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In order to regulate the recognition, measurement and disclosure of relevant information of government subsidies, this standard is formulated in accordance with the "Enterprise Accounting Standards-Basic Standards".

Accounting Standard for Business Enterprises No. 16-Government Subsidies

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To regulate

Article 1 In order to regulate the recognition, measurement and presentation of government subsidies,

Article 6 A government subsidy can be recognized only if it meets the following conditions at the same time:
(1) the enterprise can meet the conditions attached to the government subsidy;
(2) Enterprises can receive government subsidies.
Article 7 Where government subsidies are monetary assets, they shall be measured according to the amount received or receivable.
If the government subsidy is a non-monetary asset, it shall be measured at its fair value; if the fair value cannot be obtained reliably, it shall be measured at its nominal amount.
Article 8 Government subsidies related to assets shall be deducted from the book value of the relevant assets or recognized as deferred income. Where asset-related government subsidies are recognized as deferred income, they shall be charged to profit or loss in a reasonable and systematic manner over the useful life of the relevant assets. Government subsidies measured at nominal amounts are directly included in the current profit and loss. If the relevant assets are sold, transferred, scrapped or damaged before the end of their useful lives, the remaining undistributed deferred income balance shall be transferred to the profit and loss of the current period of asset disposal.
Article 9 Government subsidies related to income shall be accounted for in accordance with the following conditions according to the situation:
(1) If it is used to compensate the related cost expenses or losses of the enterprise in the subsequent periods, it shall be recognized as deferred income, and shall be included in the current profit and loss or offset related costs during the period when the related cost expenses or losses are recognized;
(2) If it is used to compensate the related costs or losses already incurred by the enterprise, it shall be directly included in the current profit or loss or offset against related costs.
Article 10 Government subsidies that include both asset-related and income-related parts shall be accounted for separately in different parts; if they are difficult to distinguish, they shall be classified as revenue-related government subsidies as a whole.
Article 11 Government subsidies related to the daily activities of enterprises shall be included in other income or offset related costs in accordance with the essence of economic operations. Government subsidies not related to the daily activities of enterprises shall be included in non-operating income and expenditure.
Article 12 Where an enterprise obtains preferential interest discounts for policy loans, it shall distinguish between the financial allocation of discounted funds to the loan bank and the direct allocation of financial discounted funds to enterprises, in accordance with Articles 13 and 14 of these Guidelines. Accounting.
Article 13 If the finance allocates interest-disbursing funds to a loan bank and the loan bank provides loans to the enterprise at a preferential policy rate, the enterprise may choose one of the following methods for accounting treatment:
(1) The actual borrowing amount received is used as the book entry value of borrowings, and the relevant borrowing costs are calculated in accordance with the principal of the borrowings and the preferential policy interest rate.
(2) Taking the fair value of borrowings as the booked value of borrowings and calculating the borrowing costs in accordance with the actual interest rate method, the difference between the actual amount received and the fair value of the borrowings is recognized as deferred income. Deferred income is amortized using the effective interest rate method over the life of the borrowings to offset related borrowing costs. After choosing one of the two methods, the enterprise shall apply it consistently and shall not change it at will.
Article 14 The finance shall directly pay the discounted funds to the enterprise, and the enterprise shall offset the corresponding discounted interest with the relevant borrowing costs.
Article 15 Where a confirmed government subsidy needs to be returned, it shall be accounted for in accordance with the following provisions in the current situation in which it needs to be returned:
(1) If the book value of the relevant asset is deducted during initial recognition, the book value of the asset is adjusted;
(2) If there is relevant deferred income, the book balance of relevant deferred income shall be written off and the excess shall be included in the current profit and loss;
(3) In other cases, it is directly included in the current profit and loss.

Article 16 An enterprise shall separately list the "other income" item above the "operating profit" item in the income statement, and government subsidies included in other income are reflected in the item.
Article 17 An enterprise shall separately disclose the following information related to government subsidies in the notes:
(1) the types, amounts and presentation items of government subsidies;
(2) the amount of government subsidies included in the current profit and loss;
(3) The amount and reasons of the government subsidies returned in the current period.

