What are the four basic accounting assumptions in China?

(a) Accounting Entity
An accounting entity can be an enterprise, an enterprise group or the accounting department of an enterprise.

(b) Continuity Postulate
The Accounting System stipulates that, under normal circumstances, the accounting treatment to be adopted by enterprises should be based on continuity postulate. For instance, the historical costing method is used for the assets and liabilities of an enterprise, and historical cost is used for the depreciation method of fixed assets.

(c) Accounting Period and Accounting Year
An enterprise should account for its transactions or events and prepare financial statements in distinct accounting periods. Accounting periods may be a year, half year, a quarter or a month, commencing on the first day thereof according to the calendar year.

(d) Measurement Currency and Reporting Currency
Renminbi is the reporting currency of enterprises. While a certain foreign currency may be used as the reporting currency for enterprises which frequently engaged in foreign currency transactions, all foreign currency transactions should be converted into Reminbi when financial statements are prepared and submitted.

Accounting records and financial reports should be maintained in Chinese. FIEs, foreign enterprises and other foreign organizations in China may at the same time use one foreign language together with Chinese.