Business Administration, Management, and Operations Commons^™

Fdi Accounting In India And China: A Need For Harmonization, M. R. Shollapur, Suneel K. Maheshwari, Uday S. Tate

Management Faculty Research

The objective of this paper is to initiate discussions on standardizing the method for measuring Foreign Direct Investment (FDI) across countries. It is important to use consistent method so that there is a faithful representation of a country's investment climate and the information is relevant for the purpose of foreign investors. India and China measures Foreign Direct Investment (FDJ) using two different methods. India measures FDI on the basis of equity investments, whereas China includes certain items which do not strictly fall under the purview of FDI. Inclusion of items other than equity increases the reported FDI in China. It …