美国会计准则 中国会计准则 中国企业所得税简明对比表 (英文版).docx

Comparison between US GAAP, PRC GAAP and PRC Tax Part IMarch 20, 2012US GAAPPRC GAAPPRC TaxForm and Components of Financial Statements1. Balance Sheet 2. Income Statement 3. Statement of Cash Flows 4. Statement of Shareholder Equity 5. Notes to Financial Statements Similar to US GAAPCAS 30.2Annual Corporate Income Tax Return (13 forms)Related Party Transaction Forms(9 Forms)US GAAP does not require comparative information. However, SEC registrants are required to present balance sheets as of the end of the current and prior reporting periods and all other statements for the three most recent reporting periods.The presentation of financial statements of the current period shall at least provide the comparative data of all items of the previous comparative period, as well as the explanations on the understanding of the financial statements of the current period, unless it is otherwise provided for in other accounting standards. (CAS 30.8)No comparative information is required.SEC rules explicitly require subtotals for current assets and current liabilities (Regulation S-X, Rule 5-02) in balance sheet.Similar to US GAAP.The assets and liabilities shall be presented as current and non-current assets and liabilities, respectively. (CAS 30.12)N/AProperty, Plant and EquipmentProperty, plant and equipment is recognized initially at cost.Similar to US GAAP (CAS 4.7)Similar to US GAAP (CIT Law I/R 56)Property, plant and equipment is depreciated over its usful life.l Straight line methodl Declining balance methodl Sum-of-the-years-digits methodl Depreciation based on use (activity)Similar to US GAAP (CAS 4.17)Only deprecition computed by straight line method is deductible for CIT purpose. (CIT Law I/R 59) Temporary differenceAn item of property, plant and equipment is depreciated even if it is idle, but not if it is held for sale. Land is also not depreciated.Similar to US GAAP. Investment PropertyBuilding is not depreciated (a HFS asset) (CAS 4.14)Land is not depreciated. (CAS 4.14)Idle fixed assets (other than buildings) and fixed assets that is not related to business are not depreciated.Land accounted for as a fixed asset is not depreciated. (CIT Law 11)Estimates of useful life and residual value, and the method of depreciation are reviewed only when events or changes in circumstances indicate that the current estimates or depreciation method are no longer appropriate. Any changes are accounted for prospectively as a change in estimate. An enterprise shall, at least at the end of each year, have a check on the useful life, expected net salvage value, and the depreciation method of the fixed assets. (CAS 4.19)Similar to US GAAP (CAS 4.19)Residual value of fixed assets cannot be changed once determined.(CIT Law I/R 59)Subsequent expenditure is capitalized only when it is probable that it will give rise to future economic benefits.Similar to US GAAP (CAS 4.6)Comprehensive repair cost for fixed assets should be capitalized and amortized over no less than 3 years. (CIT Law 13, CIT Law I/R 70)The revaluation of property, plant and equipment is not permitted.Similar to US GAAP (CAS 4.6)Follow PRC GAAP (CIT Law I/R 56)The gain or loss on disposal is the difference between the net proceeds received and the carrying amount of the asset.Similar to US GAAP. In addition, relevant tax expenses are also deductible in computing the disposal gain or loss. (CAS 4.6)Disposal gain is taxable for CIT.Disposal loss needs to be reported to tax authority before deduction, if the disposed fix asset has reached or exceeded its useful life. Sales loss at fair value in normal business operations needs to be reported to tax authority before deduction.For other losses of fixed assets, the tax authoritys approval shall be required for deduction. (SAT Order 2011 No.25)Intangible Assets and GoodwillIntangible assets are measured initially at fair value.The intangible assets shall be initially measured according to its cost. (CAS 6.12)Follow PRC GAAP (CIT Law I/R 56)Intangible assets cannot be revalued.Similar to US GAAP (CAS 6.12)Follow PRC GAAP (CIT Law I/R 56)Goodwill is recognized only in a business combination and is measured as a residual. Similar to US GAAP CAS 20.13Follow PRC GAAPGoodwill and other intangible assets with indefinite useful lives are not amortized, but instead are subject to impairment testing at least annually.Reversal of impairment loss is not allowed.Similar to US GAAP CAS 6.19Similar to US GAAP CAS 8.17Intangible assets that are not related to business cannot be amortized. (CIT Law 12)Intangible assets with finite useful lives are amortized over their expected useful lives.Similar to US GAAP CAS 6.17Intangible assets should be amortized by straight line method over no less than 10 years or over contractual period.(CIT Law I/R 67)Subsequent expenditures on an intangible asset is not capitalized unless it can be demonstrated that the expenditure increases the utility of the asset.It only specifies subsequent expenditures on “R&D” projects. R-expense; D-capitalized (CAS 6.10)Borrowig cost could be capitalized.