Securities code: Keeson Technology Corporation Limited(603610) securities abbreviation: Keeson Technology Corporation Limited(603610) Announcement No.: 2022007 Keeson Technology Corporation Limited(603610)
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 profit and loss, total assets and net assets of Keeson Technology Corporation Limited(603610) (hereinafter referred to as “the company”).
1、 Overview
On April 15, 2022, the company held the 23rd Meeting of the second board of directors, with 6 affirmative votes, 0 negative votes and 0 abstention votes; The 13th meeting of the second board of supervisors deliberated and adopted the proposal on accounting policy change with 3 affirmative votes, 0 negative votes and 0 abstention votes. The proposal still needs to be submitted to the 2021 annual general meeting of shareholders for deliberation.
2、 Specific situation and influence of the company
1. Reasons for changes in accounting policies
(1) On December 7, 2018, the Ministry of Finance issued the notice on revising and Issuing the accounting standards for Business Enterprises No. 21 – leasing (CK [2018] No. 35) (hereinafter referred to as the “new leasing standards”). The notice requires enterprises listed both at home and abroad and enterprises listed abroad and preparing financial statements using international financial reporting standards or accounting standards for business enterprises to be implemented as of January 1, 2019; Other enterprises that implement the accounting standards for business enterprises shall be implemented as of January 1, 2021.
(2) On January 26, 2021, the Ministry of Finance issued the notice on printing and distributing the interpretation of accounting standards for Business Enterprises No. 14 (CAI Kuai [2021] No. 1) (hereinafter referred to as “interpretation of Standards No. 14”), which stipulates the accounting treatment of social capital parties on government and social capital Cooperation (PPP) project contracts and the accounting treatment of changes in the basis for determining the cash flow of relevant contracts caused by the reform of benchmark interest rate.
(3) On December 30, 2021, the Ministry of Finance issued the notice on printing and distributing the interpretation of accounting standards for Business Enterprises No. 15 (CAI Kuai [2021] No. 35) (hereinafter referred to as “the interpretation of Standards No. 15”), which stipulates the accounting treatment of the external sales of products or by-products produced before the fixed assets reach the expected usable state or in the process of research and development, the relevant presentation of centralized fund management, and the judgment of loss contracts.
Due to the revision of the above accounting standards, the company needs to make corresponding changes to the original accounting standards.
2. Time of accounting policy change
(1) The company will implement the new leasing standards from January 1, 2021.
(2) The company will implement the standard Interpretation No. 14 from January 26, 2021.
(3) The company will implement the standard Interpretation No. 15 from December 31, 2021.
3. Accounting policies adopted before change
Before this change, the company implemented the accounting standards for business enterprises – basic standards, various specific standards, the application guide of accounting standards for business enterprises, the interpretation of accounting standards for business enterprises and other relevant regulations issued by the Ministry of finance.
4. Accounting policies adopted after change
After this change, the company will implement the new leasing standards, standard Interpretation No. 14 and standard Interpretation No. 15. In addition to the above changes in accounting policies, the remaining unchanged parts are still in accordance with the accounting standards for business enterprises – basic standards, various specific accounting standards, application guidelines of accounting standards for business enterprises, interpretation announcement of accounting standards for business enterprises and other relevant provisions issued by the Ministry of Finance in the early stage.
5. Impact of changes in accounting policies on the company
(1) Implement the new lease guidelines.
According to the revised standards, for contracts that exist before the first execution date, the company chooses not to reassess whether they are leases or include leases on the first execution date.
① The company as lessee:
The company chooses to adjust the amount of retained earnings and other relevant items in the financial statements at the beginning of the year when the new lease standards are first implemented according to the cumulative impact of the first implementation of the new lease standards, and does not adjust the information of comparable periods.
For the operating lease existing before the first execution date, the company measures the lease liability on the first execution date according to the remaining lease payment and the present value discounted at the incremental borrowing rate of the Japanese company in the first execution, and selects the following method to measure the right of use assets: the amount equal to the lease liability, and makes necessary adjustments according to the advance rent. For operating leases before the first execution date, while applying the above methods, the company selects one or more of the following simplified treatments according to each lease: 1) treat leases completed within 12 months after the first execution date as short-term leases; 2) When measuring lease liabilities, leases with similar characteristics adopt the same discount rate; 3) The measurement of right of use assets does not include initial direct expenses; 4) If there is an option to renew or terminate the lease, the lease term shall be determined according to the actual exercise of the option before the first execution date and other latest conditions; 5) As an alternative to the impairment test of right of use assets, assess whether the contract including lease is a loss contract before the first execution date according to the accounting standards for Business Enterprises No. 13 – contingencies, and adjust the right of use assets according to the amount of loss reserves recorded in the balance sheet before the first execution date; 6) No retroactive adjustment shall be made for lease changes occurring before the first execution date. According to the final arrangement of lease changes, accounting treatment shall be carried out in accordance with the new lease standards. In measurement
When leasing liabilities, the company uses the lessee’s incremental loan interest rate on January 1, 2021 to pay the lease amount
Discount. For the existing financial lease before the first execution date, the company shall measure the right of use assets and lease liabilities respectively according to the original book value of the financial lease in assets and the financial lease payable on the first execution date.
② As the lessor, the company reassesses the subleases classified as operating leases before the first execution date and still existing after the first execution date based on the remaining contract terms and terms of the original lease and sublease on the first execution date, and classifies them in accordance with the provisions of the new lease standards. If it is reclassified as a financial lease, the company will treat it as a new financial lease.
Except for sublease, the company does not need to adjust its lease as a lessor in accordance with the new lease standards. The company shall carry out accounting treatment in accordance with the new lease standards from the first implementation date.
The main impact of the implementation of the new leasing standards on the company’s financial statements on January 1, 2021 is as follows:
Project balance sheet
The adjustment of new leasing standards on December 31, 2020 will affect January 1, 2021
Prepayment 2147496840 -160941542131402686
Right to use assets 2170604660821706046608
Non current liabilities due within one year
Lease liabilities 1841315558118413155581
(2) Interpretation of the Standards No. 14 this change in accounting policy does not involve the impact on the presentation of the company’s financial statements.
(3) Interpretation of the Standards No. 15 this change in accounting policy does not involve the impact on the presentation of the company’s financial statements.
3、 Opinions of independent directors and board of supervisors
(I) opinions of the independent board of directors on the change of accounting policies
The independent directors of the company believe that the accounting policy change of the company is an adjustment made according to the policy change of the Ministry of finance, which can objectively and fairly reflect the financial status and operating results of the company, comply with the relevant regulations of the Ministry of finance, China Securities Regulatory Commission and Shanghai Stock exchange, and there is no situation that damages the interests of the company and all shareholders. We agree with the change of the company’s accounting policy.
(II) opinions of the board of supervisors on the change of accounting policies
The board of supervisors of the company believes that the 13th meeting of the second board of supervisors of the company deliberated and adopted the proposal on the company’s daily connected transactions in 2021 and the expected daily connected transactions in 2022.
4、 Documents for future reference
(I) Keeson Technology Corporation Limited(603610) independent directors’ independent opinions on matters related to the 23rd Meeting of the second board of directors;
(II) Keeson Technology Corporation Limited(603610) the resolution of the 23rd Meeting of the second board of directors;
(III) Keeson Technology Corporation Limited(603610) the resolution of the 23rd Meeting of the second board of supervisors.
It is hereby announced.
Keeson Technology Corporation Limited(603610) April 18, 2022
