Chinese Accounting systems

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The accounting research is here:

www.decomputis.org/dc/articulos_doctrinales/solas_ayhan7.pdf

It used to be before Chinese New Year that all debts were cleared
before the new year. But this changed with modern thinking. Can some
one tell me when - by reading this article. I'm not quite sure when it
was.

Part of my presentation on CNY - so it must have been after this date:

" Australia – 1876. January 26 was the Chinese New Year's Day, being
the beginning of the second year of the present Emperor of China, The
last days of the old year were spent, as usual, in making up accounts
and paying off debts, wherever the debtors could manage to do so, it
being a rule among these benighted heathens to begin the New Year free
from debt, and at friendship with all mankind. "

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Subsequent to the developments reported in this paper China cut loose from the inhibiting traditionalist framework when the Qing Dynasty fell in 1911. The country began to modernize as part of a new cultural renaissance, particularly following the May Four Movement in 1919. Radical reformists actively adopted western accounting. Despite this change accounting development in China lagged behind Japan. After World War II both countries rebuilt their economies and again embarked on very different paths. While China became a centrally controlled communist regime in 1949 and developed its fund-based accounting system for a closed-door economy,

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A comparative study of accounting adaptation: China and Japan during the Nineteenth Century. www.allbusiness.com/professional-scientific/accounting-tax/404754-1.html

The Chinese accounting system was fairly well established in the government sector as early as the Western Zhou Dynasty (1122-771 B.C.). During this period there was sophisticated budgetary control and single-entry bookkeeping systems. The so-called sanzhufa ('three-pillar balancing method'), was introduced to enable the imperial court to keep track of government assets. The reporting format focused on the balance of surplus or net assets at the end of the accounting period, as shown in the equation: revenues minus disbursements equals surplus. The name, 'three-pillar balancing method', captured the relationship between the three variables used in this method.

As a result of economic growth, the private sector subsequently took the lead in accounting development, and businessmen were largely responsible for introducing the improved shizhufa ('four-pillar balancing method') during the Tang Dynasty (A.D. 618-907). This method took into account the balance brought forward from the previous period and the reporting format focused on the relationship of the four variables shown in the equation: opening balance plus revenues minus disbursements equals closing balance. An important accounting innovation emerged during the mid- 15th century when the sanjiao zhang ('three-leg bookkeeping method') was created. This contained features of both single-entry and double-entry record keeping. The recording method earned the name 'three legs' because double-entry was used for recording credit transactions and single-entry for recording cash transactions [Guo, 1988; Lu, 1999; Auyeung, 2000].

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n the late Ming Dynasty (1368-1644) and the early Qing Dynasty (1644-1911) a more sophisticated accounting technique, the longmen zhang ('dragon-gate bookkeeping method') was created. This was a primitive double-entry system with two main advantages. It facilitated the accuracy of the account books by periodically balancing the books and extracting a trial balance, and it also permitted profit determination. The characteristic feature of dragon-gate bookkeeping can be seen in the equation: revenues minus disbursements equals assets minus owners' equity and liabilities. Both sides of the equation by implication measured profit on a cash basis.
The next milestone in Chinese accounting was the development of the shijiao zhang ('four-leg bookkeeping method') in the 18th century. The new method was also known as the tiandi panzhang ('heaven-and-earth bookkeeping method') in Taiwan (Hsu, 1988a). This was an improvement on previous methods because broader account classification and greater use of subsidiary records accommodated more complex and a larger volume of transactions. Under the four-leg bookkeeping method all transactions, both cash and non-cash, were recorded in the journals and posted to the ledgers using double-entry procedures. The term 'four-leg' was used to distinguish this extension of the double-entry technique from the preceding 'three-leg' method [Guo, 1988; Lu, 1999; Auyeung, 2000].

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1919 - OLD CHINESE CUSTOMS GO. The beneficial effects of restricted credits in China since the war started in 1914 which have forced the Chinese merchants to do business pretty much on a cash basis, were particularly noticeable in the unusually small number of failures last Chinese New Year’s Day.
Prior to the war and from time immemorial this annual settlement day has entailed efforts of every sort on the part of the Chinese to raise money for liquidating their debts accumulated during the year. Frequently they have had to sell much of their stock in business at a great loss, even personal property as well, in order to raise sufficient funds to "save their face," as it is called. An annual street fair for the sale of all sorts of property, personal and otherwise, has been an old-established custom in Canton and Shanghai for generations, while at the same time both foreign and domestic banks have placed large sums on accommodation.
It is said also that the Chinese business men have come to see the advantages of the new system, and that in all probability they will never go back to the old. Evening Post, Volume XCVII, Issue 86, 12 April 1919, Page 11