Article 18 The government subsidies existing on January 1, 2017 shall be treated by the applicable future method, and the new government subsidies between January 1, 2017 and the implementation date of this standard shall be adjusted in accordance with this standard.

Article 19 These Guidelines shall be implemented as of June 12, 2017.
Article 20 The "Enterprises in the Notice of the Ministry of Finance on Printing and Distributing 38 Specific Standards for Business Accounting Standards No. 1-Inventory" issued by the Ministry of Finance on February 15, 2006 (Finance and Accounting [2006] 3) Accounting Standard No. 16-Government Subsidies was repealed at the same time.
If the relevant regulations on accounting treatment of government subsidies previously issued by the Ministry of Finance are inconsistent with this Standard, this Standard shall prevail.

Accounting Standard for Business Enterprises No. 1-Inventory.

Accounting Standard for Business Enterprises No. 2-Long-term equity investment.

Accounting Standards for Business Enterprises No. 3-Investment Real Estate.

Accounting Standard for Business Enterprises No. 4-Fixed Assets.

Accounting Standard for Business Enterprises No. 5-Biological Assets.

Accounting Standard for Business Enterprises No. 6-Intangible Assets.

Accounting Standards for Business Enterprises No. 7-Non-Monetary Asset Exchange.

Accounting Standard for Business Enterprises No. 8-Asset impairment.

Accounting Standard for Business Enterprises No. 9-Employee compensation.

Accounting Standard for Business Enterprises No. 10-Enterprise Annuity Fund.

Accounting Standards for Business Enterprises No. 11-Share Payments.

Accounting Standard for Business Enterprises No. 12-Debt Restructuring.

Accounting Standards for Business Enterprises No. 13-Contingencies.

Accounting Standard for Business Enterprises No. 14-Revenue.

Accounting Standard for Business Enterprises No. 15-Construction Contracts.

Accounting Standards for Business Enterprises No. 16-Government subsidies.

Accounting Standard for Business Enterprises No. 17-Borrowing Costs.

Accounting Standard for Business Enterprises No. 18-Income Tax.

Accounting Standard for Business Enterprises No. 19-Foreign Currency Translation.

Accounting Standards for Business Enterprises No. 20-Business Consolidation.

Accounting Standard for Business Enterprises No. 21-Leases.

Accounting Standard for Business Enterprises No. 22-Recognition and measurement of financial instruments.

Accounting Standard for Business Enterprises No. 23-Transfer of Financial Assets.

Accounting Standard for Business Enterprises No. 24-Hedging.

Accounting Standard for Business Enterprises No. 25-Original Insurance Contract.

Accounting Standard for Business Enterprises No. 26-Reinsurance Contracts.

Accounting Standard for Business Enterprises No. 27-Oil and Gas Extraction.

Accounting Standard for Business Enterprises No. 28-Changes in Accounting Policies, Accounting Estimates and Error Corrections.

Accounting Standard for Business Enterprises No. 29-Events after the balance sheet date.

Accounting Standard for Business Enterprises No. 30-Presentation of Financial Statements.

Accounting Standard for Business Enterprises No. 31-Statement of Cash Flows.

Accounting Standard for Business Enterprises No. 32-Interim Financial Report.

Accounting Standard for Business Enterprises No. 33-Consolidated Financial Statements.

Accounting Standard for Business Enterprises No. 34-Earnings per share.

Accounting Standard for Business Enterprises No. 35-Segment Reporting.

Accounting Standard for Business Enterprises No. 36-Related Party Disclosure.

Accounting Standard for Business Enterprises No. 37-Presentation of Financial Instruments.

Accounting Standards for Business Enterprises No. 38-Implementation of Accounting Standards for Business Enterprises for the first time.

Standards 39, 40, and 41 were issued in 2014 (implemented from July 1, 2014):

Accounting Standard for Business Enterprises No. 39-Fair value measurement.

Accounting Standard for Business Enterprises No. 40-Joint Venture Arrangements.

Accounting Standard for Business Enterprises No. 41-Disclosure of Interests in Other Entities

Accounting Standard for Business Enterprises No. 42-Non-current assets held for sale, disposal groups and termination of operations