Stock Code: 002343 stock abbreviation: Ciwen Media Co.Ltd(002343) Announcement No.: 2022-009
Announcement on the provision for asset impairment
The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without falsehood
False records, misleading statements or material omissions.
Ciwen Media Co.Ltd(002343) (hereinafter referred to as “the company”) held the 16th meeting of the 8th board of directors and the 15th meeting of the 8th board of supervisors respectively on January 28, 2022. The meeting deliberated and adopted the proposal on the provision for asset impairment. The details of the company’s provision for asset impairment are hereby announced as follows:
1、 Overview of the provision for asset impairment this time
1. The reason, scope and total amount of the provision for asset impairment and the reporting period to be included
In accordance with the relevant provisions of the accounting standards for business enterprises, the accounting supervision risk tip No. 8 – impairment of goodwill, the stock listing rules of Shenzhen Stock Exchange and the company’s accounting policies of the CSRC, in order to truly and accurately reflect the company’s financial status, asset value and operating results as of December 31, 2021, based on the principle of prudence, the company Intangible assets, long-term equity investment, inventory, accounts receivable, goodwill, other receivables and other assets are inspected and analyzed, and impairment reserves are accrued for relevant assets that may have asset impairment losses. It is preliminarily estimated that the total provision for impairment in 2021 is about 241.45 million yuan. The provision for asset impairment has not been audited by an accounting firm.
After the asset impairment test, the company expects to withdraw various asset impairment reserves in 2021, as shown in the following table:
Estimated withdrawal amount of category project (10000 yuan)
Bad debt provision for accounts receivable 8682
Credit impairment loss bad debt provision for other receivables 1303
Provision for impairment of other debt investments 1153
Subtotal 11138
Inventory falling price reserves 11351
Asset impairment loss and technology goodwill impairment provision 1656
Subtotal 13007
Total 24145
The reporting period to be included in the provision for asset impairment is from January 1, 2021 to December 31, 2021.
2. The impact of the provision for asset impairment on the company
The provision for asset impairment is expected to be about 241.45 million yuan, which is expected to reduce the net profit attributable to shareholders of listed companies by about 214.12 million yuan in 2021. The provision of asset impairment loss is in line with the accounting standards for business enterprises and relevant accounting policies of the company, reflects the principle of accounting prudence and conforms to the actual situation of the company. After the provision of asset impairment loss, it can more fairly reflect the assets and operating conditions of the company in 2021, and there is no damage to the interests of the company and shareholders. The data of the company’s provision for asset impairment has not been audited, and the final data will be subject to the annual audit report issued by the accounting firm.
2、 Basis and method of withdrawing asset impairment provision this time
(I) credit impairment loss
According to the accounting standards for Business Enterprises No. 22 – recognition and measurement of financial instruments (CK [2017] No. 7), the company evaluates the expected credit risk and measures the expected credit loss based on a single financial instrument or a combination of financial instruments. When based on the combination of financial instruments, the company divides the financial instruments into different combinations based on the common risk characteristics. With reference to the experience of historical credit loss, combined with the current situation and the prediction of future economic conditions, the company calculates the expected credit loss through the default risk exposure and the expected credit loss rate in the next 12 months or the whole duration.
Determination method of credit loss of various financial assets:
1. Accounts receivable
The company calculates the expected credit loss of accounts receivable on the balance sheet date. If the expected credit loss is greater than the book amount of the current impairment provision of accounts receivable, the company recognizes the difference as the impairment loss of accounts receivable, debits the “credit impairment loss” and credits the “bad debt provision”. On the contrary, the company recognizes the difference as impairment gains and makes opposite accounting records. If the company has actually incurred credit losses and determines that the relevant accounts receivable cannot be recovered and is approved to be written off, it shall debit the “bad debt provision” and credit the “accounts receivable” according to the approved write off amount. If the write off amount is greater than the accrued loss provision, debit the “credit impairment loss” on a regular basis.
The company takes the actual credit loss of previous years and the forward-looking information of this year as the accounting estimation policy for measuring the expected credit loss.
2. Other receivables
The company measures the provision for loss of other receivables according to the following circumstances: ① the financial assets whose credit risk has not increased significantly since initial recognition are in the first stage, and the company measures the provision for loss according to the amount of expected credit loss in the next 12 months; ② If the credit risk has increased significantly since the initial recognition, but there is no credit impairment, it is in the second stage, and the company measures the loss reserve according to the amount equivalent to the expected credit loss of the financial instrument in the whole duration; ③ The purchase or source of financial assets with credit impairment is in the third stage, and the company measures the loss provision according to the amount equivalent to the expected credit loss in the whole duration.
