Privileged Tax Policies in Asia Pacific Region”, and the fourth issue is “Hiring People in Asia Pacific Region”. More interesting topics will follow up regularly. Please kindly pay close attention. Thank you.

Lee & Lee Associates is setting up a company in china,we provide sox 404 top down risk assessment,RFQ today.

BUSINESS SETUP IN CHINA(2020年10月11日)

llaassociates — 2020-09-24T10:47:34+0900

http://www.lla.cc/service/business-setup-in-china/

With the accession to WTO, China is becoming a more and more international market. Most of the Fortune 500 multinational companies have come to China and achieved significant growth as a result. Not limited to multinationals,, thousands of small and medium size companies have set up their presence in China as well.

Our business service professionals are familiar with the procedures of setting up businesses in China, whether the business you intend to set up is a representative office, a joint venture or a wholly foreign owned enterprise. We can advise you on the suitable strategy to set up your business from the very first step in China.

Lee & Lee Associates is setting up a company in china,we provide china business setup,setting up a business in china,china company registration and audit assessment,contact us now.

BUSINESS PLAN(2020年10月11日)

llaassociates — 2020-09-24T10:47:03+0900

http://www.lla.cc/service/business-plan/

If you want to showcase the potential and value of your project in order to persuade the investor or other stakeholder to invest or support it, it is essential for you to prepare a good business plan.

Business plan can help you track, supervise, feedback or assess your business procedure and position your business to the right direction. It can also act as a tool for internal commitment and the base of motivation.

The professionals of Lee & Lee Associates can help you prepare a customized business plan to achieve your finance and management goals.

Lee & Lee Associates is setting up a company in china,we provide Custom Business Plan,RFQ today.s

BUSINESS DEREGISTRATION(2020年10月04日)

llaassociates — 2020-09-24T10:46:26+0900

http://www.lla.cc/service/business-deregistration/

There are a number of government bodies you need to go through if you want to business deregistration. The period to deregister a business generally would normally range from 3 months to half a year or even longer due to complicated procedures.

Of these government bodies, the tax authority is most critical. The tax authority will go to your company to conduct a full tax audit from the date of inception of the company until its fieldwork date. All vouchers, ledgers, financial statements, contracts, tax filings documents, tax payment receipts, etc., must be provided for its review. Any questions from the tax authority should be promptly explained. Any discrepancy from tax rules may result in repayments, fines, or penalties due to your non-compliance.

We can work with your accounting staff, handle the liquidation committee, and coordinate various government relationships to smoothly withdraw you from a non-performing business.

BUSINESS ANNUAL FILING(2020年10月04日)

llaassociates — 2020-09-24T10:46:00+0900

http://www.lla.cc/service/business-annual-filing/

Every year all FIEs are required to conduct business annual filings to different government bodies, including the Administration of Industry and Commerce (“AIC”), State Administration of Foreign Exchange (“SAFE”) and Customs, etc.

We can work independently or together with your accounting and business department to take care of these annual business filings.

Lee & Lee Associates is setting up a company in china,we provide annual filing services,contact us now.

AUDITING(2020年09月28日)

llaassociates — 2020-09-24T10:45:23+0900

http://www.lla.cc/service/auditing/

1. Assurance and Advisory
Successful audits can best be achieved with an experienced audit team, dedicated audit management with years of expertise, strict quality control procedures, and the highest level of professional ethics. Lee & Lee Associates can provide you with a customized, high-quality audit service through our experienced audit team in a cost-effective manner.

We are dedicated to providing you with not only an audit report in-line with international best practices but value-added services as well. We are committed to raising the issues noted during the course of our audit, including accounting, finance, tax, legal, internal control, business management, and so forth. Not merely an audit report writer, we are dedicated to working with you in order to solve any issues and initiate optimization changes to optimize the performance of your organization.

2. PRC Statutory Audit
In China, statutory audits are required for all Foreign Invested Enterprises (“FIEs”) each year. Compliance to all prevailing Chinese statutory requirements is a must. These requirements comprise laws and regulations on accounting, finance, tax, foreign exchange, social welfare, customs, administration of industry and commerce, etc.

