Securities code: Tcl Technology Group Corporation(000100) securities abbreviation: TCL technology Announcement No.: 2022044 TCL Technology Group Co., Ltd
Announcement on changes in accounting policies
TCL Technology Group Co., Ltd. and all members of the board of directors guarantee that the contents of the announcement are true, accurate and complete, and there are no false records, misleading statements or major omissions.
TCL Technology Group Co., Ltd. (hereinafter referred to as “the company”) has made corresponding changes to the company’s accounting policies in accordance with the provisions of the Ministry of finance of the people’s Republic of China (hereinafter referred to as “the Ministry of finance”). The specific conditions are hereby announced as follows:
1、 Overview of changes in accounting policies
(I) reasons for changes in accounting policies
On December 31, 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 “Interpretation No. 15”), which defined 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 R & D, the presentation of centralized fund management and the judgment of loss contracts. The company will adjust the accounting policies accordingly according to the above requirements.
(II) time of accounting policy change
Since January 1, 2022, the company has implemented the provisions of Interpretation No. 15 on 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 R & D and the judgment of loss contracts; The provisions on the presentation of centralized fund management shall be implemented as of December 31, 2021.
(III) accounting policies adopted before and after the change
Before the change of accounting policies, the company implemented 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 regulations issued by the Ministry of finance.
After this accounting policy change, the company will implement the relevant provisions of Interpretation No. 15. 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.
(IV) main contents of accounting policy changes
1. Accounting treatment of trial operation sales
Where an enterprise sells the products or by-products produced before the fixed assets reach the expected serviceable state or during the research and development process, it shall, in accordance with the accounting standards for Business Enterprises No. 14 – revenue, accounting standards for Business Enterprises No. 1 – inventory and other provisions, separately account for the income and costs related to the trial operation sales and record them into the current profits and losses. Before the relevant products or by-products produced by the trial operation are sold, those that meet the provisions of the accounting standards for Business Enterprises No. 1 – inventory shall be recognized as inventory, and those that meet the relevant asset recognition conditions in other relevant accounting standards for business enterprises shall be recognized as relevant assets.
2. Report on centralized fund management
Clarify the bookkeeping subjects when the funds of the parent company and member companies are centrally and uniformly managed through the internal settlement center and financial company.
3. Judgment on loss contract
The cost dimension used to clearly judge the loss contract shall include the incremental cost of performing the contract and the apportionment amount of other costs directly related to the performance of the contract.
2、 Impact of changes in accounting policies on the company
This accounting policy change is made by the company in accordance with the relevant provisions and requirements of the Ministry of finance, in line with the provisions of relevant laws and regulations and the actual situation of the company. The adjustment will not have a significant impact on the company’s financial situation and will not damage the interests of the company and shareholders.
It is hereby announced.
Board of directors of TCL Technology Group Co., Ltd. April 27, 2022
