China's Ministry of Finance, together with the National Financial Regulatory Administration, issued implementation arrangements for the revised Accounting Standard for Business Enterprises No. 25 Insurance Contracts, confirming continued application by firms already using the standard and setting 1 January 2026 as the start date for other entities applying PRC GAAP, with a mechanism for insurers to seek temporary deferral. Companies listed both onshore and offshore, and those listed only offshore that prepare financial statements under International Financial Reporting Standards or PRC GAAP, must continue applying the standard, as must insurers that adopted it early. Other PRC GAAP reporters must adopt from 1 January 2026; insurers seeking to defer must submit written reasons by 30 June 2025 to the Ministry of Finance and the National Financial Regulatory Administration and disclose the deferral and reasons in the notes during the deferral period, while early adopters must report their early adoption by the same deadline. For non-listed entities, the notice allows election of one or more simplifications on first-time adoption, covering areas such as contract grouping and recognition, measurement (including optional separation and amortised-cost accounting for certain policy loan and due-and-payable cash flows, and alternative approaches to determining the non-financial risk adjustment when standard methods are impracticable), and presentation and disclosure (including relief from certain reinsurance roll-forward disclosures when net ceded reinsurance assets are no more than 30% of net insurance contract liabilities). It also sets transition simplifications, including limiting comparative information to the most recent prior year, and requires non-listed entities to apply any elected simplifications consistently across all in-scope contracts. The notice takes effect from issuance, and the Ministry of Finance and the National Financial Regulatory Administration will track implementation and further refine guidance and coordination between supervisory rules and the accounting standard.
Ministry of Finance (China) 2025-06-06
China's Ministry of Finance sets 1 January 2026 adoption date and simplified measures for the new insurance contracts accounting standard
China's Ministry of Finance and the National Financial Regulatory Administration issued implementation arrangements for the revised Accounting Standard for Business Enterprises No. 25 Insurance Contracts. Firms already using the standard must continue, while other PRC GAAP reporters must adopt it by 1 January 2026, with insurers able to seek temporary deferral. Non-listed entities may elect simplifications on first-time adoption, and authorities will monitor implementation and refine guidance.