Guangdong No.2 Hydropower Engineering Company Ltd(002060)
Announcement on changes in accounting estimates of the company
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.
Special tips:
This accounting estimate change of the company increased the net profit attributable to the shareholders of the listed company in 2021 by 141141 million yuan.
1、 Overview of changes in accounting estimates
(I) reasons for change
In order to more objectively and fairly reflect the expected losses of accounts receivable, other accounts receivable and contract assets and improve the quality of accounting information, according to the relevant provisions of accounting standards for Business Enterprises No. 22 – recognition and measurement of financial instruments and accounting standards for Business Enterprises No. 14 – income, combined with the company’s historical credit loss experience, production and operation status and the prediction of future operation, the company plans to The combination division and expected loss rate of other receivables and contract assets are changed.
(II) accounting estimates adopted before change
1. The company’s accounts receivable portfolio is divided into four portfolios, and the bad debt accrual proportion is set according to the aging. The specific details are shown in the following table:
In addition to the accounts receivable that are individually assessed for credit risk, they are divided into different combinations based on their credit risk characteristics:
The combination name determines the accrual method of the combination according to the aging accrual ratio
Claim example
2.50% within 1 year
10.00% in 1-2 years
15.00% of construction in progress of combination 1 for 2-3 years
18.00% for 3-4 years
4-5 years 20.00%
More than 5 years 30.00%
5.00% within 1 year
7.00% of completed projects in 1-2 years refer to the project settlement experience of historical credit loss portfolio 2, 10.00% in 2-3 years, combined with the situation before 20.00% in 3-4 years and the expected 50.00% period of more than 5 years for the economic situation of 40.00% in 4-5 years, Prepare the comparison table between the aging of accounts receivable of 1.00% in one year and the expected credit loss rate of 5.00% renewal in the whole deposit of 1-2 years and 7.00% loss rate in 2-3 years. Calculate 10.00% of electricity sales in combination 3 for 3-4 years and 15.00% of expected credit loss in 4-5 years.
More than 5 years 20.00%
1.00% within 1 year
Sales of other products 1-2 years 5.00%
Combination 4 (including 2-3 years of survey and Design) 10.00%
15.00% in 3-4 years
4-5 years 30.00%
More than 5 years 50.00%
2. Other accounts receivable portfolio is divided into four portfolios, and different bad debt accrual ratios are set according to the aging. The specific details are shown in the following table:
In addition to other receivables that individually assess credit risk, they are divided into different combinations based on their credit risk characteristics: the combination name determines the basis of the combination
Aging accrual proportion and accrual method
1.00% within 1 year
1-2 years 5.00%
2-3 years 15.00%
Bid security combination 1
20.00% in 3-4 years, with reference to the experience of 30.00% loss of historical credit in 4-5 years, combined with the current situation of 50.00% in more than 5 years and 1.50% expectation of 5.00% in 1-2 years of future economic conditions within 1 year, Through 25.00% of default risk exposure in 2-3 years, reserve fund in combination 2 and 30.00% in 3-4 years in the next 12 months
Within 40.00% in 4-5 years or 60.00% in the whole duration of more than 5 years, the expected credit loss rate is 1.50% within 1 year, and the expected credit loss of 5.00% in 1-2 years is calculated.
