Consolidation

The applicable accounting rules in China are guided by the Chinese Accounting Standards (CAS), also commonly known as the Chinese Generally Accepted Accounting Principles (or PRC GAAP). Although the Chinese Accounting Standards maintain a high level of integration with internationally accepted accounting standards, such as IFRS, foreign investors must understand a number of core differences that exist. Please refer to our full article for a comparison between PRC GAAP and IFRS.

We offer our clients a variety of services to support them to understand the accounting and finances of their Chinese subsidiary, and we support as well with the conversion of the financial information of the Chinese subsidiary according to their group standards.
 
Ongoing Consolidation
With our team of qualified tax advisors and CPAs with vast exposure to internationally operating companies we are not only able to provide our clients with a full understanding of the finances of their Chinese subsidiary, but we also support to convert the Chinese financial statements according to their group reporting standards on a recurring basis. We offer our clients customized financial reporting packages which alleviate the need for the finance team abroad to translate the financial information of their Chinese subsidiary.
 
Conversion of Annual Audit to International Accounting Standards
Whereas we cooperate with our Chinese qualified CPA partners to provide bilingual audit reports, differences between the Chinese Accounting Standards and international accounting standards will continue to exist. Therefore, we rely on the expertise of our team of certified accountants to support with the conversion of the annual audit report into local accounting standards applied in the home country of our clients. As a member of the Moore Global Network, with offices in 113 countries, we can rely on a network of trusted CPAs to support with the conversion of the Chinese audit report into local accounting standards of virtually all countries around the world.
 
Group Component Audit
In addition to our support with consolidation of accounting and conversion of the annual audit, we also support our clients with the completion of documents for the component audit of the company. Based on the requirements from the headquarter and the component auditor, we coordinate with our local CPA partners and ensure all relevant information for the component audit is provided according to international standards.
 
Country-by-country reporting
A Country-by-Country report, also known as a CbC report, needs to be prepared by the ultimate holding company of a multinational group with consolidated financial statements of the past year exceeding EUR 750 million (equivalent to RMB 5.5 billion, or HKD 6.8 billion).
Constituent entities in Mainland China and those in Hong Kong may be subject to notify the tax administration in their respective jurisdiction if a Country-by-Country Report filing obligation arises, therefore it is important for internationally active companies to identify whether they are subject to any Country-by-Country filing requirements in China or Hong Kong. We advise our clients on CbC reporting and notification requirements, including:

  • Country-by-Country Reporting requirements in China.
  • Country-by-Country Reporting requirements in Hong Kong.