The financial reporting requirements of the People's Republic of China are mainly based on the Accounting Law and on standards and regulations issued by the Ministry of Finance. The description below relates particularly to the requirements for listed companies.

Chinese accounting may differ from that required by IAS because of the absence of specific Chinese rules on recognition and measurement in the following areas:

• uniting of interests IAS 22.8
• provisions in the context of acquisitions IAS 22.31
• employee benefit obligations IAS 19
• discounting of liabilities IAS 37.45
• the treatment of an issuer's financial instruments IAS 32.18/23
• the derecognition of financial assets IAS 39.69
• hedge accounting for derivatives IAS 39.142
• the treatment of the cumulative amount of deferred exchange difference on disposal of a foreign entity. IAS 21.37

There are no specific rules requiring disclosures of:

• a primary statement of changes in equity, except for joint stock limited enterprises IAS 1.7
• the fair values of financial instruments (except for listed investments) IAS 32.77
• the fair values of investment properties IAS 40.69
• discontinuing operations IAS 35
• diluted earnings per share IAS 33.47
• the current or FIFO cost of inventory, when LIFO is used. IAS 2.36

There are inconsistencies between Chinese and IAS rules that could lead to differences for many enterprises in certain areas. Under Chinese rules:

• certain subsidiaries with dissimilar activities can be excluded from consolidation IAS 27.14

• subsidiaries are excluded from consolidation if intended for sale, even if previously consolidated IAS 27.13

• for most business combinations accounted for using purchase accounting, the identifiable assets and liabilities of subsidiaries acquired are consolidated based on their book values IAS 22.40

• either provisions for major overhaul costs or deferral of incurred major overhaul costs are allowed SIC 23

• trading and derivative financial assets and liabilities are generally not held at fair value IAS 39.69/93

• proposed dividends are accrued IAS 10.11

• deferred tax accounting is uncommon and, when done, is calculated on the basis of timing differences, with the deferral method or the liability method allowed IAS 12

• the definition of extraordinary items is wider IAS 8.6/12

• certain disclosures relating to primary segments (e.g., acquisitions and depreciation of assets) are not required IAS 14.57/58

• there are no rules addressing the consolidation of special purpose entities. SIC 12

In certain enterprises, these other issues could lead to differences from IAS:

• under some circumstances, finance leases can be recognized at the undiscounted amount of minimum lease payments IAS 17.12
  
• there is no specific requirement for segment reporting to be prepared on the basis of the policies used for financial reporting. IAS 14.44