Stock abbreviation: Datang Huayin Electric Power Co.Ltd(600744) Stock Code: Datang Huayin Electric Power Co.Ltd(600744) No.: pro 2022019 Datang Huayin Electric Power Co.Ltd(600744)
Announcement on changes in accounting policies and accounting estimates
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 the contents of the announcement.
Important content tips:
According to the requirements of the accounting standards for Business Enterprises No. 21 - leasing (CK [2018] No. 35, hereinafter referred to as the new leasing standards) revised and issued by the Ministry of Finance on December 7, 2018, the company will implement the new leasing standards and change the accounting policies accordingly from January 1, 2021. This accounting policy change will not have a significant impact on the company's financial position, operating results and cash flow.
The initial investment cost of the company to China Datang Group Finance Co., Ltd. (hereinafter referred to as "finance company") is 75 million yuan, with equity accounting for 1.99%. At the beginning of the implementation of the new financial instrument standards, the company established the valuation model of the average price to book ratio of the banking industry based on the net stock ratio of some banks selected in the stock market. At present, the valuation model is no longer applicable. According to the relevant provisions of the accounting standards for Business Enterprises No. 39 - fair value measurement, the company will change the fair value valuation model of equity investment of China Datang Group Finance Co., Ltd. from December 1, 2021, and adopt the future applicable method without retroactive adjustment. The income from changes affecting the fair value of the company increased by 890197 million yuan and the net profit of the company increased by 890197 million yuan.
1、 Changes in accounting policies
(I) reasons for changes in accounting policies
The Ministry of Finance revised and issued the accounting standards for Business Enterprises No. 21 - leasing (CK [2018] No. 35, hereinafter referred to as the new leasing standards) on December 7, 2018. According to the new leasing standards, the new leasing standards shall be implemented as of January 1, 2019 for enterprises listed at home and abroad and enterprises listed abroad and preparing financial reports using international financial reporting standards or accounting standards for business enterprises, and as of January 1, 2021 for other enterprises implementing accounting standards for business enterprises. According to the revision of the above accounting standards, the company will implement the new leasing standards and change the accounting policies accordingly from January 1, 2021.
(II) contents of accounting policy changes
According to the new leasing standards revised by the Ministry of Finance in 2018, the main changes in the company's accounting policies are as follows:
1. Under the new lease standards, except for short-term leases and low value asset leases, the lessee will no longer distinguish between financial leases and operating leases. All leases will adopt the same accounting treatment, and the right to use assets and lease liabilities must be recognized;
2. For the right to use assets, if the lessee can reasonably determine that it obtains the ownership of the leased assets at the expiration of the lease term, depreciation shall be accrued within the remaining service life of the leased assets. If it is impossible to reasonably determine that the ownership of the leased asset can be obtained at the expiration of the lease term, depreciation shall be accrued within the shorter of the lease term and the remaining service life of the leased asset. At the same time, the lessee shall determine whether the right of use assets are impaired and account for the identified impairment losses;
3. For lease liabilities, the lessee shall calculate the interest expenses of the lease liabilities in each period of the lease term and record them into the current profits and losses; If it should be included in the cost of relevant assets according to the accounting standards for Business Enterprises No. 17 - borrowing costs and other standards, its provisions shall prevail.
4. For short-term leases and low value asset leases, the lessee may choose not to recognize the right of use assets and lease liabilities, and record them into the relevant asset costs or current profits and losses according to the straight-line method or other systematic and reasonable methods during each period of the lease term; 5, in accordance with the requirements of the new leasing standards and listing rules, the relevant contents of the leasing business shall be adjusted in the disclosed financial statements. According to the new leasing standards, the company will recognize the right of use assets and lease liabilities for all leased assets according to the present value of the minimum lease payment of future rent payable (except for short-term leases and low-value asset leases with simplified treatment), and recognize depreciation and unrecognized financing expenses respectively from January 1, 2021, without adjusting the information of comparable periods.
This accounting policy change will not have a significant impact on the company's financial position, operating results and cash flow.
(III) impact of changes in accounting policies
Since January 1, 2021, the company has adopted the relevant provisions of accounting standards for Business Enterprises No. 21 - leasing (CK [2018] No. 35). The company recognizes the right to use assets and lease liabilities for all leases (except short-term leases and low value asset leases), and recognizes the depreciation and interest expenses respectively. Affected by this matter, the right to use assets in the consolidated financial statements increased by 1928424900 yuan on January 1, 2021, Fixed assets decreased by 18256107 million yuan, long-term deferred expenses decreased by 23.62 million yuan, prepayments increased by 609500 yuan, lease liabilities increased by 13158619 million yuan, other non current liabilities due within one year increased by 100578 million yuan, and long-term payables decreased by 12461159 million yuan.
2、 Changes in accounting estimates
The initial investment cost of the company to Datang Group Finance Co., Ltd. is 75 million yuan, with equity accounting for 1.99%; At the beginning of the implementation of the new financial instrument standards, the company recognized this investment as "financial assets measured at fair value and whose changes are included in the current profit and loss", listed the financial statements in "other non current financial assets", and established the valuation model of the average price to book ratio of the banking industry based on the net rate of some bank stock markets selected in the stock market, which is used to calculate the market fair value of the investment in financial companies. At present, the valuation model is no longer applicable.
(I) reasons for changing the valuation method
1. Impact of original valuation method
According to the original valuation model of the average price to book ratio of the banking industry, due to the continuous downturn of banking stocks, the fair value of the investment in the financial company in 2020 decreased by 5.5684 million yuan compared with the previous year, and the fair value of the investment in the financial company in 2021 decreased by 9.3254 million yuan compared with 2020.
