What are the issues involved in the implementation of a new accounting system?
Since 1 January 2002, FIEs have implemented the Accounting System for Business Enterprises promulgated by MOF on 29 December 2000, while the Accounting System for Foreign-invested Enterprises issued by MOF on 24 June 1992 and its related regulations on account titles and financial statements were nullified. Given below are certain issues concerning the implementation of the new accounting system. (a) If an FIE has to change its accounting policies as a result of implementing the Accounting System, all changes should be made using the prospective application except in the following circumstances where it is stipulated that the retrospective adjustment method is to be used: Provision for short-term investment write-down, and provision for impairment of long-term investment, fixed assets, intangible assets, construction in progress and designated loans. The difference between provision for bad debts on receivables and provision for inventory write-down under the new Accounting System and
