Shenzhen Institute Of Building Research Co.Ltd(300675)
Announcement on provision for 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.
Shenzhen Institute Of Building Research Co.Ltd(300675) (hereinafter referred to as "the company") based on the principle of prudence, in order to truly and accurately reflect the company's financial, assets and operating conditions in accordance with the self regulatory guidelines for listed companies on Shenzhen Stock Exchange No. 2 - standardized operation of GEM listed companies, business handling guidelines for GEM listed companies No. 2 - matters related to periodic report disclosure, accounting standards for business enterprises and relevant accounting policies of the company, A comprehensive inventory of various inventories, accounts receivable, contract assets, other receivables, long-term equity investment, fixed assets, construction in progress, intangible assets and other assets within the scope of the consolidated statements as of December 31, 2021 was conducted. The possibility of impairment of various assets is fully evaluated and analyzed, the signs of possible impairment are judged, and the asset impairment reserves to be withdrawn are determined.
According to the relevant provisions of Shenzhen Stock Exchange self regulatory guidelines for listed companies No. 2 - standardized operation of GEM listed companies, the provision for asset impairment does not need to be submitted to the board of directors or the general meeting of shareholders for deliberation. 1、 Asset scope and total amount of the current provision for asset impairment
The assets for which provision for asset impairment is made this time include accounts receivable, contract assets and other receivables. The total amount of provision for impairment is 619436008 yuan. See the following table for details:
Unit: Yuan
Current amount of the project
Bad debt provision for other receivables -11871057
Impairment loss of contract assets 102404689
Impairment loss of accounts receivable 528902376
Total 619436008
Note: the impairment loss of other non current assets refers to the impairment loss of contract assets reclassified to other non current assets according to liquidity
2、 Recognition standard and withdrawal method of credit impairment loss and asset impairment loss withdrawn this time
The provision for credit impairment this time mainly includes accounts receivable, other receivables and contract assets. On the balance sheet date, if the impairment is indicated according to the relevant accounting policies and accounting estimates of the company, the company shall withdraw the impairment provision according to the regulations.
(I) recognition standard and provision of credit impairment loss
On the basis of expected credit loss, the company conducts impairment accounting treatment for financial assets measured at amortized cost and recognizes loss reserves.
Other financial assets held by the company measured at fair value are not applicable to the expected credit loss model, including debt investments measured at fair value and whose changes are included in the current profit and loss.
Expected credit loss refers to the weighted average value of credit loss of financial instruments weighted by the risk of default. Credit loss refers to the difference between all contract cash flows receivable according to the contract and all cash flows expected to be received by the company discounted at the original effective interest rate, that is, the present value of all cash shortages.
When measuring the expected credit loss, the longest term that the company needs to consider is the longest contract term that the enterprise faces credit risk (including considering the option of renewal).
Expected credit loss in the whole duration refers to the expected credit loss caused by all possible events of default in the whole expected duration of financial instruments.
The expected credit loss in the next 12 months refers to the expected credit loss caused by the possible default of financial instruments within 12 months after the balance sheet date (if the expected duration of financial instruments is less than 12 months, it is the expected duration), which is a part of the expected credit loss in the whole duration.
For accounts receivable, the company always measures its loss reserves according to the amount equivalent to the expected credit loss in the whole duration. The company calculates the expected credit loss of the above financial assets based on the historical credit loss experience and the reserve matrix. The relevant historical experience is adjusted according to the specific factors of the borrower on the balance sheet date and the evaluation of the current situation and future economic situation forecast.
Except for accounts receivable, the company measures the loss reserves of financial instruments that meet the following conditions according to the amount equivalent to the expected credit loss in the next 12 months, and other financial instruments according to the amount equivalent to the expected credit loss in the whole duration:
1. The financial instrument has only low credit risk on the balance sheet date;
2. The credit risk of the financial instrument has not increased significantly since initial recognition.
If the default risk of a financial instrument is low, the borrower has a strong ability to perform its contractual cash flow obligations in the short term, and even if there are adverse changes in the economic situation and business environment over a long period of time, it may not necessarily reduce the borrower's ability to perform its contractual cash flow obligations. The financial instrument is considered to have low credit risk.
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.
When determining whether the credit risk has increased significantly since initial recognition, the company considers reasonable and based information, including forward-looking information, that can be obtained without unnecessary additional costs or efforts. The information considered by the company includes:
1. The debtor fails to pay the principal and interest on the due date of the contract;
2. Serious deterioration of external or internal credit rating (if any) of financial instruments that have occurred or are expected; 3. Serious deterioration of the debtor's operating results that has occurred or is expected;
4. The existing or expected changes in the technical, market, economic or legal environment will have a significant adverse impact on the debtor's repayment ability to the company.
According to the nature of financial instruments, the company assesses whether the credit risk has increased significantly on the basis of single financial instrument or combination of financial instruments. When evaluating based on the combination of financial instruments, the company can classify financial instruments based on common credit risk characteristics, such as overdue information and credit risk rating. If it is overdue for more than 30 days, the company determines that the credit risk of financial instruments has increased significantly.
The company believes that financial assets are in default under the following circumstances:
The borrower is unlikely to pay its arrears to the company in full, and the evaluation does not consider recourse actions taken by the company, such as realizing collateral (if held); Or financial assets overdue for more than 90 days.
