China Securities Tiantong Certified Public Accountants (special general partnership)
Reply to the inquiry letter on information disclosure of Anhui Andeli Department Store Co.Ltd(603031) reorganization draft issued by Shanghai Stock Exchange
Shanghai Stock Exchange:
According to the requirements of the inquiry letter on information disclosure of Anhui Andeli Department Store Co.Ltd(603031) reorganization case (hereinafter referred to as the inquiry letter) issued by your office on February 21, 2022, we, as the reference reviewing accountant of Anhui Andeli Department Store Co.Ltd(603031) (hereinafter referred to as “the company” and ” Anhui Andeli Department Store Co.Ltd(603031) “), have carefully analyzed the financial issues related to the inquiry letter Check and reply as follows:
Question 3. The draft discloses that according to the review report of listed companies for the reference, after the completion of this transaction, as of August 31, 2021, 2834694 million yuan of goodwill will be formed in the consolidated balance sheet of listed companies, accounting for 384.87% of the net assets of listed companies belonging to the parent company in the reference statement. The company is requested to make supplementary disclosure: (1) calculation process and recognition basis of goodwill; (2) Whether this transaction and the previous major asset reorganization constitute a package deal, explain whether the calculation of goodwill amount complies with the relevant provisions of accounting standards, and fully prompt the risk of goodwill impairment. Financial consultants and accountants are invited to express their opinions.
Company reply:
1、 Calculation process and recognition basis of goodwill.
Article 13 of the accounting standards for Business Enterprises No. 20 – business combination stipulates: “the acquirer shall allocate the combination cost on the acquisition date and recognize the identifiable assets, liabilities and contingent liabilities of the acquiree obtained in accordance with the provisions of Article 14 of these standards. (I) The acquirer shall recognize the difference between the combination cost and the fair value of the identifiable net assets of the acquiree obtained in the combination as goodwill. “
Since the target companies of the previous transaction and this transaction are both Yajin technology, and the interval between the two transactions is short and constitute a package transaction, in order to help investors fully understand the impact of the two transactions on the financial situation of the listed company, it is assumed that the previous transaction and this transaction of the company will be completed on January 1, 2020 for the preparation of the consolidated financial statements. The goodwill of the company is generated by the simulated merger of Ningbo Yajin Electronic Technology Co., Ltd. (hereinafter referred to as “Yajin technology”). The transaction consideration (merger cost) for the company’s purchase of 36.00% equity of Yajin technology and the proposed purchase of 15.00% equity of Yajin technology is 3678 million yuan. The fair value of the identifiable net assets of the acquiree Yajin technology on the purchase date is 1653541200 yuan, Among them, the fair value of Anhui Andeli Department Store Co.Ltd(603031) share is 843306 million yuan, and the company recognizes 2834694 million yuan as goodwill as the difference between the merger cost and the share of identifiable net assets of the acquiree.
The specific calculation process of goodwill is as follows:
Unit: 10000 yuan
Project amount
First acquisition of 36.00% equity
(1) Transaction consideration 24000000
(2) Dividends declared to be paid before acquiring equity 720000
(3) Fair value of identifiable net assets of Yajin technology 16535412
(4) Anhui Andeli Department Store Co.Ltd(603031) shareholding ratio 36.00%
(5) After the acquisition, Anhui Andeli Department Store Co.Ltd(603031) enjoys the fair value of identifiable net assets of Yajin Technology (3) (4) 5952748
(6) Goodwill (1) – (2) – (5) 17327252
The second acquisition of 15.00% equity transaction
(1) Transaction consideration 13500000
(2) Dividends declared before equity acquisition
(3) Fair value of identifiable net assets of Yajin technology 16535412
(4) Anhui Andeli Department Store Co.Ltd(603031) shareholding ratio: 15.00%
(5) After the acquisition, Anhui Andeli Department Store Co.Ltd(603031) enjoys the fair value of identifiable net assets of Yajin Technology (3) (4) 2480312
(6) Goodwill (1) – (2) – (5) 11019688
The goodwill of the two cumulative acquisitions of 51.00% equity amounted to 28346940
2、 Whether this transaction and the previous major asset reorganization constitute a package deal, indicating whether the calculation of goodwill amount complies with the relevant provisions of accounting standards.
