MOF Seeks Comments on the Interpretation of the Accounting Standards for Business Enterprises No. 20

Recently, the Ministry of Finance (MOF) has drafted the Interpretation of the Accounting Standards for Business Enterprises No. 20 (Draft for Comment) (the "Draft") and is soliciting comments from the entities concerned. The deadline for submitting comments is April 10, 2026.

The Draft mainly addresses two issues: (1) the assessment of contractual cash flow characteristics of financial assets; and (2) accounting treatment and related disclosures when a currency lacks exchangeability. The Draft further clarifies the provisions of Accounting Standard for Business Enterprises No. 22 — Recognition and Measurement of Financial Instruments concerning the assessment of contractual cash flow characteristics of financial assets. Specifically, first, it clarifies the meaning of financial assets with a non-recourse feature and refines the judgment principles for assessing the contractual cash flow characteristics of such financial assets. Second, it provides more detailed explanations of contractually linked instruments, clarifies that they possess non-recourse features, and refines the relevant judgment principles and specific requirements for assessing their contractual cash flow characteristics. Third, it specifies transitional arrangements between the old and new provisions.



(Source: http://kjs.mof.gov.cn/gongzuotongzhi/202603/t20260306_3984754.htm)

Note: The link to the Chinese official website of the document is for your reference.