The Chinese accounting framework is commonly referred to as:

• the Chinese Accounting Standards (CAS) or
• the Chinese Generally Accepted Accounting Principles (Chinese GAAP).

IFRS: allows the use of both the historical cost method and the possibility of re-evaluating the asset(s).

Chinese GAAP: Companies can only use the historical cost method to valuate fixed and intangible assets.

Since the historical cost method does not allow for the re-evaluation of assets, which means there is the possibility for impairment losses of certain long-term assets, such as property, plant and equipment, intangible assets, investments (other than financial assets) and investment property.

IFRS: The company’s fiscal year can start at any point throughout the year provided that it encompasses a period of 12 consecutive months.

Chinese GAAP: must start from January 1st and no exceptions are provided.

IFRS: Expenses are classified by nature.

Chinese GAAP: Expenses are classified according to function.