Principles of preparation and presentation of financial statements in division, acquisition of enterprises
When partially dividing an enterprise into many new enterprises which have legal status or when acquisiting many enterprises into another enterprise, the divided or acqquisited enterprises must close accounting books, prepare financial statement as prescribed by law. In the first accounting period after division or acquisition, new enterprises must record accounting books and present financial statement in accordance with the following principles:
1. For accounting books recording assets, liabilities and owner‘s equity: All balances of assets, liabilities and owner‘s equity in the accounting books of the old enterprises are recorded an incurred balance in accounting books of the new enterprises. The "Opening balance‖ in accounting books of new enterprises has no figures.
2. For the Balance Sheet: All balances of assets, liabilities and owner‘s equity of the old enterprises prior to transformation are recorded an incurred balance of the new enterprises and are presented in the "Ending". The "Beginning" has no figures.
3. For income statements and cash flow statements: Figures from the time of transformation to the end of the first reporting period are shown in column "This time". The "previous" has no figures.

Source: Circular 200, Article 105