Securities code: 300712 securities abbreviation: Fujian Yongfu Power Engineering Co.Ltd(300712) Announcement No.: 2021-133 Fujian Yongfu Power Engineering Co.Ltd(300712)
Announcement on changes in accounting estimates
The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.
Fujian Yongfu Power Engineering Co.Ltd(300712) (hereinafter referred to as “the company”) held the second meeting of the third board of directors and the second meeting of the third board of supervisors on December 14, 2021, and deliberated and adopted the proposal on changes in accounting estimates respectively. The relevant information is hereby announced as follows:
1、 Overview of changes in accounting estimates
1. Reasons for change
In accordance with the relevant provisions of the accounting standards for Business Enterprises No. 22 – recognition and measurement of financial instruments, considering the actual situation of the company, in order to more reasonably reflect the expected credit loss of contract assets and provide investors with more reliable and accurate accounting information, combined with the latest industrial policies and referring to the provision methods for impairment of contract assets of Companies in the same industry, The company changes the estimated loss rate of completed and unsettled assets related to income and not meeting unconditional collection rights in EPC business, so as to more objectively and fairly reflect the company’s financial status and operating results.
The contract asset impairment policy is as follows:
Contract asset impairment policy
The completed and unsettled assets refer to the historical credit loss experience, combined with the current situation and the prediction of future economic conditions, the default risk exposure of TONGCHAN and the expected credit loss rate in the next 12 months or the whole duration to calculate the expected credit loss
Aging combination of quality assurance deposit receivable
2. Accounting estimates adopted before this change
For the completed and unsettled assets of EPC business formed by transactions regulated in the accounting standards for Business Enterprises No. 14 – income standards, the company always calculates the expected credit loss through default risk exposure and expected credit loss rate in the next 12 months or the whole duration according to the reference to historical credit loss experience, combined with the current situation and the prediction of future economic conditions. The risk of expected credit loss is low, and no provision for asset impairment is made.
3. Accounting estimates adopted after this change
For the completed and unsettled assets of EPC business formed by transactions regulated in the accounting standards for Business Enterprises No. 14 – income standards, the company always calculates the expected credit loss through default risk exposure and expected credit loss rate in the next 12 months or the whole duration according to the reference to historical credit loss experience, combined with the current situation and the prediction of future economic conditions. In this part, the provision for asset impairment shall be withdrawn according to 1% of the balance of contract assets. 4. Date of change
The change of accounting estimates will be implemented from December 14, 2021.
2、 Impact of this change in accounting estimates on the company
According to the relevant provisions of the accounting standards for Business Enterprises No. 28 – changes in accounting policies, accounting estimates and error correction, this change in accounting estimates adopts the future applicable method for accounting treatment, does not require retroactive adjustment to the financial statements of previous years, and will not have an impact on the financial status, operating results and cash flow of previous periods.
It is estimated that the impact of this change in accounting estimates on the audited net profit of the latest fiscal year and the audited owner’s equity of the latest period does not exceed 50%. This change will not lead to changes in the nature of the company’s profit and loss in the next reporting period. According to the relevant provisions of the guidelines for the standardized operation of companies listed on the venture board of Shenzhen Stock Exchange, It is not necessary to submit it to the general meeting of shareholders for deliberation.
3、 Review procedures performed
1. Explanation of the board of directors on the change of accounting estimates
The second meeting of the third board of directors of the company deliberated and adopted the proposal on changes in accounting estimates and agreed to the changes in accounting estimates. The company changes the estimated loss rate of completed and unsettled assets related to income and not meeting unconditional collection rights in EPC business, so as to more objectively and fairly reflect the company’s financial status and operating results. There is no need to retroactively adjust the financial statements of previous years, and it will not have an impact on the financial status, operating results and cash flow of previous periods.
After deliberation, the board of directors of the company believes that this change in accounting estimates is in line with the actual situation of the company, can more objectively and fairly reflect the financial status and operating results of the company, and is in line with the interests of the company and all shareholders. 2. Deliberations of the board of supervisors
The second meeting of the third board of supervisors of the company deliberated and adopted the proposal on changes in accounting estimates and agreed to the changes in accounting estimates.
After deliberation, the board of supervisors of the company believes that the change of accounting estimates complies with the provisions of accounting standards for Business Enterprises No. 28 – changes in accounting policies and accounting estimates and error correction and relevant interpretations, can more objectively and fairly reflect the company’s financial situation and operating results, and is in line with the interests of the company and all shareholders.
3. Opinions of independent directors
The change of accounting estimates complies with the accounting standards for Business Enterprises No. 28 – changes in accounting policies, accounting estimates and error correction and relevant interpretations. In combination with the latest industrial policies, the company has fully considered its own actual situation and more reasonably reflected the expected credit loss of contract assets. This change in accounting estimates can more objectively and fairly reflect the company’s financial position and operating results, which is in line with the interests of the company and shareholders. The company’s deliberation procedures on this matter comply with the articles of association and relevant laws and regulations.
As an independent director of the company, we agree to the change of accounting estimates of the company.
4、 Documents for future reference
1. Resolutions of the second meeting of the third board of directors;
2. Resolutions of the second meeting of the third board of supervisors;
3. Independent opinions of independent directors on matters related to the second meeting of the third board of directors.
Fujian Yongfu Power Engineering Co.Ltd(300712) board of directors December 14, 2021
