China New Accounting Standards 2021

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Chinese enterprises will be required to adopt several revised accounting standards starting from January 2021. These revised standards concern mainly the recognition of revenue (“new CAS 14”) and the treatment of the financial leases in the financial statements. Enterprises which are listed in the stock markets and those adopting  International Financial Reporting Standards (IFRS) have already implemented these standards in previous years. From January 1st, 2021, these standards will be extended to all the enterprises in China which must adopt the Chinese Accounting Standards for Business Enterprises. New CAS 14 Revenue On July 5th, 2017, the Ministry of Finance issued the “Notice on Revising and Issuing the Accounting Standards for Business Enterprises No. 14 Revenue”, to be implemented from January 1st, 2018 by enterprises listed in China and abroad or those adopting the IFRS for their financial statements, from January 1st, 2020 by enterprises listed in China, and from January 1st, 2021 by other companies adopting the Accounting Standards for Business Enterprises. The New CAS 14 reforms the existing revenue recognition model, highlighting that the main criterion for the revenue recognition shall be the fulfilment of the obligations deriving from a contract and that the revenue shall be recognised when the client obtains control of the relevant goods or service. Enterprises operating in China, particularly the subsidiaries of foreign investors, shall consider the changes deriving from the introduction of the revised accounting standards and prepare to be in line with the new requirements. For further information or if you have any queries relating to the content of this communication, please contact us. CELIA Alliance CELIA Alliance members are identified here. Members of the CELIA Alliance are each independent law firms and do not practice law jointly with any other member of the CELIA Alliance. "CELIA Alliance" and "CELIA" are not trading names. For more information about the CELIA Alliance click here. Disclaimer Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this newsletter. For further legal information click here. Circular 230 disclosure To ensure compliance with requirements imposed by the IRS and other taxing authorities, we inform you that any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Copying If you would like to copy or otherwise reproduce this article then you may do so provided that: (1) any such copy or reproduction is for your own personal use or if it is made available to any third party it is done so on a free of charge basis; and (2) the article is reproduced in full together with the contact details, disclaimer and any logos as they appear on each article.