2. Financial performance of the company in recent two years
Datang Group Finance Co., Ltd. achieved a net profit of 798 million yuan in 2019; Datang Group Finance Co., Ltd. achieved a net profit of 866 million yuan in 2020; Datang Group Finance Co., Ltd. quickly reported a net profit of 862 million yuan in 2021. The fair value of the investment in the financial company calculated by the original valuation model shows a decreasing trend year by year, which is completely contrary to the stable and good performance trend of the financial company in recent years. Therefore, the original valuation model is no longer applicable.
(II) contents of changing the valuation method
According to the available net assets of China Datang Group Finance Co., Ltd. as of December 31, 2021 of 8980566 million yuan, the corresponding share of net assets of 1.99% of the shares held by the company is 1787133 million yuan.
According to the appraisal report issued by Beijing Tianjian Xingye Assets Appraisal Co., Ltd. (Report No.: Tianxing pingbao Zi [2022] No. 0342), the appraisers collected the transaction case data of the financial company in recent three years, analyzed the transaction object and transaction background of the transaction case, and finally selected Shanghai Pudong Development Finance, Wuliangye Yibin Co.Ltd(000858) finance The equity transaction cases of the four companies of Hong Kong China Travel finance and state machinery finance are taken as comparable cases. The fair value of the equity investment of the financial company held by the company is evaluated by the transaction case comparison method. After evaluation, the evaluation value of the 1.99% equity of the financial company held by the company is 179496200 yuan.
The assessed fair value is higher than the book value calculated according to the share ratio. According to the principle of prudence, the company plans to change the valuation method of the fair value of the investment in the financial company from December 1, 2021 to calculate the closing fair value of the investment by multiplying the closing book net assets of the financial company by the share ratio of the financial company held by the company.
(III) impact of change in valuation method
As of December 31, 2020, the carrying amount of the fair value of the company's investment in the financial company was 99.019 million yuan;
According to the net assets of the financial company at the end of the period and the shareholding ratio of the company, the fair value of the company's investment in the financial company as of December 31, 2021 was 1787133 million yuan.
Compared with the original valuation method of the company, the above adjustments affected the income from changes in fair value of the company, increased by 890197 million yuan and increased the net profit of the company by 890197 million yuan. According to the relevant provisions of the accounting standards for Business Enterprises No. 39 - fair value measurement, "If an enterprise changes the valuation technology and its application method, it shall be treated as an accounting estimate change in accordance with the provisions of the accounting standards for Business Enterprises No. 28 - changes in accounting policies, accounting estimates and error correction, and disclose the changes in the valuation technology and its application method in accordance with the disclosure requirements of the accounting standards for Business Enterprises No. 39 - fair value measurement, without the need to The accounting standards for Business Enterprises No. 28 - changes in accounting policies, accounting estimates and error correction shall disclose the changes in relevant accounting estimates. " The company changed the fair value valuation model of equity investment of China Datang Group Finance Co., Ltd. from December 1, 2021, and adopted the future applicable method without retroactive adjustment.
3、 Decision making procedures for the implementation of changes in accounting estimates
At the 3rd meeting of the board of directors in 2022, the proposal on the change of the company's accounting policies and accounting estimates was considered and adopted by 11 votes for, 0 against and 0 abstention. The independent directors of the company expressed independent opinions and agreed to the change of accounting estimates of the company.
4、 Concluding opinions of independent directors, the board of supervisors and accounting firms (I) opinions of independent directors
The accounting policy change of the company is a reasonable change made by the company according to the regulations and requirements of the Ministry of finance. The changed accounting policy complies with relevant regulations and the actual situation of the company; This accounting estimate change can more appropriately reflect the fair value of the assets held by the company and provide more reliable and relevant accounting information. The changes of the company's accounting policies and accounting estimates do not harm the interests of the company and shareholders, especially the interests of minority shareholders. The decision-making procedures comply with the relevant provisions of relevant laws and regulations. We agree to the changes in accounting policies and accounting estimates.
(II) opinions of the board of supervisors
The change of the company's accounting policies complies with the relevant provisions of the Ministry of finance, China Securities Regulatory Commission and Shanghai Stock Exchange, and the relevant decision-making procedures comply with the relevant laws and regulations and the articles of association, without damaging the interests of the company and shareholders; This accounting estimate change is the change of fair value valuation model. The original fair value valuation model can not accurately reflect the value of the company's equity participation. After adjusting the fair value valuation model according to the evaluation report issued by the evaluation firm, it can more objectively and fairly reflect the fair value of the assets held by the company. This accounting estimate change does not damage the interests of the company and minority shareholders. The decision-making procedures for the above changes in accounting policies and accounting estimates comply with the provisions of relevant laws and regulations and the articles of association. The board of supervisors of the company agrees with the changes in accounting estimates.
(III) opinions of accounting firm
We believe that the special instructions prepared by Datang Huayin Electric Power Co.Ltd(600744) management comply with the relevant provisions of accounting standards for Business Enterprises No. 28 - changes in accounting policies, accounting estimates and accounting errors and No. 93 correction of accounting errors, changes in accounting policies or accounting estimates in the memorandum of work for daily information disclosure of listed companies on Shanghai Stock Exchange - Guidelines for the format of No. 1 interim announcement in all major aspects, It truthfully reflects the changes in Datang Huayin Electric Power Co.Ltd(600744) accounting estimates.
It is hereby announced.
Datang Huayin Electric Power Co.Ltd(600744) board of directors April 14, 2022