(CIT Law I/R 37)Both internal research and development expenditure is expensed as incurred. Special capitalization criteria apply to in-process R&D acquired in a business combination, direct-response advertising, software developed for internal use and software developed for sale to third parties.The research expenditures for its internal research and development projects of an enterprise shall be expensed in current period. (CAS 6.8)The development expenditures for its internal research and development projects of an enterprise may be capitalized as intangible assets (CAS 6.9)The tax position of self-developed intangible assets follows PRC GAAP (development) plus any expenditures to bring the assets to expected condition being ready for use. (CIT Law I/R 66)The following costs cannot be capitalized as intangible assets: internally generated goodwill, costs to develop customer list, start-up costs and training costs. Similar to US GAAP (CAS 6.11)Internally generated goodwill cannot be amortized. (CIT Law 12)Investment PropertyThere is no specific definition of investment property; such property is accounted for as property, plant and equipment unless it meets the criteria to be classified as “held for sale”. Investment property is property held to earn rental income or for capital appreciation, or both. (CAS 3.2) This standard shall apply to the following investment real estates:(1) The land use right which has already been rented;(2) The land use right which is held and prepared for transfer after appreciation; (3) The buildings which have already been rented. Rental income and capital appreciation are taxable for CIT.Investment property is recognized initially at cost.Similar to US GAAP (CAS 3.7)Follow PRC GAAP (CIT Law I/R 56)Subsequent to initial recognition all investment property is measured using the cost model.Generally cost model should be used.Fair value model is also possible when an active market exists and market price is available. (CAS 3.9)N/AN/AFor the investment real estate measured through the fair value model, there is no depreciation or amortization made for it. Its book value shall be adjusted on the basis of its fair value on the date of the balance sheet, and the difference between the fair value and its original book value shall be included in the current profits and losses.The revaluation of tax position of investment property is not permitted.(CIT Law I/R 56)Only sales or disposal gain (loss) is taxable (deductible) for CIT.Investment property is accounted for as property, plant and equipment, and there are no transfers to or from an “investment property” category.Where an enterprise which has well-established evidence to indicate that the purpose of the investment property has changed, it shall convert the investment property to other assets or vise versa. (CAS 3.13)Investment property is treated in the same way as “property, plant and equipment” as well as “land use right” in PRC tax.InventoryGenerally inventories are measured at the lower of cost and market.The inventories shall be initially measured at cost. (CAS 1.5)Where a non-monetary assets transaction satisfies the following conditions at the same time, the fair value of the assets received and relevant taxes shall be regarded as the transaction cost, and the difference between the fair value of the assets received and the carrying value of the asset transferred out shall be recorded into the profit or loss of the current period:(1) The transaction is commercial in nature; and(2) The fair value of the assets received or transferred out can be measured reliably. (CAS 7.3)1. For the inventory acquired by cash payment, its purchase price and the relevant taxes and expenses paid shall be used as its cost; 2. For the inventory acquired through means other than cash payment, the fair value of such inventory and the relevant taxes and expenses shall be used as cost. (CIT Law I/R 72)Cost includes all direct expenditure to get inventory ready for sale, including attributable overheads.The cost of inventory consists of purchase costs, processing costs and other costs. (CAS 1.5)Other costs of inventories refers to those costs, other than purchase costs and processing costs, happened in bringing the inventories to their present location and condition. (CAS 1.8)See above (CIT Law I/R 72)“Market” is current replacement cost limited by net realisable value (ceiling) and net realisable value less a normal profit margin (floor). Net realisable value is the estimated selling price less the estimated costs of completion and sales.N/A N/A The cost of inventory can be determined using:l LIFO l FIFOl Weighted average l Standard costl Retail methodThe cost of inventory can be determined using:l FIFOl Weighted average l Specific identification method(CAS 1.14)Follow PRC GAAP (CIT Law I/R 73)The cost of inventory generally is recognized as an expense when the inventory is sold.Similar to US GAAP (CAS 1.14)The inventory used or sold by enterprises whose cost is calculated in accordance with “regulation” may be deducted from the taxable income.(CIT Law 15)That “regulation” refers to CIT Law I/R 72. Inventory is written down to market when net market is less than cost.If the cost of inventories is higher than the net realizable value, the provision for the loss on decline in value of inventories shall be made and be included in the current profits and losses.The net realizable value refers to in the daily business activity the amount after deducting the estimated cost of completion, estimated sale expense and relevant taxes from the estimated sale price of inventories. (CAS 1.15)The inventory waste in normal manufacture process or inventory sales/transfer loss at fair value in normal business operation needs to be reported to tax authority before deduction.Other impairment loss of inventories should be appoved by tax authority for deduction.Cai Shui 2009 No.59A write-down of inventory to market is not reversed for subsequent recoveries in value.If the factors causing any write-down of the inventories have disappeared, the amount of write-down shall be resumed and be reversed from the provision for the loss on decline in value of inventories that has been made.The reversed amount shall be included in the current profits and losses. (CAS 1.19)Inventory provision is a temporary difference. The reversal of inventory provision shall be excluded from taxable incme if the provision has been included in taxable