Portfolio based assessment. For other receivables, the company is unable to obtain sufficient evidence of significant increase in credit risk at a reasonable cost at the level of single instrument, but it is feasible to evaluate whether the credit risk increases significantly on the basis of combination. Therefore, the company according to the type of financial instrument, credit risk rating, collateral type, initial recognition date, remaining contract term The industry of the borrower, the geographical location of the borrower and the loan mortgage rate are the common risk characteristics. Group other receivables and consider whether the credit risk has increased significantly based on the combination.
3. Other current assets
For the film and television project investment in which the company adopts the fixed return mode, based on the project cooperation and recovery possibility, for the sake of prudence, it is proposed to withdraw the impairment provision of other creditor’s rights investment at 50% of the book value.
(II) asset impairment loss
1. Inventory
The company’s inventory is measured at the lower of cost and net realizable value, and the inventory falling price reserves are withdrawn according to the difference between the cost of a single inventory and the net realizable value. For the inventory directly used for sale, its net realizable value shall be determined by the amount of the estimated selling price of the inventory minus the estimated selling expenses and relevant taxes in the normal production and operation process; For inventories that need to be processed, the net realizable value is determined by the estimated selling price of finished products minus the estimated cost to be incurred at the time of completion, estimated selling expenses and relevant taxes in the normal production and operation process; On the balance sheet date, if there is a contract price agreement for one part of the same inventory and there is no contract price for other parts, the net realizable value shall be determined respectively, and compared with its corresponding cost to determine the amount of inventory falling price reserves withdrawn or reversed respectively.
2. Goodwill
The goodwill was formed by the merger of Beijing Pro Technology Development Co., Ltd. (hereinafter referred to as “Pro Technology” in this announcement) in 2015. In view of the fact that the performance of Pro Technology in 2021 did not reach the profit forecast amount in 2021 in the 2020 evaluation report, the increased mobility of the company’s team and the weak ability of the asset group to generate cash flow in the future, for prudence, it is expected to fully withdraw the goodwill impairment provision for the net book value of Pro Technology’s goodwill in 2021.
3、 Approval procedures for the provision for asset impairment this time
The provision for asset impairment has been deliberated and approved at the 16th meeting of the 8th board of directors and the 15th meeting of the 8th board of supervisors; Independent directors have expressed independent opinions and agreed to withdraw the provision for asset impairment this time.
4、 Opinions of the audit committee of the board of directors, independent directors and the board of supervisors on the matter
1. Explanation on the reasonableness of the company’s provision for asset impairment by the audit committee of the board of directors
After reviewing the proposal on the provision for asset impairment, the audit committee of the board of directors of the company believes that the provision for asset impairment of the company this time complies with the provisions of the accounting standards for business enterprises and relevant accounting policies of the company, which is made based on the principle of prudence after the asset impairment test, and the basis is sufficient. After the provision for asset impairment is made, the company’s 2021 financial statements can more fairly reflect the company’s financial status, asset value and operating results as of December 31, 2021, making the company’s accounting information more reasonable. Therefore, the company agrees to withdraw the provision for asset impairment this time.
2. Opinions of the board of supervisors
After verification, the board of supervisors believes that the company’s provision for asset impairment in 2021 is in line with the relevant provisions of the accounting standards for business enterprises and the company’s relevant accounting policies. The basis is sufficient and the decision-making procedures are legal, which can more objectively and fairly reflect the company’s asset status and operating results, and is conducive to providing investors with more reliable financial information. Therefore, the board of supervisors agreed to withdraw the provision for asset impairment this time.
3. Opinions of independent directors
The independent directors believe that the company’s provision for asset impairment this time meets the requirements of the accounting standards for business enterprises and the company’s accounting policies. After the company’s provision for asset impairment, it can more objectively and fairly reflect the company’s asset status and operating results, and make the company’s accounting information about asset value more authentic, reliable and reasonable. The decision-making procedures of the board of directors for considering the matter are legal and compliant, and there is no situation that damages the interests of the company and shareholders, especially minority shareholders. We agree to the provision for asset impairment this time.
5、 Documents for future reference
1. Resolutions of the 16th meeting of the 8th board of directors;
2. Resolutions of the 15th meeting of the 8th board of supervisors;
3. Explanation on the reasonableness of the provision for asset impairment made by the audit committee of the board of directors;
4. Independent opinions of independent directors on matters related to the 16th meeting of the eighth board of directors.
It is hereby announced.
Ciwen Media Co.Ltd(002343) board of directors January 28, 2022
