China accounting standards Essay Example | Topics and Well Written Essays - 750 words

China accounting standards - Essay Example The accounting standards determine the procedure for preparation of financial statements which produces information like business revenues, expenditure, net income, assets, liabilities and the wealth of the stakeholders. Overview: Chinese Accounting standards China has its own system of accounting standards that is maintained in the land of China. The accounting standards of China are composed basic standards, specific standards and application guidance. There are thirty-eight specific standards that are followed in the Chinese accounting standards. During the socialist period, the government of China was the sole owner of the industry. The accounting standards of China are unique as it developed during the socialist regime and is tailor made to the objectives of the Chinese economy. The Chinese accounting standards are intended to focus less on the information of profit and loss. The accounting standards differ from the western accounting standards in terms of providing guideline on information on inventory of the industries. In comparison to the western accounting standards, the Chinese accounting standards are intended less towards accounting of debt of a corporation (Coulaud,  Schulz and  Debilliers, 2008). ... Moreover, the Chinese economy underwent reforms and achieved rapid progress in industrial development. This created the need of revising the accounting standards of China in order to create a competitive ground with the international accounting standards. In 2006, the government of China passed a new accounting law in joint consultation with the ministry of finance, the international accounting standards committee and the representative from the Chinese economy. With a view towards the emerging scenario of integration of international trade with the Chinese trade, the accounting standards of China adopted several standards recommended by the International accounting standards board. In order to align the information on the business performance of China through financial statements and reports and to allow a platform for comparison of the Chinese business with the top listed companies all over the world, the accounting standards of China adopted several features of the international a ccounting standards. The financial reporting procedure was replaced by the international financial reporting standards. The financial reporting criteria helped to compare the financial statements of the Chinese company with the rest of the world which added a significant feature in the era of globalization (Avery,  Zhu and  Cai, 2009). The alignment of the financial reporting standards adopted by China to the International accounting standards is about 95%. Impacts of changes in Chinese accounting standards The changes in the accounting standards of China for preparation of financial statements and accounts have created major impacts on the ways on financial accounting and generating annual reports of the Chinese companies. His has also paved the path of

Strategic Alliance between two companies Essay Example | Topics and Well Written Essays - 2000 words - 2

Strategic Alliance between two companies - Essay Example Consequently, the company sets up a strategic alliance with the latter that already has an established distribution network in the desired country of trade. This is a beneficial arrangement for both as the former company is able to expand its distribution network and the latter can improvise its existing product lines (Papageorgiou, Rotstein and Shah, 2001). The benefits that a company derives from a strategic alliance are the ability to hedge against uncertain and unprofitable situations, tap the potential of a new market, increase the knowledge base and obtain access to exclusive and critical information, which in turn strengthens its competitive position in the international market. A company is able to minimise on the transaction and distribution costs by way of engaging in strategic alliance. A strategic alliance also enables a company to be prompt and effective in pursuing an opportunity and to obtain resources that are absent. A company stabilises its resource base by leveragi ng the knowledge and resource base of the other. As a result, the company is able to gain easier access in the new markets and face lesser barriers to entry during an expansion plan. Strategic alliances, however, has to be formed in a very careful manner as these often fall through owing to mistrust between the two partners, especially when a large amount of competitive or exclusive information is involved. The benefits that a company derives from a strategic alliance are the ability to hedge against uncertain and unprofitable situations.