China’s new accounting rules on enterprise data resources to have ‘greater impact’ on Big Tech firms, telecoms network operators

The Interim Provisions on Accounting Treatment of Enterprise Data Resources classify corporate data as either ‘intangible assets’ or ‘inventories’

The new rules, which will take effect on January 1, mark Beijing’s latest initiative to advance the development of the nation’s digital economy

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In April 2020, China’s policymakers added data as a new production factor that is in the same category as land, capital and human labour. Photo: Shutterstock

Published: 7:27pm, 24 Aug 2023

China’s efforts to promote the development of its digital economy are expected to receive a big boost next year, when an updated set of accounting rules allow companies to include data resources as either “intangible assets” or “inventories” in their financial statements.

Under the Interim Provisions on Accounting Treatment of Enterprise Data Resources released by the Ministry of Finance on Monday, corporate data could be classified as intangible assets when these meet relevant requirements in accounting standards, while data held for sale in daily business activities could be recognised as inventories.

The new rules, which will take effect on January 1, are expected to have “a greater impact” on companies that produce and purchase data, such as those in the computing and telecommunications industries, according to a research note published on Tuesday by Beijing-based investment bank Citic Securities. That would include the country’s largest internet companies and telecoms network operators.

The interim provisions are expected to help companies sort out which data resources can be recognised as accounting assets and ascertain in which category those belong, according to a Finance Ministry statement on Monday.

The facade of China’s Ministry of Finance headquarters in Beijing is seen on August 23, 2018. Photo: Reuters

The updated accounting rules mark Beijing’s latest initiative to advance the development of the nation’s digital economy by applying commercial rules to information.

It comes after Beijing unveiled plans in March for a proposed National Data Bureau, a new agency to be formed as part of a sweeping overhaul of government institutions under the State Council.