Joint ventures in China – accounting implications

Illustrates the growth of foreign investment in China, which is most often dealt with through Chinese‐foreign equity joint ventures and discusses the business issues involved. Traces the development of the Chinese accounting system, which is now largely in line with international standards, and identifies four accounting issues for foreign partners in joint ventures. Warns that the evaluation of a proposition must take into account the different accounting standards applied to previous accounts, the time needed to get an investment running effectively and possible legal problems in the home country from personal favour. Points out that the consolidation of joint venture accounts is not straightforward and recommends that the accounting rules which apply to contracts should be specified.