Macao Special Administrative Region …

1 Macao Special Administrative Region Administrative Regulation Accounting Standards (Unofficial English Translation) The Chief Executive decrees, after hearing from the Executive Council and in accordance with the terms of Subsection 5) of Article 50 of the Basic Law of the Macao Special Administrative Region , as follows: Article 1 Object 1. The Accounting Standards, which comprise of the General Financial Reporting Standards, the Financial Reporting Standards and the financial statements, are hereby approved.

2 2. The General Financial Reporting Standards are published in Appendix 1, which is an integral part of the present Administrative regulation. 3. The Financial Reporting Standards are published in Appendix 2, which is an integral part of the present Administrative regulation. 4. The financial statements are published in Appendix 3, which is an integral part of the present Administrative regulation. Article 2 Definitions For the provisions of the present Administrative regulation, the expressions below have the following meanings: 1) The General Financial Reporting Standards refer to the abridged document to standardize the accounting of enterprises, which has adapted to the specific needs of the Macao Special Administrative Region and has made reference to the International Financial Reporting Standards.

3 2) The Financial Reporting Standards refer to the International Financial Reporting Standards; 3) The International Financial Reporting Standards refer to the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and the International Accounting Standards (IAS) issued by its predecessor, the International Accounting Standards Committee (IASC); 4) Financial statements refer to the balance sheet and income statement. Article 3 Objectives The objectives to approve the Accounting Standards, the accounting standardization document, are namely: 1) To supply investors and operators with true, objective, clarified and understandable financial information of the operating results of enterprises; 2) To adopt criteria and procedures which are in line with international standards in the preparation and presentation of financial statements.

4 3) To improve the accounting system and to regulate the operations of the entities referred to in Article 4. Article 4 Scope of Application 1. The entities listed below are required to adopt the Financial Reporting Standards in the preparation and presentation of financial statements: 1) Concessionary entities in Macao SAR; 2) Insurance companies; 3) Institutions governed by the Financial System Act; 4) Offshore companies, meaning those engaged in the activities governed by the Decree-Law of October 18; 5) Public companies; 6) Limited partnership by shares.

5 2. Entities, which are required by Special law to have organized accounting, are allowed to choose either the Financial Reporting Standards or the General Financial Reporting Standards in the preparation and presentation of financial statements in each operating year, and that the same set of standards should be applied in an operating year. Article 5 Publication 1. The Financial Reporting Standards, approved by the present Administrative regulation, are published in agreement with the official version of the International Financial Reporting Standards issued by the International Accounting Standards Board (IASB), without prejudice to the provisions in Article 10.

6 2. The International Accounting Standards Committee Foundation (IASCF) owns the copyright of the International Financial Reporting Standards, regardless of which translation versions, and the distribution, publication or reproduction of the respective Standards must be authorized by the Foundation. Article 6 Amendments of the Accounting Standards It is the competence of the Secretary for Economy and Finance to approve, by resolution, any amendments of the Accounting Standards approved by the present Administrative regulation. Article 7 Tax Concept of Properly Organized Accounting For the provisions in paragraph 2 of Article 4 of the regulations of Complementary Tax and paragraph 1 of Article 11 of the regulations of Professional Tax, properly organized accounting refers to the accounting organized in accordance to the Accounting Standards approved by the present Administrative regulation.

7 Article 8 Official Plan of Accounting The use of the Official Plan of Accounting specified in any other law or regulations shall be replaced by the use of the Accounting Standards as approved by the present Administrative resolution. Article 9 Revision The Accounting Standards, approved by the present Administrative regulation, shall be reviewed within two years from the date of mandatory application. Article 10 Interpretations and Explanations The Secretary for Economy and Finances may approve, by resolution, the interpretations and explanations that are necessary for the execution of the present Administrative regulation.

8 Article 11 Formats and Forms 1. The Financial Services Bureau shall modified the formats and forms currently in use to accommodate the provisions of the present Administrative regulation, and to publish new formats and forms when necessary, particularly for the provisions of the regulations of Complementary Tax. 2. The amendment and substitution of the formats and forms shall be approved by the Chief Executive, upon the proposal of the Director of the Financial Services Bureau. Article 12 Professional Code of Ethics for Accountants The Committee for the Registry of Auditors and Accountants has the responsibility to draft the Professional Code of Ethics for Accountants, to be approved by Administrative regulation.

9 Article 13 Transitory Provisions 1. The provisions in Article 4 shall be mandatory applied starting from 1st January 2007, and prior to that date, entities are allowed to use either the Accounting Standards or the Official Plan of Accounting. 2. If the entities referred to in the previous paragraph continue to apply the Official Plan of Accounting until 31st December 2006, the provisions in Article 7 and Article 8 are not applicable. Article 14 Revocation Provision The followings shall be revoked beginning 1st January 2007: 1) Decree-Law of 9th of July; 2) Article 10 of Decree-Law of 5th of March.

10 Article 15 Entry into Force The present Administrative regulation enters into force on the day following its publication. Approved on 9th December 2005. To be published. The Chief Executive, Ho Hau Wah