The company assesses whether the financial assets measured at amortized cost have been impaired on the balance sheet date. When one or more events that have an adverse impact on the expected future cash flow of a financial asset occur, the financial asset becomes a financial asset with credit impairment. The evidence of credit impairment of financial assets includes the following observable information:
1. Significant financial difficulties of the issuer or debtor;
2. The debtor violates the contract, such as default or overdue payment of interest or principal;
3. The company gives concessions that the debtor will not make under any other circumstances due to economic or contractual considerations related to the debtor's financial difficulties;
4. The debtor is likely to go bankrupt or carry out other financial restructuring;
5. The issuer or debtor's financial difficulties lead to the disappearance of the active market of the financial assets.
In order to reflect the changes of credit risk of financial instruments since initial recognition, the company remeasures the expected credit loss on each balance sheet date, and the increase or reversal amount of loss reserves shall be included in the current profit and loss as impairment loss or gain. For financial assets measured at amortized cost, the loss reserves shall offset the book value of the financial assets listed in the balance sheet; For the creditor's rights investment measured at fair value and whose changes are included in other comprehensive income, the company recognizes its loss reserves in other comprehensive income and does not deduct the book value of the financial asset.
If the company no longer reasonably expects the contractual cash flow of financial assets to be recovered in whole or in part, the book balance of the financial assets shall be written down directly. This write down constitutes the derecognition of relevant financial assets. This usually occurs when the company determines that the debtor has no assets or source of income to generate sufficient cash flow to repay the amount to be written down. However, the financial assets written down may still be affected by the execution activities related to the company's collection of due amounts.
If the written down financial assets are recovered later, they shall be included in the profits and losses of the current period as the reversal of impairment losses. (II) the basis for determining the net realizable value of inventories and the withdrawal method of inventory falling price reserves
On the balance sheet date, inventories are measured at the lower of cost and net realizable value.
Net realizable value refers to the amount of the estimated selling price of inventory minus the estimated cost to be incurred at the time of completion, estimated selling expenses and relevant taxes in daily activities. 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 cost calculated according to a single inventory item is higher than its net realizable value, the inventory falling price reserve shall be withdrawn and included in the current profit and loss; However, for the inventory with large quantity and low unit price, the inventory falling price reserves shall be withdrawn according to the inventory category; If the inventories are related to the product series produced and sold in the same region, have the same or similar end use or purpose, and are difficult to be measured separately from other items, the inventory falling price reserves shall be accrued jointly.
(III) impairment of other assets except inventories and financial assets
On the balance sheet date, the company determines whether there are signs of impairment of the following assets according to internal and external information, including fixed assets, construction in progress, intangible assets, investment real estate measured by cost mode, long-term equity investment, long-term deferred expenses, etc.
The company conducts impairment test on assets with signs of impairment and estimates the recoverable amount of assets.
The recoverable amount refers to the higher one between the net amount of the fair value of the asset (or asset group, asset group combination, the same below) minus the disposal expenses and the present value of the expected future cash flow of the asset.
The asset group is composed of assets related to the creation of cash inflows. It is the smallest asset portfolio that can be recognized. The cash inflows generated by it are basically independent of other assets or asset groups.
The present value of the estimated future cash flow of an asset is determined by selecting an appropriate pre tax discount rate according to the estimated future cash flow generated during the continuous use and final disposal of the asset.
The estimation result of recoverable amount shows that if the recoverable amount of the asset is lower than its book value, the book value of the asset will be written down to the recoverable amount, and the written down amount will be recognized as asset impairment loss and included in the current profit and loss, and the corresponding asset impairment provision will be withdrawn at the same time. The impairment loss related to the asset group or combination of asset groups shall first offset the book value of goodwill allocated to the asset group or combination of asset groups, and then offset the book value of other assets in proportion according to the proportion of the book value of other assets except goodwill in the asset group or combination of asset groups, However, the book value of each asset after deduction shall not be lower than the highest of the net amount of the fair value of the asset minus the disposal expenses (if determinable), the present value of the expected future cash flow of the asset (if determinable) and zero.
Once the asset impairment loss is recognized, it will not be reversed in future accounting periods.
On the balance sheet date, the company fully evaluated the inventory, long-term equity investment, fixed assets, construction in progress, intangible assets and other assets, and found no signs of impairment, so no provision for asset impairment was made.
3、 The impact of the current provision for asset impairment on the company
The provision for impairment of various assets is 619436008 yuan, which will correspondingly reduce the total profit of the company in 2021 by 619436008 yuan, the net profit attributable to the shareholders of the listed company in 2021 by 551288381 yuan, the owner's equity by 551288381 yuan, and the net asset value at the end of the reporting period, which has no impact on the operating cash flow of the company in the reporting period.
4、 Explanation on the rationality of the provision for asset impairment this time
Based on the principle of prudence and in accordance with the accounting standards for business enterprises and relevant accounting policies of the company, the company has made provision for asset impairment of relevant assets within the scope of consolidated statements as of December 31, 2021, so as to more fairly reflect the company's finance, assets and operations as of December 31, 2021, so as to make the company's accounting information more reasonable.
The provision for asset impairment was audited by KPMG Huazhen certified public accountants.
It is hereby announced.
Shenzhen Institute Of Building Research Co.Ltd(300675)
Board of directors
March 24, 2022