Combination 3 other current accounts 2-3 years 10.00%
30.00% in 3-4 years
45.00% in 4-5 years
More than 5 years 60.00%
5.00% within 1 year
1-2 years 5.00%
2-3 years 5.00%
Combination 4 performance security
3-4 years 5.00%
4-5 years 5.00%
More than 5 years 5.00%
3. The contract assets are divided into two combinations, and the details are shown in the table below:
Combination name: basis for determining combination and accrual method
The quality guarantee deposit of combination 1 is withdrawn by 5% of the balance
1.5% of the balance has been withdrawn from the combination 2 construction contract
Completed unsettled assets
(III) accounting estimates adopted after change
1. The company’s accounts receivable portfolio is divided into three portfolios, and the bad debt accrual proportion is set according to the aging. The specific details are shown in the following table:
In addition to the accounts receivable that are individually assessed for credit risk, they are divided into different combinations based on their credit risk characteristics:
The name of the combination determines the accrual method of the combination according to the aging accrual proportion
Within one year, 2.50% is accrued according to the account age and the expected duration of 7.00% in the whole 1-2 years. The settlement of 1 project is 15.00% in 2-3 years, and the loss rate is compared with the table of 20.00% in 3-4 years
40.00% in 4-5 years
More than 50.00 years
1.00% within 1 year
1-2 years 5.00%
7.00% of electricity sales in combination 2 for 2-3 years
10.00% in 3-4 years
4-5 years 15.00%
More than 5 years 20.00%
1.00% within 1 year
Sales of other products 1-2 years 5.00%
Combination 3 (including 2-3 years of survey and Design) 10.00%
15.00% in 3-4 years
4-5 years 30.00%
More than 5 years 50.00%
2. Other accounts receivable portfolio is divided into two portfolios, and different bad debt accrual ratios are set according to the aging. The details are shown in the following table:
In addition to other receivables that individually assess credit risk, they are divided into different combinations based on their credit risk characteristics:
The name of the combination determines the accrual method of the combination according to the aging accrual proportion
5.00% within 1 year
1-2 years 5.00%
Portfolio 1 margin (excluding 5.00% for 2-3 years and 5.00% for the balance), and 5.00% for 3-4 years
4-5 years 5.00%
More than 5 years 5.00%
1.50% in one year is compared with the expected duration of other 1-2 years 5.00% in the whole portfolio 2 and 10.00% in 2-3 years according to the aging
Provision of 30.00% table in 3-4 years
45.00% in 4-5 years
More than 5 years 60.00%
3. The contract assets are divided into four combinations, and the specific details are shown in the table below:
Combination name: basis for determining combination and accrual method
The quality guarantee deposit of combination 1 is withdrawn by 5% of the balance
1.5% of the balance shall be withdrawn for the completed formed by the combination 2 construction contract
Unsettled assets
The financial assets in the construction period of portfolio 3 are withdrawn by 1% of the balance
PPP project in production mode
Sales of other products in combination 4 are withdrawn at 1% of the balance
(IV) date of change
The change of accounting estimates will be implemented from October 1, 2021.
2、 Impact of this accounting estimate change on the company
According to the relevant provisions of accounting standards for Business Enterprises No. 28 – changes in accounting policies, accounting estimates and error correction, the future applicable method is adopted for the change of accounting estimates, and there is no need to make retrospective adjustment to the disclosed financial statements, so it will not have an impact on the disclosed financial statements of the company.
1. Impact on audited net profit and shareholders’ equity of the latest fiscal year
Changes in the company’s accounting estimates for the current fiscal year have no impact on the most recent fiscal year.
2. Impact on the current period
This accounting estimate change of the company increased the net profit attributable to the shareholders of the listed company in 2021 by 141141 million yuan.
3、 Opinions of the board of directors
On March 29, 2022, the 24th Meeting of the 7th board of directors held by the company deliberated and adopted the proposal on the change of accounting estimates of the company with 9 affirmative votes, 0 negative votes and 0 abstention, and agreed to the change of accounting estimates.
The asset portfolio division and expected loss rate after the change of accounting estimates comply with the relevant provisions of the accounting standards for business enterprises, the nature of the company’s business, industry characteristics, historical credit losses and other actual conditions, and there is no damage to the interests of the company and shareholders.
5、 Opinions of independent directors
The independent directors believe that the change of the company’s accounting estimate complies with relevant regulations, and the changed accounting estimate can more reasonably reflect the expected loss of accounts receivable, other accounts receivable and contract assets, without damaging the interests of the company and shareholders. The decision-making procedures of the board of directors on this matter comply with