With extensive local expertise, we can ensure a smooth statutory audit and its compliance being successfully completed in a timely manner.

3. IFRS Audit
International Financial Reporting Standards (“IFRS”) became effective since 1 January 2005 for all listed companies in Europe. Furthermore, there is a trend of convergence of IFRS with local Generally Accepted Accounting Principles (“GAAP”) in many countries.

Preparation of accounts in accordance with IFRS will enhance the transparency, credibility and comparability of the financial statements. As a result, it should result in easier access to capital markets, higher credit ratings and corporate reputation, etc.

Our experienced professionals can assist you in preparing financial statements by sorting out the differences between the PRC GAAP and IFRS and then propose GAAP adjustments on statutory accounts.

4. US GAAP Audit
US GAAP represents a set of accounting rules used to prepare financial statements for publicly traded companies and many private companies in the United States. In order to cope with the sophisticated capital market over the past one hundred years, US GAAP has been evolved to one of the most comprehensive GAAPs in the world and is still being frequently updated. Yet, the complexity of US GAAP caused lots of difficulties for accountants in understanding and applying proper principles and accounting treatments.

Further more, under the Sarbanes-Oxley Act of 2002, US public companies are now subject to new requirements for management and independent auditors to report on the effectiveness of internal control over financial reporting. One set of effective internal controls are fundamental to investor confidence in financial reporting because they help to deter fraud and to prevent inaccurate financial statements. However, many companies are experiencing the difficulties in compliance of the internal control requirements.

We have experienced US CPAs who once worked with big 4 accounting firm over 10 years. We therefore can act either as an advisor to help you prepare your 10K or 10Q financial statements and notes in compliance with the rules of SEC and Sarbanes-Oxley Act 404, or as an auditor to audit your financial statements for your consolidation purpose or filing purpose.

Lee & Lee Associates is setting up a company in china,we provide establishment services and gaap audit,RFQ today.

PRC ACCOUNTING SYSTEM(2020年09月28日)

llaassociates — 2020-09-24T10:44:47+0900

http://www.lla.cc/knowledge-center/technical-center/accounting/prc-accounting-system/

What is role of the Accounting Law of the PRC?
The Accounting Law of the PRC (revised on 1 July 2000) has highest authority on accounting sector in China. It sets out general accounting principles for all enterprises, including the nature and role of accounting and basic principles. It empowers the Ministry of Finance of PRC to administer accounting affairs and to establish uniform accounting regulations […]

What are the major differences between PRC accounting system and those in other countries?
In establishing your company’s accounting structure, one of the first tasks is to identify and to reconcile the differences in accounting practices used by your parent company and the rules in China. The PRC does not exactly follow international accounting policies and guidelines, although it is moving on this direction and so far, many of the […]

challenges of internal control if internal control
What is Chinese Accounting Standards (CAS)?
The Ministry of Finance (“MOF”) has been for a long time working to develop a set of Chinese Accounting Standards that are largely in line with International Financial Reporting Standards (“IFRS”). The MOF issued its first Standard in 1997. To date, 17 standards have been adopted and others are still under preparation. A complete list […]

How is the Accounting System for Business Enterprises of PRC prepared?
In January 2001, the Ministry of Finance (“MOF”) adopted a comprehensive Accounting System for Business Enterprises (“the System”). The System is based, partially, on the experience of the MOF in implementing the Accounting System for Joint Stock Limited Enterprises and, partially, on the existing individual Chinese Accounting Standards (“CAS”) issued over the past few years.

challenges of internal control if internal control
Which system should joint stock limited enterprises follow?
Starting 1 January 2001, all joint stock limited enterprises (“JSLEs”) were required to follow the System – except enterprises in banking, insurance, and other specialised financial industries. When the System became effective on 1 January 2001, the old Accounting System for JSLEs was abolished. Starting from 2001, enterprises besides JSLEs have been encouraged to follow […]

Is the Accounting System applicable to FIEs?
As of 1 January 2002, the MOF extended the applicable scope of the System to all foreign invested enterprises excluding those in banking, insurance, and other financial service industry.

