ENOCH YIU in Sanya

China wants its accounting rules to meet international accounting standards (IAS) but will fight for exemption from some of them because of the country's special market structure, according to a top China Securities Regulatory Commission (CSRC) official.

The CSRC's chief accountant and international department director, Zhang Weiguo, yesterday said China would need to keep up with international trends.

"There are an increasing number of mainland companies going overseas for listings. It is also a worldwide trend for different countries to match their accounting rules with the international accounting standards," he said at a Deloitte certified public accountants summit in Sanya.

The IAS, set by the International Accounting Standards Board (IASB), are a set of accounting principles adopted in many European and Asian markets, including that of Hong Kong.

The International Organisation of Securities Commissions has set next year as a target for all listed companies in Europe and 60 other markets, including Hong Kong's, to adopt or amend their financial reporting rules to conform with the IAS.

The rationale is to make it easier for investors to apply uniform standards to assess companies that are seeking to list in several markets at the same time.

Companies will find it easier and cheaper to use a single accounting report when they have cross-border listings.

At present, countries have different rules, so firms seeking cross-border listings have to produce several accounting reports. For example, a company listed in the mainland, Hong Kong and the United States has to prepare three sets of accounts.

In the past few years, Hong Kong has moved closer towards the IAS regime and it will completely switch over to it next year.

The US and China have not adopted all IAS rules, even though Mr Zhang admitted there would be benefits in following IAS as it would make it cheaper for mainland firms to list overseas.

Mr Zhang said China would follow some but not all IAS rules because some international regulations did not take into account the situation in China.

"We have to note that China is different from other, western markets in many areas. For example, China still has many companies that are state-owned enterprises while overseas markets mainly have privately owned companies," he said.

"The accounting treatment related to the disclosure of connected transactions and for mergers and acquisitions for Chinese companies should be different from that of overseas companies."

Mr Zhang said China would actively participate in the IASB to reflect the concerns of the nation in any new rules or changes to the IAS.

"We would ensure more Chinese representatives are involved in the setting of international accounting standards to express our own views," he said.

"We would like the standards to be set in a way that gives more consideration to the market situations of China, or else give exemptions in accounting treatment to Chinese firms."

The CSRC would also urge companies to place emphasis on accurate and fair reporting of results rather than profitability, Mr Zhang said.