China Clarifies How Businesses Should Account for Data Resources

What’s new: China’s Finance Ministry issued new rules applying business accounting standards to data resources as part of the country’s push to expand the digital economy, which accounts for 17% of GDP.

The rules take effect Jan. 1, 2024, and clarify accounting for businesses’ data resources as intangible assets and as inventory.

If a business’s use of data resources meets the definition of intangible assets as stipulated in corporate accounting standards, they should be so recognized under the new regulations. If a company uses the data in daily business activities and ultimately intends it for sale, the data should be counted as inventory, according to the new rules.