A joint working group formed by the Chinese Ministry of Finance and the IFRS Foundation is exploring ways to expand the use of IFRS within China, especially for Chinese companies that are internationally oriented.
A joint statement of the Ministry of Finance and the IFRS Foundation, issued Tuesday, updates the 2005 Beijing joint statement, which led to Chinese Accounting Standards becoming substantially converged with IFRS.
In addition to forming the joint working group, the 2015 joint statement:
- Identifies a vision for Chinese Accounting Standards to become fully converged with IFRS.
- Encourages continued co-operation between the International Accounting Standards Board and Chinese stakeholders in the future development of IFRS.
In a speech last month, Michel Prada, chairman of the IFRS Foundation trustees, advocated for China to take further steps towards full convergence with IFRS.
“China has much to gain in doing so, in terms of international confidence in China’s capital market as well as Chinese leadership in establishing standards for global finance,” Prada said at an IFRS Foundation event in Beijing. “This is particularly true for Chinese companies that are highly internationally exposed and therefore have no difficulty dealing with international standards.”
—Ken Tysiac (ktysiac@aicpa.org) is a CGMA Magazine editorial director.