challenges of internal control if internal control
What is the accounting system for financial institutions?
Early in 2002, the MOF issued a new separate – though similar – accounting system for Financial Institutions. It must be adopted, starting 1 January 2002, by all listed and foreign invested banks, insurance companies, brokerages, leasing companies, and finance companies. Unlisted financial institutions that are joint stock limited enterprises are encouraged to follow the […]

What are the differences between the Accounting System and Accounting Standards?
While both are formulated and promulgated by MOF, there exist certain differences them. First, the application scope is different. Specific accounting standards are mostly applicable to joint stock limited companies, although sometimes the standards apply to other enterprises too. The Accounting System applies not only joint stock limited companies, but also other qualified enterprises. Second, […]

challenges of internal control if internal control
What are the four basic accounting assumptions in China?
(a) Accounting Entity An accounting entity can be an enterprise, an enterprise group or the accounting department of an enterprise. (b) Continuity Postulate The Accounting System stipulates that, under normal circumstances, the accounting treatment to be adopted by enterprises should be based on continuity postulate. For instance, the historical costing method is used for the […]

What are the basic principles of accounting in China?
The general principles guiding and evaluating accounting work comprise three categories. general principles for evaluating the quality of accounting information; general principles for recognizing and measuring accounting elements; and general principles for revising the above two sets of principles.

Lee & Lee Associates is setting up a company in china,we provide m&a financial due diligence and china social security number,contact us now.

TAX DUE DILIGENCE(2020年01月27日)

llaassociates — 2020-01-15T15:17:16+0900

http://www.lla.cc/service/tax-due-diligence/

If you do not feel comfortable for your company’s tax accruals and payments, if you are facing a tax audit by local tax authority, or if you want to establish a joint venture with a local partner, you may need to do an accountant in Chinese on you or the local partner to see whether you or the partner has been accruing and paying taxes timely and accurately. Since any underpaid taxes will be subject to a late interest penalty of 0.05% per day and a once-off fine ranging from 50% to 500%, the contingent tax liabilities would be prohibitively high.

Are you looking for China gaap? Lee & Lee Associates will be your choice!

PAYROLL SERVICE(2020年01月26日)

llaassociates — 2020-01-15T15:16:40+0900

http://www.lla.cc/service/payroll-service/

More and more enterprises are choosing to outsource their payroll function to maintain their competitive edge. Payroll outsourcing China can enable you to focus on your core business activities, access to external expertise on labor and tax laws and regulations, reduce your risks and cost, and keep your compensation system confidential.

To ensure your payroll function being timely, accurately, and legally completed, our experienced professionals can

a) coordinate with your HR manager or other contact person,

b) collect all relevant information on basic salary, bonus, time records, social welfares, etc., for each of your employees,

c) calculate IIT payable, net salary, welfare payable, etc.

d) coordinate with relevant governmental bodies and pay various social welfares on your behalf,

e) make payment of IIT to tax authority and obtain tax payment certificates

f) make payment to each of your employees

g) update your top management with any latest laws and regulations on social welfares or tax, and

h) provide HR and individual income tax advisory where necessary.

Are you setting up a company in China? Lee & Lee Associates will provide you with the strong support!

FINANCIAL DUE DILIGENCE(2020年01月25日)

llaassociates — 2020-01-15T15:16:16+0900

http://www.lla.cc/service/financial-due-diligence/

You may have a deep concern regarding the following issues:

√ Any significant tax risks?

√ Any illegal activities?

√ Any other unrecorded and contingent liabilities?

√ Any significant loopholes in corporate governance?

√ Any sound internal control policy in place?

√ All the assets recorded in accounts still exist?

√ Any impairment issues for the existing fixed assets?

√ Any provisions required for receivables and stocks?

√ Revenue not manipulated?

Our customized due diligence accounting can be conducted exactly according to your specific instructions, address all your concerns and provide you a full picture of your targeted local partner.

Are you looking for China gaap? Lee & Lee Associates will be your choice!

