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TABLE OF CONTENTS CHAPTER I GENERAL PROVISIONS CHAPTER II BASIC REQUIREMENTS CHAPTER III BALANCE SHEETS CHAPTER IV PROFIT STATEMENTS CHAPTER V STATEMENTS OF CHANGES IN THE OWNER'S EQUITIES CHAPTER VI NOTES CHAPTER I GENERAL PROVISIONS Article 1. For the purposes of regulating the presentation of financial statements and ensuring the commensurability between the financial statements of a same enterprise in different periods and between the financial statements of other enterprises in a same period, these Standards are formulated in accordance with the Accounting Standards for Enterprises-Basic Standards. Article 2. The term "financial statements" are structural reports about the financial status, business performances and cash flows of an enterprise. The financial statements shall at least comprise the following parts: (1) The balance sheet; (2) The profit statement; (3) The cash flow statement; (4) The statement of changes in the owner's equities (or shareholder's equities, the same below); and (5) The notes. Article 3. The preparation and presentation of a cash flow statement, and the special presentation requirements in other accounting standards shall be governed by the Accounting Standards for Enterprises No. 31-Cash Flow Statement and other relevant accounting standards. CHAPTER II BASIC REQUIREMENTS Article 4. An enterprise shall, on the basis of going concern, recognize and measure the actually occurred transactions and events pursuant to the Accounting Standards for Enterprises-Basic Standards and the provisions of other accounting standards, and then prepare financial statements. No enterprise may replace the recognition and measurement by the note disclosure. If it is no longer reasonable to prepare financial statements on the basis of going concern, the enterprise shall prepare financial statements by adopting other basis and shall disclose this fact in its notes. Article 5. The items presented in financial statements shall be kept the same in different accounting periods. They shall not be changed randomly except for the following circumstances: (1) The accounting standards require to change the presentation of the items of the financial statements; and (2) The nature of the business operations of an enterprise is changed significantly and it is able to provide more reliable and more relevant accounting information to change the presentation of the items of the financial statements. Article 6. Items with different nature or function shall be separately presented in financial statements, excluding those of no importance. For items with similar nature or function, if the category in which they fall is of importance, they must be separately presented in the financial statements. The term "importance" means that an item is of significance when the omission or false reporting thereof may affect the economic decision-making of the user on the basis of it. The importance shall, in light of the environment in which the enterprise is situated, be judged on the basis of the nature and amount of the item. Article 7. The amounts of the items of assets and liabilities, incomes and expenses in the financial statements shall not offset against each other, unless it is otherwise provided for in other accounting standards. The presentation of net amount of an asset item less the impairment provision is not an offset. The presentation of the net amount of any gain or loss brought about by any non-routine activity less the expenses is not an offset. Article 8. The presentation of financial statements of the current period shall at least provide comparative data of all items in the previous comparative period, as well as the explanations about the understanding of the financial statements of the current period, unless it is otherwise provided for in the accounting standards. In accordance with provisions of Article 5 of these Standards, if the items presented in the financial statements change, an adjustment shall be made to the comparative date of the previous period according to the presentation requirements of the current period, and the reason and nature of the adjustment, as well as the adjustment amount to each item shall be disclosed in the notes. If it is not feasible to adjust the comparative data of the previous period, the reason for failure of adjustment shall be disclosed in the notes. The term "infeasibility" means that an enterprise is still unable to adopt a certain provision after it makes all reasonable efforts. Article 9. An enterprise shall, in the eye-catching place of the financial statements, disclose the following items: (1) The name of the presentation enterprise; (2) The balance sheet date or the accounting period covered by the financial statements; (3) The unit of RMB amount; and (4) If the financial statements are consolidated financial statements, an indication shall be given. Article 10. An enterprise shall at least prepare financial statements on a yearly basis. If the period covered by the annual financial statements is shorter than 1 year, the period covered by the annual financial statements and the reason for being shorter than 1 year shall be disclosed. In addition, if an enterprise offers interim financial reports to outsiders, it shall comply with the Accounting Standards for Enterprises No. 32-Interim Financial Reports. Article 11. An item which is required to be separately presented under these Standards shall be separately presented. For an item which is required to be separately presented under other accounting standards, an item to be separately presented shall be added. CHAPTER III BALANCE SHEETS Article 12. The assets and liabilities shall be presented as current and non-current assets and liabilities, respectively. For the assets and liabilities of a financial enterprise, if a presentation based on liquidity provides information that is reliable and more relevant, the assets and liabilities may be presented on the basis of the liquidity order. Article 13. Where an asset satisfies any of the following conditions, it shall be put into the category of current assets: (1) It is expected to be realized, sold or consumed within a normal operating cycle; (2) It is primarily held for trading; (3) It is expected to be realized within 1 year as of the balance sheet date (including one year, the same below); or (4) It is cash or cash equivalent, which is subject to no limitation when it is used to exchange other assets or to pay off the liabilities as of the balance sheet date. Article 14. The assets other than current assets shall be put into the category of non-current assets and shall be presented on the basis of their respective nature. Article 15. A liability which satisfies any of the following conditions shall be put into the category of current liabilities: (1) It is expected to be repaid within a normal operating cycle; (2) It is primarily held for trading; (3) It should be repaid at maturity within one year as of the balance sheet date; or (4) It is a liability for which the enterprise does not have an unconditional right to defer payment beyond a year after the balance sheet date. Article 16. The liabilities other than current liabilities shall be put into the category of non-current liabilities and shall be presented on the basis of their nature. Article 17. For a liability which becomes mature within 1 year as of the balance sheet date, if the enterprise expects that it can independently extend the repayment obligation by 1 year or more after the balance sheet date, it shall put this liability into the category of non-current liabilities. If it expects that it is unable to independently extend the repayment obligation, even if an agreement on