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	ACCOUNTING STANDARDS FOR ENTERPRISES NO. 9-WAGES AND SALARIES OF EMPLOYEES

	(No. 3 of the Ministry of Finance February 15, 2006)


SUBJECT : ACCOUNTING; EMPLOYEES' REMUNERATION
ISSUING DEPARTMENT : MINISTRY OF FINANCE OF THE PEOPLE'S REPUBLIC OF CHINA
ISSUE DATE : 02/15/2006
IMPLEMENT DATE : 01/01/2007
LENGTH : 828 words
TEXT :

TABLE OF CONTENTS

CHAPTER I GENERAL PROVISIONS
CHAPTER II RECOGNITION AND MEASUREMENT
CHAPTER III DISCLOSURE

CHAPTER I GENERAL PROVISIONS

Article 1. For the purpose of regulating the recognition and measurement of the wages and salaries of employees, and the disclosure of the relevant information, these Accounting Standards are formulated in accordance with the Accounting Standards for Enterprises-Basic Standards.

Article 2. The term "employees' wages and salaries" refers to all kinds of remunerations and other relevant disbursements given by enterprises in exchange of the employees' services. The employees' wages and salaries include:

(1) The employees' wages, bonuses, allowances and subsidies;

(2) The employees' welfare expenses;

(3) The medical and insurance expenses, endowment insurance expenses, unemployment insurance expenses, work-related injury insurance expenses, childbirth insurance expenses and other social insurance expenses;

(4) The housing accumulation funds;

(5) The operating funds for labor unions and the operating funds for the education of employees;

(6) The non-monetary welfare benefits;

(7) The compensations for the cancellation of the labor relationship with the employees; and

(8) Other relevant disbursements for obtaining employees' services.

Article 3. The following items shall be governed by other relevant accounting standards:

(1) The annuity funds of enterprises shall be governed by the Accounting Standards for Enterprises No. 10-Annuity Fund of Enterprises; and

(2) The wages and salaries based on shares shall be governed by the Accounting Standards for Enterprises No. 11-Share-based Payment.

CHAPTER II RECOGNITION AND MEASUREMENT

Article 4. During the accounting periods of the employees' rendering services to an enterprise, the enterprise shall recognize the payable salaries and wages as liabilities. Except for the compensations for the cancellation of the labor relationship with an employee, it shall, according to beneficiaries of the services offered by employee, treat these wages and salaries thereof in light of the following circumstances:

(1) The employees' wages and salaries for producing products or providing services shall be recorded in the product costs and service costs;

(2) The employees' wages and salaries for any on-going construction project or for any intangible asset shall be recorded in the cost of fixed asset or cost of intangible asset; or

(3) The employees' wages and salaries other than those as mentioned in Items (1) and (2) shall be recorded in the profits and losses of the current period.

Article 5. During the accounting periods of the employees' rendering services to the enterprise, the enterprise shall calculate the medical and insurance expenses, endowment insurance expenses, unemployment insurance expenses, work-related injury insurance expenses, childbirth insurance expenses and other social insurance expenses, as well as the housing accumulation fund which it pays to its employees, on the basis of a certain proportion in the total amount of wages, and treat them pursuant to Article 4 of these Standards.

Article 6. If an enterprise cancels the labor relationship with any employee prior to the expiration of the relevant labor contract or puts forward any compensation proposal for the purpose of encouraging the employees to offer to accept a layoff, and the following conditions are met concurrently, the enterprise shall recognize the expected liabilities incurred due to the compensation for the cancellation of the labor relationship with the employees, and shall simultaneously record them in the profits and losses of the current period:

(1) Where the enterprise has formulated a formal plan on the cancellation of labor relationship or has put forward a proposal on voluntary layoff and will execute it soon.

This plan or proposal shall include the departments for which the employees to be laid off, posts and number of the employees to be laid off, the amount of compensations for the cancellation of labor relationship or for layoff as determined on the basis of the job categories or posts in accordance with the relevant provisions, and the planned time for the cancellation of labor relationship or layoff; and

(2) The enterprise is unable to unilaterally withdraw the plan on the cancellation of labor relationship or layoff proposal.

CHAPTER III DISCLOSURE

Article 7. An enterprise shall, in the notes, disclose the following information related to the employees' wages and salaries:

(1) The wages, bonuses, allowances, subsidies that shall be paid to the employees, and the period end accrued amounts;

(2) The medical and insurance expenses, endowment insurance expenses, unemployment insurance expenses, work-related injury insurance expenses, childbirth insurance expenses and other social insurance expenses that shall be paid by the enterprise for its employees, as well as the period end accrued amounts;

(3) The housing accumulation fund that shall be paid by the enterprises for its employees, as well as the period end accrued amounts;

(4) The non-monetary welfare benefits provided for the employees, as well as the calculation basis;

(5) The compensation that shall be paid due to the cancellation of the labor relationship, and the period end accrued amount; and

(6) Other wages and salaries of employees.

Article 8. The contingent liabilities incurred due to the fact that the number of the employees who offer to accept the layoff proposal is uncertain, the compensation standards, etc. shall be disclosed in accordance with the Accounting Standards for Enterprises No. 13-Contingencies.