Chinese accounting standards are unique because they originated in a socialist period in which the state was the sole owner of industry.
Therefore, unlike Western accounting standards, they were less a tool of profit and loss, but an inventory of assets available to a company.
This was the fruit of considerable discussion and protracted debate, involving the Ministry of Finance, members of the International Accounting Standards Board (IASB) and representatives of some Chinese firms.
This revised law marked a large step forward for the continuing integration of world trade and capital markets, with China adopting a significant number of the accounting standards laid out by the International Accounting Standards Board.
However, since 2008 the U.S. Securities and Exchange Commission (SEC) allows foreign private issuers to use financial statements prepared in accordance with IFRS.