Shenzhen Stock Exchange, Working Guidelines for Information Disclosure of Listed Companies (No. 7): Changes to Accounting Policies and Accounting Estimates
深圳证券交易所上市公司信息披露工作指引第7号–会计政策及会计估计变更
November 02, 2007 | BY
clpstaff &clp articles &Shenzhen Stock Exchange curbs listed companies' tampering of accounting results.
Issued: October 9 2007
Effective: As of date of issuance
Interpreting Authority: Shenzhen Stock Exchange (the Stock Exchange)
Applicability: These Guidelines apply to the changes to accounting policies and accounting estimates of companies listed on the Stock Exchange and the information disclosure related thereto
(Article 2).
The term "changes to accounting policies and accounting estimates" refers to the changes to accounting policies and accounting estimates as defined in the Enterprise Accounting Guidelines No.28: Changes to Accounting Policies and Accounting Estimates, and Correction of Accounting Errors (Article 3).
Main Contents: Listed companies may not use changes to accounting policies and accounting estimates to manipulate financial indicators such as profit and owner's equity (Article 4). Where a listed company changes its accounting policies, it shall submit the related resolution of the board of directors to the Stock Exchange and perform information disclosure obligations within two trading days after the resolution is approved
(Article 5).
Where the changes to accounting policies made by a listed company on its own meet any one of the following criteria, the company shall, upon approval of the board of directors, submit a special audit report for the deliberation of the shareholders' general meeting before the announcement of the periodic report:
(1) the changes to accounting policies result in a change in the net profit in the periodic report of more than 50%;
(2) the changes to accounting policies result in a change in the owner's equity in the periodic report of more than 50%; or
(3) the impact of the changes to accounting policies on the periodic report results in a change to the profit or loss of the company (Article 7).
Where a listed company changes a major accounting estimate, it shall, upon approval of the board of directors, perform information disclosure obligations with reference to the provisions on changes to accounting policies on a company's own. Where the changes meet any one of the following criteria, the listed company shall submit a special audit report for the deliberation of the shareholders' general meeting before the announcement of the periodic report:
(1) the changes to accounting estimate result in a change in the net profit in the periodic report of more than 50%;
(2) the changes to the accounting estimate results in a change in the owner's equity in the periodic report of more than 50%; and
(3) the impact of the changes to the accounting estimate on the periodic report results in a change to the profit or loss of the company (Article 11).
Related Legislation: PRC Securities Law (Amended), Oct 27 2005, CLP 2006 No.1 p.31; Measures for the Administration of Information Disclosure by Listed Companies, Jan 30 2007, CLP 2007 No.1 p.9; Enterprise Accounting Guidelines, Feb 15 2006; and Shenzhen Stock Exchange, Share Listing Rules (5th Revision), May 18 2006
clp reference:3100/07.10.09/SZpromulgated:2007-10-09effective:2007-10-09This premium content is reserved for
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