This post was originally published on this sitehttps://i-invdn-com.akamaized.net/news/LYNXMPEB59082_M.jpg
SHANGHAI (Reuters) – China’s finance ministry on Thursday published draft rules on accounting practices of financial firms focusing on ensuring profits are accurately reported.
China has been cracking down on financial risk and its firms are dogged by accusations of account manipulation, ranging from maintaining two sets of accounts to avoid taxation to falsifying sales.
Under the rules published on the Ministry of Finance’s official website, if money set aside for loss provision is more than twice that of regulatory requirements, the firm could be attempting to hide profits.
The loss provisioning ratio currently should be 150%.
The amount of tax a firm pays and also dividends paid to shareholders is linked to the profit it reports.
By the end of June, there were six A-share listed banks with a coverage ratio of more than 300%, including China Merchants Bank (SS:) and Bank of Shanghai (SS:), the Shanghai Securities News said on Friday.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.