Progress toward IFRS convergence in China

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14 Nov 2005

Representatives of the China Accounting Standards Committee (CASC) of the People's Republic of China and the International Accounting Standards Board (IASB) met in Beijing on 7 and 8 November 2005 to discuss a range of issues relating to the convergence of Chinese Accounting Standards (CASs) with International Financial Reporting Standards (IFRSs). At the conclusion of the meeting, the two delegations released a joint statement setting out key points of agreement, including the following: China stated that convergence is one of the fundamental goals of its standard-setting programme. China affirmed its intention that an enterprise applying CASs should produce financial statements that are the same as those of an enterprise that applies IFRSs. The IASB delegation acknowledged that convergence to IFRSs will take time, and how to converge with IFRSs is a matter for China to determine. During the past year, China has issued 21 Exposure Drafts.

CASC is currently working to finalise these and develop implementation guidance. Two more Exposure Drafts are nearing completion. China has also begun a review of its 16 existing CASs. As a result, China's Accounting Standards System for Business Enterprises is being developed with a view to achieving convergence of those standards with the equivalent IFRSs.
  • The IASB representatives applauded and expressed admiration for the enormous progress China has already made toward convergence with IFRSs.
  • The two delegations identified specific ways each could help the other in the future.
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