China unveiled a set of accounting rules for corporate data resources late on Monday, a move experts said highlights both the importance of data assets in business operations and the country's efforts to accelerate the development of its fast-growing digital economy.
The Ministry of Finance released the Interim Provisions on Accounting Treatment of Enterprise Data Resources on Monday. The document stipulates the scope of application of the provisions, the principles of accounting for data resources, and the presentation and disclosure requirements on enterprises regarding their data resources.
When meeting relevant requirements in accounting standards, data resources utilized by enterprises could be recognized as intangible assets, while data resources held for sale in the ordinary course of business could be recognized as inventories, according to the regulations that are scheduled to take effect on Jan 1.
An official from the ministry said in a statement on Monday that as China accelerates industrial digitalization and its digital economy, data resources have become increasingly important for enterprises to add value, especially for those operating in data industries.
"The interim regulations take into account factors like information needs, cost-effectiveness and protection of trade secrets, to innovatively adopt the voluntary disclosure method and regulate disclosure of key information based on the concerns of all parties," said the official.
Enterprises are expected to fully understand the significance of providing relevant information on their data resources. They should strengthen voluntary disclosure of information like the application scenarios or business models of data resources, types and sources of original data, maintenance and safety protection, key transactions, and invalidation and restriction of relevant rights, so forth, to fully reflect the impact of data resources on their financial position and operating results, the official said.
China, a global leader in the digital economy, is currently establishing a national data bureau, which will coordinate the integration, sharing, development and application of data resources.
At a State Council study session held on Monday, Chinese Premier Li Qiang stressed strengthening and expanding the country's digital economy to bolster economic recovery and empower high-quality development.
Concerted efforts should be made to promote independent innovation to seek breakthroughs in key core technologies, while core industries in the digital economy should improve, he said.
He also said developing the digital economy entails a conducive environment, and an inclusive and prudent approach should be taken when regulating the sector.
Liu Feng, a professor at Xiamen University in Fujian province, said the authorities have taken into account the new and emerging elements in economic development that have growing influence over corporate operations, in order to roll out the accounting rules for data resources.
"It is of great significance as that means China is a little ahead of many others in rolling out such accounting rules," Liu, who is also director of the Center for Accounting Studies of Xiamen University and member of the Advisory Council of the International Financial Reporting Standards, said.
"The accounting rules will also increase awareness of the whole society about the importance of data resources, including their role in corporate operations and economic output," Liu said.
CITIC Securities said the accounting rules will help give full play to the value of data as one of the factors of production and promote the development of the digital economy.
They will help strengthen the management of enterprise data resources and standardize the accounting treatment of data assets, enhancing the foundation for the circulation and transaction of data resources in the future, CITIC Securities said.
Some Chinese companies have already begun to separately count the revenue from big data.
State-owned telecom giant China Unicom recently said revenue from its big data business surged 54 percent year-on-year to 2.9 billion yuan ($400 million) during the first half of the year. The corresponding figure for China Mobile was 2.56 billion yuan, up nearly 57 percent.
