What’s new: East China’s Zhejiang province on Tuesday put into force guidelines on how to recognize data as a corporate asset, which could help facilitate the inclusion of the resources into companies’ financial statements, giving investors a better indication of their value.
A company can recognize data resources as assets if they have been obtained from its transactions or other activities, are legally owned or controlled by itself, and bring economic benefits, according to the guidelines put forward by the Zhejiang Provincial Department of Finance.
When corporate data are identified as assets, they can be reflected in companies’ balance sheets, which can reflect the firms’ asset value and competitiveness, Sun Cheng, a partner at Shanghai-based DeBund Law Offices, told Caixin.
The background: The guidelines come four months after the Ministry of Finance released the Interim Provisions on Accounting Treatment of Enterprise Data Resources, which are set to come into effect on Jan. 1.
The provisions offer a framework for classifying data resources and will allow companies to designate them as intangible assets or inventories if they meet relevant accounting standards.
Read more In Depth: How China Is Tightening Controls Over Cross-Border Data Transfer
Contact reporter Ding Yi (yiding@caixin.com)
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