MOF Issues New Government Accounting Standards

Recently, the Ministry of Finance ("MOF") has issued the Interpretation of the Government Accounting Standards System No. 5 (the "Interpretation"), with effect on the date of issuance.

The Interpretation clarifies two issues: the accounting treatment related to the integrated budget management and the accounting treatment of dedicated funds drawn from the balance. According to the Interpretation, when a central budget organization switches to the payment method under the integrated budget management, it shall cancel the previous zero-balance account credit limit, and debit "Revenue from Financial Appropriations" subject (this year's budget indicator) or "Amount of Fiscal Repayment" subject (the previous year's budget indicator) under the financial accounting, according to the amount of the zero-balance account credit limit, and credit the "Zero-balance Account Credit Limit" subject; in the meantime, it shall debit "Budget Revenue from Financial Appropriations" under budget accounting subject (this year's budget indicator) or "Fund Balance – Amount of Fiscal Repayment" subject (the previous year's budget indicator), and credit the "Fund Balance – Zero-balance Account Credit Limit" subject.

(Source: http://kjs.mof.gov.cn/zhengcefabu/202209/t20220928_3843245.htm)