China's Accounting Records Retention
China’s Administrative Measures on Accounting Records, last revised in 2016 by the Ministry of Finance and the National Archives Bureau, outline the guidelines for managing accounting records, including specific retention requirements for electronic filing systems, ensuring compliance in an increasingly digitized business environment.
Accounting records and voucher archives must be retained in accordance with the relevant regulatory requirements, as detailed below:
Original vouchers and accounting vouchers: The retention period is 30 years. These documents serve as the primary evidence of a company’s economic transactions. Even after liquidation, they must still be preserved for the full 30-year retention period to provide a basis for any subsequent reviews, investigations, or legal disputes. For instance, they may confirm the basis for debt settlement during liquidation or trace details such as asset disposal prices.
General ledgers, subsidiary ledgers, journals, and other auxiliary ledgers: Generally, the retention period is also 30 years. These records offer detailed insights into the company’s financial status and operating results. They serve as critical reference materials for resolving post-liquidation issues, protecting shareholders’ rights and interests, addressing potential litigation, and complying with subsequent audit inspections.
Annual financial accounting reports: These reports are usually preserved permanently. As they comprehensively reflect the company’s financial status and annual operating results, they carry long-term implications. Permanently retained annual financial reports can serve as vital resources for tracing economic liabilities, evaluating the company’s historical performance, and assessing liquidation outcomes. For example, they are essential when dealing with historical issues, subsequent tax inspections, or legal proceedings, offering the most complete and authoritative information for relevant parties.
It is important to note that, the liquidation of a company does not alter the legal retention period of accounting archives. Even after a company is liquidated, the possibility of an audit or investigation, although less frequent, still exists. Authorities may initiate audits for reasons such as detecting irregularities in the company's pre-liquidation operations, responding to stakeholder complaints or conducting broader industry audits. Therefore, companies must safeguard their accounting records to ensure compliance and mitigate potential complications in the future.