China drops IFRS reporting for listed companies

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13 Sep 2007

The China Securities and Regulatory Commission (CSRC) has withdrawn its requirement that companies listed on Chinese stock exchanges that issue 'B' shares must publish audited financial statements that conform to International Financial Reporting Standards (IFRSs) in addition to financial statements that conform to Chinese Accounting Standards (CASs).

'B' shares are equity securities that trade in US dollars in Shanghai and in Hong Kong dollars in Shenzhen and, until 2001, could not be purchased by residents of mainland China.

Currently, of the 1,477 companies listed on the Shanghai and Shenzhen Stock Exchanges, 109 have issued 'B' shares. In 2006, China adopted a completely new set of CASs that are based on and generally consistent with IFRSs, with a few exceptions. These new standards go into effect in 2007 for listed companies. The CSRC concluded that because CASs are similar to IFRSs, the dual reporting requirement is no longer necessary. The CSRC decision is reported in Zhengjian Kuaiji Zi[2007] No. 30 (PDF 144k, Chinese language, from CSRC Website).

Deloitte's comparison of the new CASs and IFRSs:

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