Securities abbreviation: Canny Elevator Co.Ltd(002367) securities code: Canny Elevator Co.Ltd(002367) Announcement No.: 202207
Announcement on the provision for asset impairment in 2021
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.
Canny Elevator Co.Ltd(002367) (hereinafter referred to as “the company”) has conducted impairment test on the assets of the company with signs of impairment as of December 31, 2021 in accordance with the relevant provisions of the accounting standards for business enterprises, the company’s accounting policies, the guidelines for self discipline supervision of Listed Companies in Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board, and based on the principle of prudence, Impairment provision is made for assets that may have impairment losses. The details of the write off of bad debts and the provision for asset impairment are announced as follows:
1、 Overview of the provision for asset impairment and write off of assets this time
(I) basis and reasons for withdrawing asset impairment provision and writing off assets this time
In accordance with the accounting standards for business enterprises, the guidelines for self regulation and supervision of listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board and the accounting policies actually implemented by the company, based on the principle of prudence, in order to truly reflect the company’s financial situation and help to provide investors with more authentic, reliable and accurate accounting information, The company and its subsidiaries conducted a comprehensive inventory of notes receivable, accounts receivable, other accounts receivable, inventory, contract assets, long-term equity investment and other assets as of December 31, 2021, fully evaluated and analyzed the possibility of impairment of various assets, and determined the asset impairment reserves to be withdrawn. At the same time, in accordance with the accounting standards for business enterprises and relevant accounting policies of the company, individual accounts receivable and other accounts receivable that the company has conclusive evidence that they cannot be recovered have been written off.
(II) provision for asset impairment and write off of assets this time
In 2021, the total amount of the company’s provision for credit impairment and asset impairment for notes receivable, accounts receivable, other receivables, inventory, contract assets and long-term equity investment was 7707625811 yuan, and the amount of write off, recovery or reversal and write off of assets was 917340490 yuan.
The details are as follows:
Unit: Yuan
The opening balance of the project increases in the current period and decreases in the current period
Bad debt provision for notes receivable 675311841198453101 – 873764942
Bad debt provision for accounts receivable [Note 1] 17964899820355431690926548026621253736463
Bad debt provision for other receivables [Note 2] 13520344152121740729243 Sichuan New Energy Power Company Limited(000155) 4965487
Inventory falling price reserves [Note 3] 16052507963546988246426172241317332396
Provision for impairment of contract assets 22338228691787982905 – 4021805774
Provision for impairment of long-term equity investment – 1 Shanghai Pudong Development Bank Co.Ltd(600000) 000 – 1 Shanghai Pudong Development Bank Co.Ltd(600000) 000
Total 23831319741770762581191734049030621605062
Note 1: the bad debt provision of accounts receivable decreased by 2.6548 million yuan in the current period, which is unrecoverable and written off.
Note 2: the bad debt provision for other receivables decreased by 92400 yuan in the current period, which is unrecoverable and written off.
Note 3: inventory falling price reserves decreased by 6.4262 million yuan in the current period, which was caused by the write off of inventories with falling price reserves in the current period.
As of the balance sheet date (December 31, 2021), the company and its subsidiaries have checked the main accounts receivable with large amount of impairment one by one. The relevant evidence collected shows that the company is expected to be unable to recover the corresponding amount due to the main reasons such as bankruptcy, revocation, cancellation, serious breach of trust and no property for execution, resulting in long-term credit and no results of collection. In accordance with the accounting standards for business enterprises and the company’s accounting policies, the company will write off. After write off, the finance and business department of the company will establish the audit record of the written off receivables and other receivables, continue to make full recovery, retain the data that may be used for recovery in the future, continue to implement the person in charge to track at any time, and will recover immediately if it is found that the other party has solvency, which will not affect the debt settlement.
2、 Description of the current provision for asset impairment
(I) notes receivable, accounts receivable, other receivables and contract assets withdrawal
Taking into account the reasonable and reliable information about past events, current situation and prediction of future economic conditions, and taking the risk of default as the weight, the company calculates the probability weighted amount of the present value of the difference between the cash flow receivable under the contract and the cash flow expected to be received, and recognizes the expected credit loss.
If the credit risk of the financial instrument has increased significantly since the initial recognition, the company measures its loss reserves according to the amount equivalent to the expected credit loss of the financial instrument in the whole duration; If the credit risk of the financial instrument does not increase significantly after initial recognition, the company measures its loss reserves according to the amount equivalent to the expected credit loss of the financial instrument in the next 12 months. The increase or reversal amount of the loss reserves thus formed shall be included in the current profits and losses as impairment losses or gains.
The company compares the risk of default of financial instruments on the balance sheet date with the risk of default on the initial recognition date to determine the relative change of default risk during the expected duration of financial instruments, so as to evaluate whether the credit risk of financial instruments has increased significantly since the initial recognition.
If the credit risk of a financial instrument is low on the balance sheet date, the company considers that the credit risk of the financial instrument has not increased significantly since initial recognition.
If there is objective evidence indicating that a financial asset has been impaired, the company shall make provision for impairment of the financial asset on a single basis.
According to the above principles, the company expects to withdraw 198453101 yuan of bad debt provision for notes receivable, 3554316909 yuan of bad debt provision for accounts receivable, 212174072 yuan of bad debt provision for other accounts receivable and 1787982905 yuan of impairment provision for contract assets in 2021.
(II) description of provision for inventory falling price reserves
The company’s inventory shall be subject to impairment provision based on the difference between its net realizable value and book value. The net realizable value of finished products, goods in stock, materials for sale and other goods inventories directly for sale 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 process of production and operation; For the inventory of materials that need to be processed, in the normal production and operation process, the net realizable value is determined by the estimated selling price of the finished products minus the estimated cost to be incurred at the time of completion, estimated selling expenses and relevant taxes; The net realizable value of inventories held for the execution of sales contracts or labor contracts is calculated based on the contract price. If the quantity of inventories held is more than the quantity ordered in the sales contract, the net realizable value of excess inventories is calculated based on the general sales price.
According to the above principles, the company expects to withdraw inventory falling price reserves of 354698824 yuan in 2021.
(III) statement of provision for impairment of long-term equity investment
At the end of the reporting period, the long-term equity investment whose operation is lower than expected and there is no sign of improvement is judged to have signs of impairment. The company estimates the recoverable amount of these long-term equity investments on a prudent basis, and makes provision for asset impairment according to the difference between them and the book value, and the amount is expected to be 16 million yuan.
3、 The impact of the current write off of bad debts and the provision for asset impairment on the company
The total amount of credit impairment loss and asset impairment loss accrued by the company in 2021 is 7707625811 yuan, which will reduce the total profit of the company in 2021 by 7707625811 yuan; The total assets written off this time are 274723266 yuan, which will not affect the total profit of the company.
The amount of the company’s provision for asset impairment and write off of asset losses this time is the preliminary accounting data of the company’s financial department, which has not been audited by an accounting firm. The specific items and amounts of provision for asset impairment and write off of asset losses are subject to the audited financial report in 2021. Investors should pay attention to investment risks.
It is hereby announced.
Canny Elevator Co.Ltd(002367) board of directors
March 1, 2022
