US GAAP vs. PRC GAAP.pptVIP

US GAAP vs. PRC GAAPComparison Framework for Financial Reporting US GAAP SFAS, FASB Interpretations, APB Opinions and ARB FASB Technical Bulletins, EITF AICPA Industry Audit and Accounting Guides, AICPA Statements of Position SEC SAB PCAOB standards PRC GAAP Financial Accounting and Reporting Rules for Enterprises (FARR) Accounting Standards for Business Enterprises Accounting System for Business Enterprises (ASBE) Accounting Systems for Various Industries MOF Interpretations, Implementation Guides Major Areas of GAAP Differences Inventories Investment Consolidation Assets held for sales Amortization of intangible assets Land use Rights Assets impairment Pre-operating Expenses Effects on changes in foreign exchange rates Major Areas of GAAP Differences Borrowing Costs Quantifying Contingencies Revenue Recognition Subsidy income Income Taxes Appropriated Staff Welfare and Bonus Funds Cash Flow Statement Presentation Inventories US GAAP Inventories to be stated at the lower of cost and market value ( market is the lower of replacement cost and NRV minus normal profit margin). Reversal of inventory write downs is prohibited. Write down for LCM is recorded in cost of goods sold PRC GAAP Inventories to be stated at the lower of cost and net realizable value. Reversal of inventory write-downs required if certain criteria are met LCM provision is recorded in G A expenses Investment consolidation US GAAP Consolidation, equity, and cost methods applied based on definitions of control and significant influence Consolidate special purpose entity based on equity risk Variable Interest Entities (VIE) should be consolidated according to FIN 46 PRC GAAP Consolidation of controlled subsidiaries is optional for some subsidiaries Assets held for sales US GAAP long-lived assets to be disposal by sale shall be classified as held for sale The valuation of the assets shall be determined by the lower of its carrying value or the fair market value less any cost to s