The Measures for the Administration of Pre-tax Deduction of Asset Losses of Enterprises (Guo Shui Fa [2009] No.88) adopts a "positive enumeration" approach to the scope of asset losses calculated and deducted by enterprises themselves, which includes the following six aspects:

1. Loss of assets caused by sales, transfer and sale of fixed assets, productive biological assets and inventories in the normal operation and management activities of enterprises;

2. The normal loss of various inventories of the enterprise;

3. Losses from normal scrapping and cleaning of fixed assets of enterprises that have reached or exceeded their service life;

4. Asset losses caused by the normal death of productive biological assets of enterprises that reach or exceed the service life;

5. Losses incurred by enterprises in buying and selling bonds, stocks, funds and financial derivatives through securities exchanges and inter-bank markets in accordance with relevant regulations;

6. Other losses of assets confirmed by State Taxation Administration of The People's Republic of China without the approval of the tax authorities.

That is to say, the enterprise can calculate and deduct the asset losses in the above six aspects, and the asset losses outside the above scope must be approved by the tax authorities before tax deduction.