CHINA does not intend to copy wholesale the International Accounting Standards (IAS) when it sets up a comprehensive set of 30 practical accounting guidelines within the next three years, says the main drafter. ''We will take IAS as a reference in internationalising our accounting and bring our accounting standards in line with the IAS to the extent possible,'' said Professor Yang Jiwan, executive vice-chairman of the Accounting Society of China. But he added that because the IAS did not completely fit China's specific environment or cover all economic transactions taking place in the country, reference to them would only be to a limited extent. He said, however, that because the IAS was being amended, China would examine the changes to see that domestic practices were consistent with international practices. Mr Yang said under the fourth phase of accounting reforms to set up a system comparable to international practices, China would set out 30 accounting standards, which would cover: Standards for accounting elements, such as investment, inventories, fixed assets, intangible assets, owners' equities and revenue. Standards for financial statements, such as balance sheet, income statement, cash-flow statement and consolidated financial statement. Standards for specific transactions, such as foreign exchange transactions, liquidation and bankruptcy, research and development, long-term contracts, business combinations, lease and hire purchase transactions, and accounting for pension schemes. ''We plan to develop about 30 practical accounting standards,'' said Mr Yang at the Sixth Annual Conference of Accounting Academics yesterday. He said despite the shortcomings, the industry-based accounting regulation should be retained for some time because there were many state-owned enterprises, whose operations were still bound by national policies and laws. ''Management by industry is more distinct than in Western countries, and differences among industries are also greater. Management by industry will be around for some time, although it will be eliminated in the long run,'' said Mr Yang. The accounting disparities among industries were significant, and it was difficult for accounting standards to deal with these regulations. Another reason for keeping the existing industry-based system was that the disparities of internal management among industries such as banks, transport, communications, electrical power, and other special industries, were much greater than the accounting authorities had anticipated. Mr Yang said the issue of new accounting standards did not mean compliance because the standards seemed abstract to the inexperienced Chinese accountants. ''We need to go further than issuing accounting standards. We need to find ways to explain these standards,'' he said.
