Managing Your Accounting & Bookkeeping in China - Preview

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Be it for tax filing, regulatory compliance or internal
tracking purposes, accounting is an important part
of any business. This is as true for a business in China
as it is anywhere else.
Relative to most of the world however, China has only
recently embraced themarket economy, andwith that
the practice of accounting. For this reason, some of the
accounting and bookkeeping
practices that are an everyday
occurrenceinChinamayseem
unusual to foreign investors
new to the country.
Despite these remaining
i d i o s y n c r a s i e s , Ch i n a
has come a long way in
converging its accounting
standards with international
practice. This significantly
simplifies the integration of
a foreign investor’s Chinese
subsidiary into itsmultinational groupof companies.
While the Chinese government is making steady
progress on its way to RMB internationalization,
strict capital controls continue to pose an obstacle.
As a means of controlling the currency flows into
and out of the country, the Chinese government
requires a special report from foreign-invested
companies about their foreign currency holdings.
Ultimately, foreign companies that do not comply
with this requirement may lose the ability to remit
foreign currency abroad. Therefore, keeping correct
records of one’s foreign currency transactions is
crucial.
In this issue of China Briefing,
we discuss the difference
between the International
Financial ReportingStandards,
and the accounting standards
ma n d a t e d b y C h i n a ’s
Ministry of Finance. We also
pay special attention to the
role of foreign currency in
accounting, both in remitting
funds, and conversion. Lastly,
in an interview with Jenny
Liao, Dezan Shira & Associates’ Senior Manager of
Corporate Accounting Services in Shanghai, we
outline some of the pros and cons of outsourcing
one’s accounting function.
This Month’s Cover Art
Flower or not by Ye Lan ( 叶阑 )
Oil on canvas, 150x100cm
YELAN Art Gallery
| +86 180 1609 3520
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© 2015 Asia Briefing Ltd.
Reference
China Briefing and related titles
are produced by Asia Briefing Ltd.,
a wholly owned subsidiary of
Dezan Shira Group.
Content is provided by
Dezan Shira & Associates.
No liability may be accepted for any
of the contents of this publication.
Readers are strongly advised to seek
professional advice when actively
looking to implement suggestions
made within this publication.
Introduction