(I) whether this transaction and the previous major asset restructuring constitute a package deal
According to Article 51 of the accounting standards for Business Enterprises No. 33 – consolidated financial statements and relevant application guidelines, if the terms, conditions and economic impact of each transaction meet one or more of the following circumstances, multiple transactions shall generally be accounted for as a package transaction:
(1) These transactions are concluded at the same time or in consideration of mutual influence;
(3) The occurrence of one transaction depends on the occurrence of at least one other transaction;
(4) A transaction is uneconomic alone, but it is economical when considered together with other transactions. According to the relevant provisions of the above accounting standards for business enterprises, the company analyzes whether it meets the relevant conditions from four aspects, as follows:
1. The two transactions are concluded at the same time or considering the influence of each other
According to the 36% share transfer agreement of Yajin technology signed between the company and Ningbo Yafeng, Ningbo Yafeng has the right to require the listed company to further acquire the remaining equity of Yajin technology when certain conditions are met after the transaction is completed.
In addition, in addition to acquiring 36% of the equity of Yajin technology in cash, Ningbo Yafeng also irrevocably entrusts the voting rights corresponding to its 562553100 shares (accounting for 15% of the total share capital of Yajin Technology) to Anhui Andeli Department Store Co.Ltd(603031) exercise, and the period of voting rights is until Anhui Andeli Department Store Co.Ltd(603031) or the enterprise under its control acquires the entrusted shares. That is, subsequent transactions have been considered in the previous transaction.
According to the 15% share transfer agreement of Yajin technology signed by the company, Anfu energy and Ningbo Yafeng, in order to further consolidate and strengthen Anhui Andeli Department Store Co.Ltd(603031) the control over Yajin technology, Anhui Andeli Department Store Co.Ltd(603031) plans to take Anfu energy, its holding subsidiary, as the acquisition subject, Further acquire all the above voting entrusted shares held by it from Ningbo Yafeng (accounting for 15% of the total share capital of Yajin Technology), so as to realize that Anfu energy directly holds 51% of the shares of Yajin technology. That is, the underlying assets acquired in this transaction are the corresponding shares entrusted with voting rights in the previous transaction.
Therefore, this transaction and the previous major asset restructuring are in line with article ① of the judgment of package transactions, that is, these transactions are concluded at the same time or considering the mutual influence.
2. Two transactions as a whole can achieve a complete business result
The commercial results of the two transactions of the listed company were to obtain the control of Yajin technology and then the control of Nanfu battery. After the completion of the previous transaction, the listed company has obtained 51% of the voting rights of Yajin technology, of which 15% of the voting rights are entrusted by the voting rights of the equity of Yajin technology held by Ningbo Yafeng. In order to control the target company for a long time and stably, the listed company needs to further increase the equity of the target company directly held by the listed company. This transaction is to further strengthen the stability of the control over Yajin technology. After the completion of this transaction, the listed company will directly hold 51% equity of Yajin technology through its holding subsidiary.
Therefore, the two transactions of the listed company are to achieve the commercial result of obtaining the control of Yajin technology and then the control of Nanfu battery, which is in line with article ② of the judgment of package transactions, that is, these transactions can achieve a complete commercial result as a whole.
3. The occurrence of this transaction depends on the occurrence of the previous major asset restructuring
The two transactions of the listed company are to obtain the control of Yajin technology and then the control of Nanfu battery. This purchase of 15% equity of Yajin technology is based on the completion of the previous purchase of 36% equity of Yajin technology. Therefore, this transaction and the previous major asset restructuring comply with article ③ of the judgment of package deal, that is, the occurrence of one transaction depends on the occurrence of at least one other transaction.
