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Deloitte launched Swiss Investment Guide - Accounting and Auditing for Chinese companies

Attracting millions of Chinese tourists every year, Switzerland boasts breath-taking landscape and various leisure activities. Despite the snow-white panorama of mountains and lakes dazzling the eye, Switzerland is also an investment hot spot. According to the World Competitiveness Report 2017-2018 launched by World Economic Forum (WEF), Switzerland tops the list of Most Competitive Global Economies. Zurich and Geneva are ranked among top 20 financial centres on the 22nd Global Financial Centres Index (GFCI) in 2017. Its robust business and market environment in banking, watch and high-tech industries has attracted hefty international investment for generations. And the high degree of labour specialization in the country enables many enterprises to strive for excellence in global market.

Switzerland is the first country on the European continent to sign a bilateral free trade agreement (FTA) with China, which came into effect in 2014. Investment activities between the two countries witnessed continuous growth ever since, with the signature deal of ChemChina acquiring Syngenta at staggering US$43 billion announced in 2016. After the President Xi Jinping's visit to Switzerland in 2017, the bilateral Free Trade Agreement was upgraded, followed by abundant cooperation opportunities surging with unprecedented impetus.

Given the importance of the relationship between China and Switzerland and the increasing flow of investments since the signing of the free trade agreement, Deloitte launched a guide specifically tailored to Chinese investors seeking investment opportunities in Switzerland. This guide focused on the accounting and auditing frameworks in Switzerland and leveraged Deloitte’s professional knowledge to provide a comparison between Chinese Accounting Standards (CAS), International Financial Reporting Standards (IFRS) and Swiss Generally Accepted Accounting Principles (Swiss GAAP) covering major topics on:

• Overall accounting system
• Specific accounting requirements for different types of companies
• Comparison between CAS, IFRS and Swiss GAAP
• Two main forms of statutory audit

Some key considerations in terms of accounting standards are as follows:

• Companies can choose between international recognized reporting standards (IFRS or US-GAAP) and the Swiss reporting standards (Swiss GAAP FER).
• There are specific admission standards for investment and real estate companies and for collective investment schemes.
• The prohibition of reversals of impairment losses for property, plant and equipment under CAS differs from the explanations in GAAP.

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