EMPLOYMENT CONTRACT(2020年01月24日)

llaassociates — 2020-01-15T15:15:45+0900

http://www.lla.cc/service/employment-contract/

You may have a Chinese employment contract template at your head office. However, you can expect many differences between it and a “should-be” employment contract as required by Chinese law. A well-structured employment contract can not only protect you and your employee’s interests, but also avoid any unnecessary penalties due to failure of compliance of prevailing Chinese labor laws and regulations.

Our experts who are versed in Chinese labor and tax laws can either draft an employment contract in Chinese for you from scratch or review your employment contract template and update it to a customized version for your company and employee to sign.

Are you looking for China gaap? Lee & Lee Associates will be your choice!

DOING BUSINESS IN ASIA PACIFIC REGION NEWSLETTER SERIES(2020年01月23日)

llaassociates — 2020-01-15T15:15:18+0900

http://www.lla.cc/service/doing-business-in-asia-pacific-region-newsletter-series/

Are you looking for sox 404 top down risk assessment? Asia Pacific region is the most dynamic investment destination. If you want to invest in the region but don’t know how, please click the link below to find the information you need. This is a series of newsletters: the first issue is “Establish a Business in Asia Pacific Region”, the second issue is “Tax System Snapshot in Asia Pacific Region”, the third issue is “Privileged Tax Policies in Asia Pacific Region”, and the fourth issue is “Hiring People in Asia Pacific Region”. More interesting topics will follow up regularly. Please kindly pay close attention. Thank you.

Are you looking for China gaap? Lee & Lee Associates will be your choice!

CAPITAL VERIFICATION(2020年01月22日)

llaassociates — 2020-01-15T15:14:52+0900

http://www.lla.cc/service/capital-verification/

Are you doing business in shanghai? According to Chinese law, all Foreign Invested Enterprises (“FIEs”) should provide capital verification reports to the Administration of Industry and Commerce (“AIC”), State Administration of Foreign Exchange (“SAFE”), Tax Authority, etc., after their registered capital are injected. The injected capital can be in form of cash, tangible assets, or intangible assets.

Our practicing certified public accountants can interview your finance personnel, coach them in providing necessary documents and issuing high quality capital verification reports.

Are you looking for China gaap? Lee & Lee Associates will be your choice!

BUSINESS SETUP IN CHINA(2020年01月21日)

llaassociates — 2020-01-15T15:14:21+0900

http://www.lla.cc/service/business-setup-in-china/

Our business service professionals are familiar with the procedures of China business setup , whether the business you intend to set up is a representative office, a joint venture or a wholly foreign owned enterprise. We can advise you on the suitable strategy to set up your business from the very first step in China.

Are you setting up a company in China? Lee & Lee Associates will provide you with the strong support!

BUSINESS PLAN(2020年01月20日)

llaassociates — 2020-01-15T15:13:43+0900

http://www.lla.cc/service/business-plan/

The professionals of Lee & Lee Associates can help you prepare a Custom Business Plan to achieve your finance and management goals.

Are you setting up a company in China? Lee & Lee Associates will provide you with the strong support!

BUSINESS DEREGISTRATION(2020年01月19日)

llaassociates — 2020-01-15T15:13:15+0900

http://www.lla.cc/service/business-deregistration/

There are a number of government bodies you need to go through if you want to deregister a business. The period of business deregistration generally would normally range from 3 months to half a year or even longer due to complicated procedures.

Of these government bodies, the tax authority is most critical. The tax authority will go to your company to conduct a full tax audit from the date of inception of the company until its field work date. All vouchers, ledgers, financial statements, contracts, tax filings documents, tax payment receipts, etc., must be provided for its review. Any questions from the tax authority should be promptly explained. Any discrepancy from tax rules may result in repayments, fines or penalties due to your noncompliance.

As a deregistration of company, we can work with your accounting staff, handle liquidation committee, and coordinate various government relationships to smoothly withdraw you from a non-performing business.

Are you setting up a company in China? Lee & Lee Associates will provide you with the strong support!

