Does China follow international accounting practice?
China does not follow international accounting policies and guidelines, although it is moving in this direction for a while and with its accession to the World Trade Organization will be fully compliant within a few years. Many of the accounting regulations are the same or similar to international practice, however it is important for organizations in China to understand the differences. Tax deductibility for instance is different and a lack of understanding of this could lead to significant tax charges on such items as intercompany transactions. China treats transfer pricing with high importance and as with many other countries it wants its fair share of the international tax pie. Meanwhile proper planning and compliance can reduce an organizations tax burden. Another area where differences lie is in depreciation of capitalized assets. China specifies that companies must use the straight line method unless they obtain approval from the Ministry of Finance for use of an accelerated met
