Accounting for the Chinese context: a comparative analysis of international and Chinese accounting standards focusing on business combinations

Abstract

This paper aims at understanding the recent evolution of Chinese accounting standards while focusing on the accounting for business combinations as case of reference. A comprehensive comparative analysis between International Accounting Standards Board's and Chinese accounting standards is provided, based upon a dualistic approach opposing two perspectives of accounting, static (fair value) or dynamic (matching based). The comparison casts doubts on the ultimate convergence of China towards international accounting standards. Main differences remain and are explained by taking into account: (i) the special Chinese context, (ii) the massive industrial development experienced by business enterprises in China and (iii) the dynamic accounting perspective that leading accounting theorists and Chinese regulatory authorities agree with and wish to encourage.