4. A transaction is uneconomic alone, but it is economical when considered together with other transactions
According to the appraisal report (wzlgxb Zi (2021) No. 293) issued by Zhonglian Guoxin, taking August 31, 2021 as the appraisal base date, the appraisal value of all shareholders’ equity of Yajin technology is 9235763700 yuan, and the corresponding appraisal value of 36% equity of Yajin technology is 3324874900 yuan. Ningbo Yafeng subsequently acquired the remaining shares of Yajin technology in order to lock in the listed company, Taking other factors into account, a large discount was made on the transaction price of 36% equity of Yajin technology, and the final transaction price was 240 million yuan. The appraisal value corresponding to the acquisition of 15% equity of Yajin technology is 1385364600 yuan. Considering that a large discount has been made in the previous transaction price, there is no discount except for the cash dividend of 2 Fiyta Precision Technology Co.Ltd(000026) 00 yuan after the benchmark date, and the final transaction price is 1350 million yuan. Looking at the 36% equity transfer price of Yajin technology alone, it is not economical for Ningbo Yafeng, but considering the two transaction prices comprehensively, it is more economical for both parties.
Therefore, this transaction and the previous major asset restructuring conform to article ④ of the judgment of package deal, that is, a transaction is uneconomic alone, but it is economical when considered together with other transactions.
To sum up, the proposed acquisition of 15% equity of Yajin technology and the previous major asset restructuring comply with the relevant provisions of the accounting standards on package transactions and constitute a package transaction.
(II) explain whether the calculation of goodwill amount complies with the relevant provisions of accounting standards
Article 11 of the accounting standards for Business Enterprises No. 20 – business combination stipulates that the acquirer shall determine the combination cost according to the following circumstances: (II) for business combination realized step by step through multiple exchange transactions, the combination cost is the sum of the costs of each single transaction.
The accounting standards for Business Enterprises No. 20 – Application guide for business combinations stipulates that: (III) business combinations realized step by step. According to Article 11 (II) of these standards, for business combination realized step by step through multiple exchange transactions, the combination cost is the sum of the costs of each single transaction. On the date of purchase, the purchaser shall handle it according to the following steps:
1. Adjust the book value of the investment originally held to the acquiree to the original acquisition cost, and adjust the owner’s equity items such as retained earnings accordingly.
2. Compare the cost of each single transaction with the share of the fair value of the investee’s identifiable net assets at the time of the transaction, and determine the amount of goodwill that should be recognized in each single transaction (or the amount of profit and loss that should be recognized). 3. The goodwill (or the amount included in the profit and loss) recognized by the purchaser on the acquisition date shall be the sum of the goodwill (or the amount to be recognized in the profit and loss) generated by each single transaction.
Anhui Andeli Department Store Co.Ltd(603031) for the first time, when acquiring 36.00% equity of Yajin technology, the purchase price was 240 million yuan. Before acquiring 36.00% equity of Yajin technology, Yajin technology announced to pay a cash dividend of 200026 million yuan (the corresponding cash dividend of 72 million yuan for 36% equity of Yajin Technology), and the fair value of identifiable net assets was 5952748 million yuan, The goodwill exceeding the fair value was recognized as 17327252 million yuan; When it was proposed to acquire 15.00% equity of Yajin technology for the second time, the acquisition price was 1.35 billion yuan, and the fair value of identifiable net assets was 2480312 million yuan. The goodwill exceeding the fair value was 11019688 million yuan, with a total goodwill of 2834694 million yuan.
3、 Accountant’s verification opinion
After verification, the accountant believes that the specific calculation basis of the amount of goodwill formed by the company in this reorganization is reasonable; The judgment basis of the company that this transaction and the previous major asset reorganization constitute a package transaction is sufficient, and the calculation of the amount of goodwill complies with the relevant provisions of accounting standards.
