Listed companies prepare to disclose their losses

May 04, 2012 | BY

clpstaff &clp articles

Listed companies are now required to fully disclose financial risks and losses, which may make investors more cautious about restructuring businesses

The China Security Regulatory Commission (CSRC) announced the regulatory Requirements on the disclosure of accumulative loss after assets restructuring of listed companies on March 30.

The Requirements no longer allow companies to use their capital reserve to make up losses. Listed companies have to disclose the risks in the provisional announcement and annual report. Special risk notices are no longer permitted.

Greater transparency in financial losses would compel investors to take a more cautious approach, according to Yaolong Zhu, managing partner of Zhong Yin Law Firm.

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