Similarities and Differences

Chinese Accounting Standards

and Nepal Accounting Standards

Prepared by : sujan khaiju

Major: BBA
1.Chinese Accounting Standard(CAS):
Chinese accounting standards are the accounting rules used in mainland China.
Chinese accounting standards are unique because they originated in
a socialist period in which the state was the sole owner of industry. Towards the
end of the 1970s, a new law that allowed joint ventures was passed by the Chinese
administration. Later in the 1990s, the fast-growing economy saw the Chinese
accounting standards undergo several changes. First, the country adopted the
People’s Republic of China Generally Accepted Accounting Standards (PRC
GAAS). In 2001, the People’s Republic of China Generally Accepted Principles
were adjusted further to the Accounting Standards for Business Enterprises
(ASBE01), which have one main standard and16 additional specific standards.

This system of accounting was widely considered to be unsuitable for managing

corporations in a market economy. In 2006, the Chinese government introduced a
revised accounting law. This was the fruit of considerable discussion and
protracted debate, involving the Ministry of Finance, members of the International
Accounting Standards Board (IASB) and representatives of some Chinese firms.
As of February 2010, the systems is composed of Basic Standard, 38 specific
standards and application guidance

This revised law marked a large step forward for the continuing integration of
world trade and capital markets, with China adopting a significant number of the
accounting standards laid out by the International Accounting Standards Board.
The old Chinese Accounting Standards (CAS) were largely replaced by
the International Financial Reporting Standards (IFRS), to bring China more in line
with the rest of the world. The similarity between the new Chinese accounting
standards and the IFRS is almost 90–95%.
2.Nepal Accounting Standards(NAS):
Under the Nepal Chartered Accountants Act, 1997 (as amended), Nepal
Accounting Standards (NASs) are developed by the Accounting Standards Board
(ASB), on the basis of relevant International Financial Reporting Standards
(IFRSs). In developing standards, the ASB takes into consideration the legal and
regulatory environment and the preparedness of stakeholders in Nepal, with the
objective of making the fewest possible modifications to IFRSs.

Under the Act, the Institute of Chartered Accountants of Nepal (ICAN) is required
to monitor and regulate its members so as to ensure compliance with accounting
standards developed or recommended by the Accounting Standards Board.

From its formation in 2003, the Accounting Standards Board developed a number
of Nepal Accounting Standards which were based on equivalent IFRSs but these
standards did not include equivalents to all IFRSs.

During 2013, the Accounting Standards Board finalised another set of accounting
standards (Nepal Financial Reporting Standards, NFRS) that were based on all
IFRSs expect some. An equivalent to the IFRS for SMEs was also developed, the
Nepal Financial Reporting Standard for Small- and Medium-sized Entities (NFRS
for SMEs)
3.Similairites between CAS and NAS:
1. Both CAS and NAS are based and developed on relevant equivalent
International Financial Reporting Standards (IFRS) but they are not
completely same and equivalent on all IFRS. Both CAS and NAS are around
5% different from IFRS.

2. In both CAS and NAS, filing of tax and financial statements are done on a
monthly basis for internal basis and reviewed externally in the form of audit
annually at the end of every fiscal year.

3. For some matters, such as merging two entities that are controlled by one
company, both CAS and NAS require the figures to be restate. Further, both
also guide and direct them.

4. In both CAS and NAS, local currency is utilized. Transactions in foreign

currency are converted to the equivalent amount of local currencies by using
the official rate. Additionally, double-entry is completed only in the local
currencies. 

5. When IFRS updates are released, both CAS and NAS do not implement
them immediately. Instead, the Ministry of Finance reviews them to
establish if they are suitable for application and if they will be added into
their accounting standards.
4.Differences between CAS and NAS:
S.N Chinese Accounting Standards
(CAS)
1. Valuation of fixed assets can only be
done using the historical-cost method.
Nepal Accounting Standards
(NAS)
Businesses have the option to
use historical-cost method or re-
evaluating the asset

2 The fiscal year of CAS is same as IFRS
that is based in international calendar
rather than their on national chinese
calendar. Thus, the fiscal year begin on 1st
Jan. and ends on 31st Dec. .
The fiscal year of NAS is based on
national (lunar) calendar of Nepal. Thus,
the fiscal year begin on 1st Shrawan and
end on 31st Ashad.

3. CAS requires companies in China to NAS requires companies in Nepal to

deals with Ministry of Finance , China deal with Tax Department for and
while submitting their accounts. Office of Company Registar while
submitting .

4. In CAS, China has amend and implement In NAS, Nepal has not made any
IFRS as per their law and conditions and amendment in IFRS due to skill
had not adopt some as well. manpower. So, it usually adopt all IFRS
updates as per the needs.

5. In China, Ministry of Finance issues and In Nepal, Institute of Chartered

monitors accounting standards for CAS. Accountancy of Nepal (ICAN) issue and
monitors accounting standards for NAS.

6. Chinese accounts are generally classified Nepalese accounts are classified on the
by function. basis of nature as in in IFRS.

Thankyou !!!!!