income when previously recognized.Impairment of Non-finanical AssetsImpairment testing is required when there is an indicator of impairmentAn enterprise shall, on the day of balance sheet, make a judgment on whether there is any indicator of possible assets impairment. (CAS 8.4)N/AAnnual impairment testing is required for goodwill and intangible assets (available for use) that have an indefinite life. Similar to US GAAP (CAS 8.4)N/AIntangible assets not yet available for use are tested for impairment only if there is an indicator of impairment.N/A (no special rule for intangible assets not yet available for use)N/AAn indefinite-lived identifiable intangible asset is impaired if its fair value is less than its carrying amount.Assets is impaired if recoverable amount is less than carrying value of assets. (CAS 8.7)Recoverable amount = higher of:(a) Fair value disposal expense;(b) Present value of cash flows of the assets(CAS 8.6) Loss due to sales/transfer of intangible assets in normal business operations at fair value needs to be reported to tax authority before deduction.Other losses of intangible assets are subject to tax authoritys approval for deduction.(SAT Order 2011 No.25 Article 9)Goodwill is tested for impairment at the reporting units (RU) level.An RU is defined as an operating segment or one level below an operating segment.Goodwill is allocated to RUs that are expected to benefit from the synergies of the business combination from which it arose. When an enterprise makes an impairment test of assets, it shall, as of the purchasing day, apportion the carrying value of the goodwill formed by merger of enterprises to the relevant asset groups by a reasonable method. Where it is difficult to do so, it shall be apportioned to the relevant combinations of asset groups. (CAS 8.24)N/AGoodwill is impaired if the RUs fair value is less than its carrying amount.Discounted cash flows might be used to determine the fair value of an RU, asset group, or indefinite-lived identifiable intangible asset.Where the recoverable amount of the relevant assets group or combinations of the asset groups (goodwill allocated to) is lower than the carrying value, it shall recognize the impairment loss of the goodwill. (CAS 8.25)Impairment of purchased goodwill cannot be deducted. It is only deductible in whole company transfer or in liquidation. (CIT Law I/R 67)If goodwill is impaired, then the amount of the impairment is measured as the difference between goodwills implied fair value and its carrying amount.Where the recoverable amount of an asset group or a combination of asset groups (goodwill included) is lower than its carrying value, it shall be recognized as the corresponding impairment loss. The amount of the impairment loss shall first charge against the carrying value of the goodwill allocated to the assets group or combination of asset groups, then charge it against the carrying value of other assets in proportion to the weight of other assets in the asset group or combination of asset groups with the goodwill excluded. (CAS 8.22)N/ALong-lived depreciable and amortizable assets are tested for impairment in asset groups unless an individual asset generates identifiable cash flows largely independent of the cash flows from other asset group.An asset group is the lowest level for which there are indentifiable cash flows (rather than cash infows) that largely are independent of the cash flows of other groups of assets.Where there is any evidence indicating a possible impairment of assets, the enterprise shall, on the basis of single item assets, estimate the recoverable amount. Where it is difficult to do so, it shall determine the recoverable amount of the assets on the basis of the asset group to which the asset belongs. (CAS 8.18)The term group assets refers to a minimum combination of assets that may be recognized by an enterprise, by which the cash inflows generated shall be generally independent of those by other assets or group assets. (CAS 8.2)Normal disposal loss of fixed assets after depletion of useful life, and sales/transfer loss of fixed assets at fair value in normal business operation needs to be reported to tax authority before deduction.Other losses of fixed assets are subject to tax authoritys approval for deduction. SAT Order 2011 No.25 Article 9.An impairment loss is recognized for assets other than goodwill and identifiable intangibles with indefinite lives only if the assets (asset groups) carrying amount is not recoverable (i.e. the carrying amount is less than the undiscounted cash flows of the asset or asset group). If the carrying amount is not recoverable, then the impairment loss is based on the fair value of the asset (asset group).Assets is impaired if recoverable amount is less than carrying value of assets. (CAS 8.7)When impairment occures, the carrying value of the asset shall be recorded down to the recoverable amount. (CAS 8.15)Recoverable amount = higher of:(c) Fair value disposal expense;(d) Present value of cash flows of the assets(CAS 8.6)Fair value could be determined by:l Contractual sales price on arms length basisl Active market pricel Price based on best informationWhen the fair value is not available, the recoverable amount shall be determined by present value of cash flows of the assets. (CAS 8.8)N/AAn impairment loss for an asset group is allocated pro rata to assets in the asset group, excluding working capital, good will, corporate assets and indefinite-lived intangible assets.Where the recoverable amount of an asset group or a combination of asset groups (goodwill and HQ assets may allocated to) is lower than its carrying value, it shall be recognized as the corresponding impairment loss. The amount of the impairment loss shall first charge against the