Under the original accounting standards and accounting system, the “capital reserves” is a rather special ledger accounts confused, is the play called “cornucopia” account. Premium content including capital, donated its accounting preparation, preparation, equity investment funds in non-cash assets transferred and the associated foreign currency capital conversion difference, trading post, and other capital surplus to seven items, which other capital surplus include cash donations, debt restructuring, capital reserve preparation, are genuinely unable to pay the amounts due. Under the new system of accounting standards, accounting of capital reserve a large change in content, mainly in the following areas:
First, the original “capital reserves” non-recurring profit and loss accounts of of content to the “business operating income” accounts
In order to prevent corporate earnings manipulation in listed companies and in particular of whitewashing accounting statements, former accounting standards system and some non-recurring profit and loss accounting system counted into “capital reserves”, such as donation associated earnings, restructuring proceeds, the Government earmarked funds, trading post, unable to pay the amounts due. The accounting treatment is not in line with international practice, violate the principle of symmetry of the accounting treatment, resulting in a micro-distortion of accounting information, macroeconomic information is untrue.
In recent years, significant improvement of the governance structure of listed companies in China, market regulation and more robust, greatly improving audit quality of CPA, investors discriminant analysis capacity increased gradually. In this economic environment, the new accounting system and the international convergence of accounting standards system, timely adaptation of the corresponding criteria.
1. donation of changes in accounting treatment
Original accounting standards system and the system requires cash donation directly credited to “capital reserve—other capital reserves”; non-cash assets donation amount after deducting the income tax payable was credited “capital reserve—accepting non-cash assets to prepare”, at the time of donation asset disposal, “capital reserve—other capital reserves”.
New guidelines system for donation of accounting processing, no specific guidelines on its for specification, but under enterprise accounting guidelines—basic guidelines under of 38th article on gains and loss of defined: “directly meter into Dang period profit of Lee was and loss, is means should meter into Dang period profit and loss, and will led owner interest occurred decrease changes of, and and owner inputs capital or to owner distribution profit has nothing to do of Lee was or loss. “Thus, donation proceeds in” business operating income “accounts.
2. changes of debt recombination accounting treatment of receipts
Original debtor of the debt restructuring guidelines debt restructuring proceeds should be recognized as the “capital reserve—other capital reserves”.
After modifying the enterprise accounting standard 12th—debt restructuring provides debtor debt restructuring proceeds directly included in the profit and loss, which means that debt restructuring proceeds should be treated as profits, in the “business operating income” accounts.
3. change of accounting treatment of specific government funding
Original accounting guidelines system not on Government special funding of accounting processing made provisions, but enterprise accounting system under provisions, national on enterprise technology, and technology research, project of special funding, enterprise should in received Shi, provisional for long-term liabilities processing; moved project completed Hou, belonging to costs and by provisions be accounting of part, directly rushed reduction long-term liabilities, belonging to formation assets value of part, remember into “capital public product—funding into”.
16th in new accounting system of the enterprise accounting standards—Government grants, Government grant related to the assets is divided into Government for Government grants and income-related subsidies.
And Government grants related to assets, refers to the enterprises, forming long-term assets for the acquisition or construction, or in any other way of government subsidies. According to this definition, belong to specific government funding Government grants related to assets. And Government grants related to assets, Government grant guidelines section seventh: “Government benefits associated with the asset should be recognised as deferred income, and life of the related assets using redistribution accounted for in the current profits and losses. However, in accordance with the measurement of the nominal amount of government subsidy, directly included in the profit and loss account. ”
This shows that enterprises receive specific government funding, should be “deferred income” accounts, and from the related asset for its intended use, in the average service life of the asset allocation, accounted for in the period of “business operating income”.
4. unfair related transaction price difference accounting changes
According to the Ministry of finance and accounting [2001]64, between the related parties of the interim provisions on the sale of assets relating to accounting, listed companies and related parties unfair related trade between the formation of the post, considered associated parties on the donation of a listed company, “trading post associated capital reserve—” accounts.
New accounting standards system—the accounting standard for business enterprises in the 36th, related party disclosures, the accounting treatment of these matters is not clear, but I think the unfair affiliated transactions generate donations related transaction price difference between the Visual and related parties, reference should be made donations accounting for accounting, related trade post income shall be credited to “business operating income”.
5. unable to pay amounts due changes in accounting
Under the original system of accounting standards and accounting systems, unable to pay the amounts due according to the established procedures approved PostScript to “capital reserve—other capital reserves”.
Under the new accounting standard for business enterprises—basic guidelines on the definition of gains and losses, unable to pay the amounts due in accordance with the regulations after the approval of the program should be as profits for the current period, in the “business operating income” accounts.
