Chinese accounting standards are the accounting rules used in Chinese state owned corporations in mainland China. They are currently being phased out in favour of Generally Accepted Accounting Principles or International Accounting Standards. Accountancy (British English) or accounting (American English) is the process of maintaining, auditing, and processing financial information for business purposes. ... The highlighted area in the map is what is commonly known as mainland China. Mainland China (Simplified Chinese: 中国大陆; Traditional Chinese: 中國大陸; pinyin: Zhōnggúo Dàlù; literally The Chinese Massive Landmass or Continental China) is an informal (disputed — see talk page) geographical term which is usually synonymous with the area... Generally Accepted Accounting Principles (GAAP) is the standard framework of guidelines for financial accounting. ... International Financial Reporting Standards (IFRS), often known by the older name of International Accounting Standards (IAS) are a set of accounting standards. ...

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 are less a tool of profit and loss and an inventory of assets available to a company. In contrast to a Western balance sheet, Chinese accounting standards do not include an accounting of the debts that a corporation holds, and are less suitable for management control than for accounting for tax purposes. A balance sheet, in formal bookkeeping and accounting, is a statement of the book value of a business or other organization or person at a particular date, often at the end of its fiscal year, as distinct from an income statement, also known as a profit and loss account (P... For other uses, see Debt (disambiguation). ...

This system of accounting is widely considered to be unsuitable for managing corporations in a market economy. As a result, Chinese corporations are gradually moving toward International Accounting Standards. This has proven to be a massive undertaking. One consequence of this system is that Chinese companies who offer shares for sale in the United States must prepare three sets of statements, one using Chinese accounting standards, one using international standards, and one using North American GAAP standards. A market economy (aka free market economy and free enterprise economy) is an economic system in which the production and distribution of goods and services takes place through the mechanism of free markets guided by a free price system rather than by the state in a planned economy. ... Generally accepted accounting principles (GAAP) are the accounting rules used to prepare financial statements for publicly traded companies and many private companies in the United States. ...