the re-arrangement of the repayment plan is signed during the period after the balance sheet date but prior to the approval date of the financial reports, it shall still put this liability into the category of current liabilities. Article 18. If a liability has become payable on demand because an enterprise has breached an undertaking under a long-term loan agreement, it shall be put into the category of current liabilities. The liability is classified as non-current if the lender has agreed, on or before the balance sheet date, to provide a period of grace ending 1 year or more after the balance sheet date, within which the entity can rectify the breach and during which the lender cannot demand immediate repayment. Where any other long-term liability is under a similar circumstance, it shall be treated in accordance with the provisions of the preceding 2 paragraphs. Article 19. The category of assets in the balance sheets shall at least separately present the items reflecting the following information: (1) Money; (2) Receivables and advance payments; (3) Transaction investments; (4) Inventories; (5) Held-to-maturity investments; (6) Long term equity investments; (7) Investment real estates; (8) Fixed assets; (9) Biological assets; (10) Deferred income tax assets; and (11) Intangible assets. Article 20. The category of assets in the balance sheets shall at least include aggregate items of current assets and non-current assets. Article 21. The category of liabilities in the balance sheets shall at least separately present items reflecting the following information: (1) The short-term borrowings; (2) The payables and advance receipts; (3) The payable taxes; (4) The payable employees' wages and salaries; (5) The expected liabilities; (6) The long term borrowings; (7) The long term payables; (8) The payable bonds; and (9) The deferred income tax liabilities. Article 22. The category of liabilities in the balance sheets shall at least include the aggregate items of current liabilities, non-current liabilities, and liabilities. Article 23. The category of the owner's equities in the balance sheets shall at least separately present the items reflecting the following information: (1) The paid-in capital (capital stock); (2) The additional paid-in capital; (3) The surplus reserves; and (4) The undistributed profits. In the consolidated balance sheets, the interests of minority shareholders shall be separately presented within the category of equities. Article 24. The category of equities in the balance sheets shall include the aggregate items of the owner's equities. Article 25. The balance sheets shall present the total of the asset items, total of liability items and total of items of the owner's equities. CHAPTER IV PROFIT STATEMENTS Article 26. The expenses shall, on the basis of their functions, be classified into costs, administrative expenses, sales expenses and financial expenses incurred in business operations. Article 27. The profit statements shall at least separately present the items reflecting the following information: (1) The business income; (2) The business costs; (3) The business taxes; (4) The sales expenses; (5) The administrative expenses; (6) The financial expenses; (7) The investment gains; (8) The profits and losses on the changes in fair value; (9) The losses on the asset impairment; (10) The profits and losses on the disposal of non-current assets; (11) The income tax expenses; and (12) The net profits. A financial enterprise may present the items in the profits according to its particularities. Article 28. In the consolidated profit statements, an enterprise shall, below the item of net profits, separately present the profits and losses attributable to the parent company and the profits and losses attributable to the minority shareholders. CHAPTER V STATEMENTS OF CHANGES IN THE OWNER'S EQUITIES Article 29. The statements of changes in the owner's equities shall reflect the increases and decreases in the current period as integrate parts of the owner's equities. The changes in the owner's equities, which result from the profits and losses in the current period, the gains and losses directly recorded in the owner's equities, as well as the capital transactions with the owner (or shareholder, the same below), shall be presented respectively. Article 30. The statements of changes in the owner's equities shall at least separately present the items reflecting the following information: (1) The net profits; (2) The items of gains and losses directly recorded in the owner's equities, and the total of the said items; (3) The accumulative amount affected by changes in accounting policies and estimates‚ and correction of errors; (4) The capital invested by the owners and the profits distributed to the owners; (5) The surplus reserves made according to the relevant provisions; and (6) The information about the balance of the paid-in capital (stock capital), additional paid-in capital, surplus reserves, and the undistributed profits at the beginning and at end of the period, and the adjustments made to them. CHAPTER VI NOTES Article 31. The notes are verbal descriptions or detailed materials about the items presented in the balance sheets, profits statements, cash flow statements and statements of changes in the owner' s equities, as well as the explanations about the items which are not presented in these statements. Article 32. The notes shall disclose the basis for the preparation of financial statements. The relevant information in the notes shall be cross-referenced with the items presented in the balance sheets, profits statements, cash flow statements and statements of changes in the owner' s equities. Article 33. Generally, the notes shall make disclosures in the following sequential order: (1) The basis for the formulation of financial statements; (2) The declaration about compliance with the accounting standards for enterprises; (3) The explanations about the important accounting policies, including the basis for measurement of items of the financial statements, and the basis for the determination of accounting policies; (4) The explanations about the accounting estimates, including the basis for the determination of the accounting estimates which may result in a significant adjustment to the carrying amount of the assets or liabilities in the next accounting period; (5) The explanations about the changes in accounting policies and estimates‚ and correction of errors; (6) The more detailed explanations about the important items presented in the balance sheets, profit statements, cash flow statements and statements of changes in the owner's equities, including the amount of the profit after the termination of business operations and its composition; and (7) The contingencies and commitments, non-adjustment events occurring after the balance sheet date, relationship of connected parties and their transactions, and other items that require explanation. Article 34. An enterprise shall, during the period after the balance sheet date but before the financial statements are authorized for issue, disclose the total amount of dividends and the related amount per share it proposes or declares to distribute (or the total amount of profits to be distributed to investors). Article 35. If an enterprise fails to disclose the following items along with other information given in the financial statements, it shall disclose them in its notes: (1) Its registered place and organizational form, and the address of its headquarters; (2) The nature of its business operations, and its principal activities; and (3) The name of its parent company and the ultimate parent company of the group. |
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