BUSINESS ANNUAL FILING(2020年01月18日)

llaassociates — 2020-01-15T15:12:43+0900

http://www.lla.cc/service/business-annual-filing/

Annual filing services are required to conduct business annual filings to different government bodies, including the Administration of Industry and Commerce (“AIC”), State Administration of Foreign Exchange (“SAFE”) and Customs, etc.

We can work independently or together with your accounting and business department to take care of these annual business filings.

Are you setting up a company in China? Lee & Lee Associates will provide you with the strong support!

AUDITING(2020年01月17日)

llaassociates — 2020-01-15T15:11:49+0900

http://www.lla.cc/service/auditing/

With extensive local expertise, we can ensure a smooth statutory audit and its compliance being successfully completed in a timely manner.

Our experienced professionals can assist you in preparing financial statements by sorting out the differences between the PRC GAAP and IFRS and then propose GAAP adjustments on statutory accounts.

4. US GAAP Audit
US GAAP audit represents a set of accounting rules used to prepare financial statements for publicly traded companies and many private companies in the United States. In order to cope with the sophisticated capital market over the past one hundred years, US GAAP has been evolved to one of the most comprehensive GAAPs in the world and is still being frequently updated. Yet, the complexity of US GAAP caused lots of difficulties for accountants in understanding and applying proper principles and accounting treatments.

Are you looking for establishment services? We have experienced US CPAs who once worked with big 4 accounting firm over 10 years. We therefore can act either as an advisor to help you prepare your 10K or 10Q financial statements and notes in compliance with the rules of SEC and Sarbanes-Oxley Act 404, or as an auditor to audit your financial statements for your consolidation purpose or filing purpose.

Are you looking for China gaap? Lee & Lee Associates will be your choice!

PRC ACCOUNTING SYSTEM(2020年01月16日)

llaassociates — 2020-01-15T15:11:16+0900

http://www.lla.cc/knowledge-center/technical-center/accounting/prc-accounting-system/

What is role of the Accounting Law of the PRC?
Published on 2018-05-14
The Accounting Law of the PRC (revised on 1 July 2000) has highest authority on accounting sector in China. It sets out general accounting principles for all enterprises, including the nature and role of accounting, China social security number and basic principles. It empowers the Ministry of Finance of PRC to administer accounting affairs and to establish uniform accounting regulations […]

What are the major differences between PRC accounting system and those in other countries?
Published on 2018-05-14
In establishing your company’s accounting structure, one of the first tasks is to identify and to reconcile the differences in accounting practices used by your parent company and the rules in China. The PRC does not exactly follow international accounting policies and guidelines, although it is moving on this direction and so far, many of the […]

What is Chinese Accounting Standards (CAS)?
Published on 2018-05-14
The Ministry of Finance (“MOF”) has been for a long time working to develop a set of Chinese Accounting Standards that are largely in line with International Financial Reporting Standards (“IFRS”). The MOF issued its first Standard in 1997. To date, 17 standards have been adopted and others are still under preparation. A complete list […]

How is the Accounting System for Business Enterprises of PRC prepared?
Published on 2018-05-14
In January 2001, the Ministry of Finance (“MOF”) adopted a comprehensive Accounting System for Business Enterprises (“the System”). The System is based, partially, on the experience of the MOF in implementing the Accounting System for Joint Stock Limited Enterprises and, partially, on the existing individual Chinese Accounting Standards (“CAS”) issued over the past few years.

Which system should joint stock limited enterprises follow?
Published on 2018-05-14
Starting 1 January 2001, all joint stock limited enterprises (“JSLEs”) were required to follow the System – except enterprises in banking, insurance, and other specialised financial industries. When the System became effective on 1 January 2001, the old Accounting System for JSLEs was abolished. Starting from 2001, enterprises besides JSLEs have been encouraged to follow […]

Is the Accounting System applicable to FIEs?
Published on 2018-05-14
As of 1 January 2002, the MOF extended the applicable scope of the System to all foreign invested enterprises excluding those in banking, insurance, and other financial service industry.

