Hebei Huatong Wires And Cables Group Co.Ltd(605196)
Notes of the board of directors on changes in accounting policies
1、 Changes in accounting policies
(I) reasons for changes in accounting policies
1. According to the new leasing standards revised and issued by the Ministry of Finance in December 2018, enterprises that are required to be listed at the same time at home and abroad and enterprises that are listed abroad and adopt international financial reporting standards or accounting standards for business enterprises to prepare financial statements shall 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. According to the requirements of the new leasing standards, the company has made corresponding changes to the relevant accounting policies originally adopted.
2. On November 2, 2021, the accounting department of the Ministry of Finance issued a question and answer on the implementation of the accounting standards for business enterprises, which clearly stipulates that under normal circumstances, the transportation activities for the purpose of performing the customer's contract before the control of the enterprise's goods or services is transferred to the customer do not constitute a single performance obligation, and the relevant transportation costs should be regarded as the contract performance costs, Amortization is carried out on the same basis as the recognition of revenue from goods or services and included in the current profit and loss. The contract performance cost shall be listed in the "operating cost" item of the income statement.
(II) accounting policies adopted before this change
1. Before the change of accounting policy, the company listed the relevant rental expenses in the items of "operating costs", "selling expenses" and "administrative expenses" and listed the payable rental expenses in the item of "other payables" 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.
2. Before this accounting policy change, the company listed the relevant transportation costs in the "selling expenses" item. (III) accounting policies adopted after this change
1. The company will implement the new leasing standards revised and issued by the Ministry of Finance in 2018. Other unchanged parts shall still be implemented in accordance with the accounting standards for business enterprises - basic standards, various specific accounting standards, the application guide of accounting standards for business enterprises, the interpretation announcement of accounting standards for business enterprises and other relevant provisions issued by the Ministry of Finance in the early stage.
2. After this accounting policy change, the company listed the transportation costs incurred in performing the customer sales contract in the "operating cost" item in accordance with the relevant implementation Q & A regulations of the accounting department of the Ministry of finance.
2、 Specific situation and impact on the company
(I) impact of the implementation of the new leasing standards
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;
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. According to the new leasing standards, the company will pay attention to all leased assets (optional) from January 1, 2021
The right to use assets and lease liabilities are recognized for short-term leases and low-value asset leases (except for those with simplified treatment), depreciation and unrecognized financing expenses are recognized respectively, and the information of comparable periods is not adjusted.
The implementation of the new lease standards will affect the consolidated balance sheet and the balance sheet of the parent company on January 1, 2021
The impact of the project is summarized as follows:
Consolidated statement
Amount of statement items affected - increase / (decrease)
December 31, 2020 new lease criteria affect January 1, 2021
Right of use assets 0402288815402288815
Lease liabilities 0158576102158576102
Non current liabilities due within one year 975465741356479289933194502
Long term deferred expenses 183695933 -10806478575631148
No impact on the parent company's statements
The company implemented the new lease criteria for the first time on January 1, 2021. According to relevant regulations, the company will not re evaluate the contract options existing before the first execution date. The company adjusted the retained earnings at the beginning of 2021 and the amount of relevant items in the financial statements for the cumulative impact of the standards, and the comparative financial statements in 2020 were not restated.
(II) impact of the implementation of relevant implementation questions and answers of accounting standards for business enterprises
For the transportation costs incurred before the control of the goods is transferred to the customer and for the performance of the sales contract, the company will reclassify all the sales expenses to the operating costs. The main impacts on the company are as follows:
1. The transportation costs incurred for the performance of the sales contract are listed in the "operating cost" item, which is expected to have an impact on the company's "gross profit margin" and other financial indicators, and will not have a significant impact on the financial statements and other important financial indicators.
From January 1, 2021, the transportation costs incurred in performing the customer's sales contract will be reduced from
"Sales expense" is reclassified to "operating cost", and the specific amount affected is as follows:
Affected amount
Year 2021
Parent company of consolidated statement
102692,354.61 60,295629.33
2. The impact on relevant subjects of the company's financial statements in 2020 is as follows:
Increase / (decrease) in affected amount
Statement items affected by changes in accounting policies
Year 2020
Content and reason name
Parent company of consolidated statement
For the sales expenses of commodity control -14827336286 -3103180777
The operating cost of ownership transfer to customers is 148273362863103180777
Other and operating expenses paid before and for the performance of the sales contract
Cash related to transportation activities -13639566401 -2880056654
In this year, all the selling expenses are reclassified to operating costs.
The cash outflow related to this will be paid by itself to purchase goods and receive labor services
136395,664.01 28,80056654
The cash paid in connection with operating activities is reclassified to the cash paid for purchasing goods and receiving services
3、 Opinions of the board of directors
According to the requirements of relevant documents of the Ministry of finance, the company has made corresponding changes to the company's accounting policies, which are in line with the requirements of relevant laws and regulations and the actual situation of the company. The changed accounting policies are conducive to more objectively and fairly reflect the company's financial situation and operating results, and are in line with the interests of the company and all shareholders. The procedures of this accounting policy change comply with relevant laws and regulations and the articles of association, and the company agrees to this accounting policy change Hebei Huatong Wires And Cables Group Co.Ltd(605196) board of directors April 15, 2022
