China And South Korea Accounting Standards

Globalization and the interconnectedness of the world economy have resulted in increased economic exchanges between China and South Korea and close coordination and cooperation among the enterprises of both countries. However, since both countries follow different accounting standards certain difficulties arise in interpreting the information exchanged among the enterprises of both countries. These misunderstandings post challenges for the users of such accounting information of both countries. It is therefore important that a deeper understanding of the differences in the accounting standards of China and South Korea be developed if we are to reconcile these differences and facilitate the further exchanges among the enterprises of both counties.This thesis has four parts. The first chapter analyzes the reasons underlying the difference between the two countries' setting pattern of accounting standards through comparing the accounting standards' setting pattern respective followed by China and South Korea. The second chapter describes in detail the characteristics of Chinese and South Korean accounting standards and compares their financial accounting report goal, applicable scopes, formulation procedures and systems. The third chapter analyzes the main differences between accounting standards coming from both countries by comparing the standards of inventories, fixed assets, intangible assets and revenues. This chapter also looks into how the differences in accounting standards influence the financial accounting reports. The fourth chapter is a summary of the thesis. Aside from reiterating the significance of the study, it also discusses the limitation of the research processes. It is the aim of this thesis to help the users analyze the accounting reports prepared according to both countries' accounting standards correctly. Future researchers may also benefit from this thesis if they intend to further study Chinese and South Korean accounting standards and related topics.