Securities code: Sichuan Road & Bridge Co.Ltd(600039) securities abbreviation: Sichuan Road & Bridge Co.Ltd(600039) Announcement No.: 2022054
Sichuan Road & Bridge Co.Ltd(600039)
Announcement on changes in accounting policies
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
Important content tips:
The change of accounting policy has no significant impact on the company’s financial status, operating results, cash flow and future operating performance.
1、 Overview
Since 2021, the Ministry of Finance and the accounting department of the Ministry of finance have successively issued the interpretation of accounting standards for business enterprises, Q & A on the implementation of accounting treatment and application cases (collectively referred to as “these accounting provisions”), mainly including:
1. On February 2, 2021, the Ministry of Finance issued the interpretation of accounting standards for Business Enterprises No. 14, which began to be implemented on that day.
2. On August 10, 2021, the accounting department of the Ministry of Finance issued the implementation questions and answers (11) and application cases (3) of the accounting treatment of the social capital Party of the PPP project contract, which began to be implemented on the same day.
According to the above provisions, the company needs to revise the accounting policies related to these accounting provisions.
The company has deliberated and adopted the proposal on Revising accounting policies at the 56th meeting of the 7th board of directors and the 46th meeting of the 7th board of supervisors held on March 29, 2022.
Voting of the board of directors: 11 votes in favor, 0 against and 0 abstention.
2、 Main contents of this accounting policy change and its impact on the company
(I) main contents of accounting policy changes
1. If the social capital party provides construction services (including construction, reconstruction and expansion, the same below) or contracts to other parties, it shall determine whether its identity is the main responsible person or agent in accordance with the accounting standards for Business Enterprises No. 14 – income, conduct accounting treatment and confirm the contract assets.
2. If the social capital party provides multiple services (such as both asset construction services and operation and maintenance services after the completion of the PPP project) according to the PPP project contract, it shall identify the single performance obligation in the contract in accordance with the accounting standards for Business Enterprises No. 14 – income, and apportion the transaction price to each performance obligation according to the relative proportion of the separate selling price of each performance obligation.
3. The social capital party shall pay the borrowing costs incurred in the construction of PPP project assets in accordance with the
Securities code: Sichuan Road & Bridge Co.Ltd(600039) securities abbreviation: Sichuan Road & Bridge Co.Ltd(600039) Announcement No.: 2022054
Accounting treatment shall be carried out in accordance with the provisions of accounting standards for the industry No. 17 – borrowing costs. For the part recognized as intangible assets in items 4 and 5 of this part, the social capital party shall capitalize the relevant borrowing costs when they meet the capitalization conditions, and carry forward them to intangible assets when the PPP project assets reach the expected usable state. Except for the above circumstances, other borrowing costs shall be expensed by the social capital party.
4. According to the PPP project contract, the social capital party has the right to collect fees from the objects who obtain public goods and services during the operation of the project, but if the amount of fees is uncertain, this right does not constitute an unconditional right to receive cash. When the PPP project assets reach the expected usable state, the consideration amount of relevant PPP project assets or the recognized construction income amount shall be recognized as intangible assets, Accounting treatment shall be conducted in accordance with the accounting standards for Business Enterprises No. 6 – intangible assets.
5. According to the PPP project contract, if the social capital party meets the conditions for the right to receive cash (or other financial assets) of a determinable amount during the operation of the project, it shall recognize the accounts receivable when the social capital party has the right to receive the consideration (the right only depends on the factors of time lapse), and conduct accounting treatment in accordance with the accounting standards for Business Enterprises No. 22 – recognition and measurement of financial instruments. The social capital party shall recognize the difference between the consideration amount of relevant PPP project assets or the recognized construction income amount and the cash (or other financial assets) entitled to receive a determinable amount as intangible assets when the PPP project assets reach the expected usable state.
6. In order to keep the PPP project assets in a certain service capacity or in a certain use state before being handed over to the government, if the services provided by the social capital party according to the PPP project contract do not constitute a single performance obligation, the expected expenses shall be accounted for in accordance with the accounting standards for Enterprises No. 13 – contingencies.
7. These accounting regulations require that the consideration amount of relevant PPP project assets or the amount of construction income recognized shall be recognized as the part of intangible assets, and the construction expenditure incurred during the relevant construction period shall be listed as the cash flow of investment activities. In addition to the above circumstances, the construction expenditure incurred during the construction of PPP project is listed as the cash flow of operating activities.
8. If the relevant PPP project contracts that have been implemented before December 31, 2020 and have not been completed by the implementation date of this interpretation are not subject to accounting treatment in accordance with the above provisions, retroactive adjustment shall be made; If retroactive adjustment is not feasible, this interpretation shall be applied from the beginning of the earliest period of retroactive adjustment. The social capital party shall adjust the amount of retained earnings and other relevant items in the financial statements at the beginning of the year on the date of implementation of this interpretation, and shall not adjust the information of comparable periods. Franchise project agreements that meet the “dual characteristics” and “dual control” of this interpretation but are not included in the project database of the national PPP comprehensive information platform shall be implemented in accordance with this interpretation
Securities code: Sichuan Road & Bridge Co.Ltd(600039) securities abbreviation: Sichuan Road & Bridge Co.Ltd(600039) Announcement No.: 2022054
Line accounting treatment and retroactive adjustment.
(II) impact of this accounting policy change on the company
According to the Accounting Standards No. 14 of PPP – construction project and the actual income of the company’s main responsible person, the income of the project shall be recognized according to the Accounting Standards No. 14 of PPP – construction project; Adjust the statement presentation of PPP project assets: transfer the part recognized as financial assets from construction in progress, long-term receivables and non current assets due within one year to contract assets and other non current assets, and recognize the contract assets that have the right to receive the consideration as accounts receivable; The part recognized as intangible assets is transferred from construction in progress to intangible assets. The company’s consolidated and financial statements present the construction expenses of PPP project other than the construction expenses of intangible assets as the cash flow of operating activities.
At the same time, according to the requirements of the connection between the old and new standards, the enterprise shall adjust the amount of retained earnings and other relevant items in the financial statements at the beginning of 2021, and shall not adjust the information of previous periods. The final impact of the above on the company’s statement items shall be subject to the financial report audited and confirmed by the accounting firm.
The change of accounting policy has no significant impact on the company’s financial status, operating results, cash flow and future operating performance.
3、 Concluding comments of independent directors and board of supervisors
(I) opinions of independent directors
Agree with the proposal on Revising accounting policies. The accounting policy change of the company complies with the relevant provisions of the Ministry of finance, China Securities Regulatory Commission and Shanghai Stock Exchange. It is reasonable and necessary, and there is no damage to the interests of the company and all shareholders. The approval procedures of the board of directors for this accounting policy comply with the provisions of relevant laws and regulations, and agree to the proposal of this change.
(II) opinions of the board of supervisors
The change of the company’s accounting policy is a reasonable adjustment based on the regulations issued by the Ministry of finance. Starting from the actual operation of the company, it can more objectively and fairly reflect the company’s financial situation and operating results. The relevant decision-making procedures of this accounting policy change comply with the provisions of relevant laws and regulations, and there is no damage to the interests of the company and shareholders. The board of supervisors agreed to this change.
It is hereby announced.
Sichuan Road & Bridge Co.Ltd(600039) board of directors March 29, 2022
