China Securities Regulatory Commission, Questions and Answers on the Standards for Information Disclosures by Companies That Offer Securities to the Public No.1 - Extraordinary Gain or Loss

Issued: April 25 2001
Effective: as of date of issue
Applicability: Extraordinary gain or loss means a receipt or expenditure that is not directly related to the business operation of a company or that, if related to the business operation of the company, is of such a nature, amount or frequency that it may affect the accurate and fair evaluation of the current business result and profitability of the company (Section One).

Main contents: Extraordinary gain or loss includes gain or loss resulting from an affiliated transaction not conducted at arm' s length, a disposal of the equity in a subsidiary or investment, an asset replacement, an unauthorized tax rebate or other government subsidies, or a retrospective adjustment to the net profit for a previous accounting period (Section Two). It may also include a gain or loss on inventory or other non-operating receipt or expenditure (Section Three). The Answers require all extraordinary gains or losses to be disclosed in prospectuses, periodic reports and applications for the issue of new shares (Section Five).