What is the accounting system for financial institutions?
Published on 2018-05-14
Early in 2002, the MOF issued a new separate – though similar – accounting system for Financial Institutions. It must be adopted, starting 1 January 2002, by all listed and foreign invested banks, insurance companies, brokerages, leasing companies, and finance companies. Unlisted financial institutions that are joint stock limited enterprises are encouraged to follow the […]

What are the differences between the Accounting System and Accounting Standards?
Published on 2018-05-14
While both are formulated and promulgated by MOF, there exist certain differences them. First, the application scope is different. Specific accounting standards are mostly applicable to joint stock limited companies, although sometimes the standards apply to other enterprises too. The Accounting System applies not only joint stock limited companies, but also other qualified enterprises. Second, […]

What are the four basic accounting assumptions in China?
Published on 2018-05-14
(a) Accounting Entity An accounting entity can be an enterprise, an enterprise group or the accounting department of an enterprise. (b) Continuity Postulate The Accounting System stipulates that, under normal circumstances, the accounting treatment to be adopted by enterprises should be based on continuity postulate. For instance, the historical costing method is used for the […]

What are the basic principles of accounting in China?
Published on 2018-05-14
The general principles guiding and evaluating accounting work comprise three categories. general principles for evaluating the quality of accounting information; general principles for recognizing and measuring accounting elements; and general principles for revising the above two sets of principles.

Are you setting up a company in China? Lee & Lee Associates will provide you with the strong support! To learn more about m&a financial due diligence, please contact us!

WHAT ARE THE MAIN DIFFERENCES BETWEEN PRC GAAP, IFRS AND US GAAP?(2020年01月15日)

llaassociates — 2020-01-15T15:10:41+0900

http://www.lla.cc/knowledge/what-are-the-main-differences-between-prc-gaap-ifrs-and-us-gaap⑵/

Chinese accounting standards vs US gaap

PRC GAAP（New Accounting Standard for Enterprises issued by Ministry of Finance of P.R.C on Feb.15, 2006）IAS/IFRSUS GAAP
InventoryUse of LIFO to calculate inventory delivery cost is prohibited.
Inventory provisions confirmed in earlier stage can be reversed back when the price rises in the later stage.

–Use of LIFO permitted. Reversal of write-down is prohibited.
Long-term investments in equity securitiesWrite-down recognised in income statement.

Investment in branches is accounted by cost method; investment in affiliated companies or joint ventures is accounted by equity method

It is not specified on the operation / assets in joint control.

The parties of joint ventures can only adopt equity method for the investment in joint ventures in consolidatedstatements

Measured at fair value with value changes recognised either (a) in income statement or (b) in equity until the investment is sold.

In the separate financial statements of parent company, cost method or IAS39 is adopted to account equity investment in subsidiaries, affiliated companies or joint ventures.

Regulation: IAS31

Parties of joint ventures can adopt proportionate consolidation method or equity method for investment in joint ventures in consolidated statements.

Same as IFRS
Long-term investments in debt securitiesIf it is categorized in “hold-to-maturity investment”, amortizedcost minuses possible Impairment measurement. If it is categorized in investment “for the sold”, it is measured by fair value and the value change is included in equity until it is sold.If classified as held to maturity, measured at amortised cost subject to impairment. If classified as available for sale, measured at fair value with value changes recognised either (a) in income statement or (b) in equity until the investment is sold.Same as IFRS
Fixed assets (exclude investment real estate)Only cost mode is allowed.Cost mode and evaluation mode are both allowed.–
Measurement of investment real estateInvestment real estate can adopt both cost mode and fair value mode to measure. Fair value mode doesn’t do accrual depreciation, but does impairment test regularly.Revaluated price or lower price in historical cost can be adopted.
Lease of the land use right can choose to be included in investment real estate, but fair value mode must be adopted to include it in investment real estate.

Same as PRC GAAP

Property, plant, and equipment received as a capital contribution from ownersMeasured at an amount agreed by all investing parties.Fair valueFair value
Profit or loss on disposal of fixed assetsPresented as a non-operating gain or loss.Included in operating profit or loss.Similar to IFRS

Are you looking for China gaap? Lee & Lee Associates will be your choice!