Companies in China generally prepare their statutory financial statements under PRC GAAP, mainly the Accounting Standards for Business Enterprises (ASBE) issued by the Ministry of Finance. China’s enterprise accounting standards are substantially converged with IFRS, but they are still a separate domestic reporting framework rather than pure IFRS.
Under China’s Company Law, a company must establish a financial and accounting system and prepare financial reports at the end of each fiscal year in accordance with laws, administrative regulations, and the rules of the finance department under the State Council.
From a compliance perspective, taxpayers engaged in business operations must keep accounting books and vouchers, conduct accounting based on valid supporting documents, and submit financial and accounting statements to the tax authorities as required.
For foreign investors, foreign-invested enterprises in China mainly take the form of companies or partnerships, so their accounting and reporting obligations are generally embedded in the same domestic legal framework.
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