In the era of the digital economy, data is a fundamental resource, an important productive force and a key production factor. Since data was listed as a production factor at the fourth plenary session of the 19^th Central Committee of the Communist Party of China (CPC Central Committee), the CPC Central Committee and the State Council have released multiple policy documents that have mapped out the development of data factor markets and created a strong synergy to advance data assetization. The CPC Central Committee and the State Council issued the Opinions on Establishing a Data Base System to Maximize a Better Role of Data Elements (hereinafter referred to as the “Opinions”) in December 2022, proposing to establish a data base system and maximize the value of data elements and providing a top-level design scheme for data element markets. Under the guidance of the Opinions, the Ministry of Finance issued the Interim Provisions on Accounting Treatment Relating to Enterprises’ Data Resources (hereinafter referred to as the “Interim Provisions”) in August 2023, defining the asset attributes of data, the scope of application of those includable in the financial statements, accounting treatment and use standards, and presentation and disclosure requirements, which came into force on January 1, 2024.

The introduction of the “Interim Provisions” marks the state’s establishment of the related institutional norm for data assets’ inclusion in the financial statements for the first time and is a solid step in promoting such inclusion.

Firstly, the official inclusion of data in enterprises’ financial statements marks data’ transformation from an abstract concept to a new type of asset that can bring tangible economic benefits to enterprises and help enterprises optimize resource allocation more accurately and improve operating efficiency. Secondly, in the process of including data in the financial statements, enterprises will gain a deeper understanding of their own data resources through the detailed classification and in-depth analysis of data assets, which will provide strong support for enterprises’ mining data value and exploring innovative applications. Thirdly, the transparent disclosure of data assets will significantly increase the visibility of enterprises’ data and provide a convenient way for other institutions and enterprises to find opportunities for cooperation and expand the space for cooperation, thereby attracting more enterprises to actively participate in data element markets and promote the development of thereof.

Although the countdown for including data assets in financial statements has begun in China, there are still numerous challenges that enterprises must overcome before they can truly include data assets in the financial statements.

On the one hand, the construction of a data value appraisal system is particularly complex due to the non-competitive, weakly exclusive, value heterogeneity and intangible nature of data assets.

On the other hand, the ambiguous data ownership system and the inactive data trading market also restrict the process of enterprise data assets’ inclusion in the financial statements.

Given these challenges, government departments, industry associations, research institutions, enterprises, etc. should cooperate to build an ecosystem that supports the inclusion of data assets in the financial statements.

Firstly, government departments should play a main role in institutional construction, market guidance and industry regulation, and provide an institutional framework and policy environment for data assetization and data assets’ standardized inclusion in the financial statements. Moreover, government departments should encourage market entities and social forces to actively participate in the construction of data element markets, build a multi-level data market system, and explore data price discovery mechanisms. Furthermore, the intangibility, complexity and technical dependence of data assets require finer management methods to ensure the authenticity and integrity of enterprise data assets included in the financial statements. Regulators should further specify the responsibilities and authority of data asset supervision, and establish dedicated institutions or teams to supervise enterprises’ disclosure of data assets, especially the disclosure of related data assets of listed companies.

Secondly, industry associations and research institutions can play a main role in coordination, supervision and research and should conduct research according to industry characteristics, establish data asset appraisal standards and methods, and promote industry self-discipline and enterprise data assets’ standardized disclosure. Furthermore, industry associations should also actively establish self-discipline mechanisms, including formulating data asset disclosure rules, bolstering guidance and training on data assets’ inclusion in the financial statements, and encouraging collaboration and communication amongst enterprises.

Thirdly, the primary function of enterprises is crucial in the specific implementation of data assets’ inclusion in the financial statements. First, enterprises must be acutely aware of the importance of data assets and take an active role in the appraisal and pricing of data assets. Second, enterprises should also be actively involved in the construction and system improvement of data markets. Finally, enterprises must pay high attention to data security and privacy protection in data trading activities. By putting these steps into place, enterprises can play a central role in the process of data assets’ inclusion in the financial statements, and propel the healthy development of data element markets.