Second, foreign currency capital conversion difference no longer exists
Provided for in the accounting system for business enterprises in the case of contractual exchange rates, foreign currency capital should be determined according to the exchange rate of the contract, contract and recorded in foreign currency assets of the exchange rate the exchange rate of the different foreign currency capital conversion difference, “capital reserves” separate account established under.
New enterprise accounting standards promulgated in 19th—article tenth of the translation: “foreign currency trading should be at the time of initial recognition, using the spot exchange rate of the transactions took place today will convert the foreign currency amount for bookkeeping standard currency amount; can also be used in accordance with reasonable method to determine the system, and the approximate exchange rate for transactions occurring daily spot rates. ”
Therefore, in accordance with new accounting standards, foreign currency capital belonging to the non-monetary foreign currency items, Enterprise received capital from investors invested in foreign currencies, used trading day the spot exchange rate, instead of contractual exchange rate, currency of invested capital and the corresponding amount of bookkeeping standard currency monetary items does not have foreign currency capital conversion difference between.
Third, the capital reserve of prepared in an increase in the content of the project
Preparing projects have two characteristics: first, as a result of the growth is mainly the book growth equity, and not the actual flow of funds, in the relevant assets were disposed of, transfer, value-added part can be realized and second, with instability, often as you change the underlying value of its value fluctuations. Under the original system of accounting standards and accounting system, the “capital reserves” accounting for equity investment ready to have the above characteristics. New accounting system to the accounting treatment of some economic business increased provisions and introduce “fair value” concept, “capital reserves” prepared under the project content has increased.
According to the new accounting standard for business enterprises promulgated in 2nd—of long-term equity investments, equity method accounting of long-term equity investment in investee unless changes in the interests of owners other than the net profit or loss, calculated according to the share of enterprises shall be entitled to the shares, credited or debited “capital reserves” account. That and the original accounting methods consistent.
Original system of norms and regulations, investment transfer, the “capital reserve—equity investment ready” into “capital reserve—other capital reserves”, “capital reserve—other capital reserves” can be used to increase capital.
Worth noting is that not clear accounting of equity method of accounting standards issued by the new formation of equity investment ready to invest how to dispose of. References—the 22nd, the enterprise accounting standards financial instruments recognition and measurement, and the enterprise’s accounting standard 3rd—accounting treatment related to the provisions of the investment real estate, I believe that, at the time of transfer of long-term investment, reselling and related capital reserves, at the same time shall be debited or credited “investment income”.
According to the new accounting standard for business enterprises promulgated in 22nd—, financial instruments recognition and measurement, the balance sheet date, available for sale financial asset’s fair value and the difference between the book balance should be recognized as capital reserve; at the time of transfer of available for sale financial assets, reselling and related capital reserve, included in the current profits and losses.
According to new promulgated of enterprise accounting guidelines 3rd,—investment sexual real estate under, use real estate or stock conversion for used fair value mode measurement of investment sexual real estate Shi, investment sexual real estate in accordance with the conversion day of fair value pricing, conversion day of fair value is less than original book value of, its difference meter into Dang period profit and loss; conversion day of fair value is greater than original book value of, its difference meter into “capital public product”. When the disposal of the investment real estate, reselling of capital surplus associated and accounted for in the current profits and losses.
Four, to equity settled Share-based Payment in exchange for employee services or other parties, without prior to exercise, temporary “capital reserves” accounting
Under the accounting standard for business enterprises, the 11th—of Share-based Payment, equity settled Share-based Payment for employees or other parties to provide services, should be the fair value of equity instruments granted, to debit “management fees” and other subjects are credited to “capital reserve—other capital reserves”. Date, Enterprise according to the actual number of equity instruments the right to line, debited “capital reserve—other capital reserves”, credited to “share capital” (“paid-up capital”) or “units in stock”, according to its balance debit or credit “capital reserve premium—capital”.
In short, the capital reserve accounting under the new accounting standard system streamlines the content of many, mainly include capital premium and temporary projects. Set up two second-level detail subjects in accounting, “capital premium” and “other capital reserves”. The original “capital reserve turn—funding” and “foreign currency capital conversion difference”, “related trade post” balance transfer “capital reserve—other capital reserves”, “equity investment ready” and “accepting non-cash assets donation prepared” after the disposal of assets into “capital reserve—other capital reserves”.
Worth note of is, go increased capital Shi, implementation new accounting guidelines zhiqian formation of “other capital public product” and the implementation new accounting guidelines zhihou, original guidelines and system Xia formation of “equity investment prepared”, and “accept donation non-cash assets prepared” in related assets disposal Hou into “capital public product—other capital public product” of amount can for go increased capital; implementation new accounting guidelines zhihou, new occurred of economic business formation of “other capital public product” cannot for go increased capital.