Bringspring Science And Technology Co.Ltd(300290)
Withdrawal method and write off system of asset impairment reserves
Chapter I General Provisions
Article 1 in order to further standardize the management of withdrawal and write off of asset impairment reserves of Bringspring Science And Technology Co.Ltd(300290) (hereinafter referred to as ” Bringspring Science And Technology Co.Ltd(300290) ” or “the company”), ensure that the financial statements truly and accurately reflect the company’s financial situation and operating results, effectively prevent and resolve the risk of asset loss and improve the quality of assets This system is formulated in accordance with the provisions of relevant laws and regulations such as the guidelines for self discipline supervision of listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of companies listed on GEM and in combination with the actual situation.
Article 2 the assets referred to in this system include financial assets, inventories and long-term assets.
(I) financial assets include financial assets classified as measured at amortized cost and financial assets classified as measured at fair value with changes included in other comprehensive income. It mainly includes: notes receivable, accounts receivable, other accounts receivable, accounts receivable financing and long-term accounts receivable, investment in other equity instruments, etc. Financial assets classified as financial assets measured at fair value with changes included in current profits and losses are not within the scope of this system;
(II) inventories include finished products or commodities held for sale in daily activities, products in progress in the production process, materials and materials consumed in the production process or the provision of labor services, etc. Specifically divided into raw materials, production costs, inventory goods, revolving materials, etc;
(III) long term assets include long-term equity investment, fixed assets, construction in progress, intangible assets, goodwill and other long-term assets.
Article 3 responsibilities of all functional departments
(I) sales and collection related departments: responsible for checking the customer’s accounts receivable, contract assets, project production costs, etc. if there is any indication of impairment, they shall timely analyze the causes of impairment, form written materials and initiate the application for asset impairment; If there is definite evidence of factual loss, an application for write off shall be initiated in time.
(II) relevant departments of production and storage: be responsible for checking the inventories of raw materials, goods in stock, revolving materials, etc. item by item. If there is any indication that impairment has occurred, timely analyze the reasons for impairment, form written materials and initiate asset impairment application; If there is definite evidence of factual loss, an application for write off shall be initiated in time.
(III) Asset Management Department of the company: be responsible for organizing and implementing the inventory of fixed assets, intangible assets and other assets, timely analyzing the reasons for the assets that show signs of impairment or need to be scrapped, forming written materials and initiating the application for asset impairment; If there is definite evidence of factual loss, an application for write off shall be initiated in time.
(IV) investment management department: it is responsible for checking the investment projects item by item. If the investment project is impaired due to the continuous decline of market price or the deterioration of the operating condition of the invested unit, it shall timely analyze the reasons, form written materials and launch the application for asset impairment.
(V) finance department: responsible for reviewing the materials submitted by the business department and putting forward review opinions; According to the accounting standards for business enterprises, tax laws and regulations and other relevant requirements, accurately carry out accounting treatment and other work.
(VI) securities affairs department of the group: responsible for organizing the general meeting of shareholders, the approval of the board of directors and information disclosure of the provision for asset impairment.
Article 4 this system is applicable to the management of the calculation and write off of asset impairment reserves of the company, its wholly-owned subsidiaries and holding subsidiaries.
Chapter II provision for impairment of financial assets
Article 5 scope of provision for impairment of financial assets
Financial assets measured at amortized cost and financial assets measured at fair value with changes included in other comprehensive income. It mainly includes: notes receivable, accounts receivable, other accounts receivable, accounts receivable financing and long-term accounts receivable, investment in other equity instruments, etc.
Article 6 the provision for impairment of financial assets shall be recognized according to the following methods:
According to the provisions of accounting standards for Business Enterprises No. 22 – recognition and measurement of financial instruments, the company conducts impairment accounting treatment and recognizes loss reserves for financial assets measured at amortized cost, creditor’s rights investment, lease receivables and contract assets measured at fair value and whose changes are included in other comprehensive income on the basis of expected credit losses. The amount of the increase or reversal of the resulting loss reserves shall be included in the current profits and losses as impairment losses or gains. Article 7 measurement of expected credit loss
Expected credit loss refers to the weighted average value of credit loss of financial instruments weighted by the risk of default. Credit loss refers to the difference between all contract cash flows receivable under the contract and all cash flows expected to be received by the company discounted at the original effective interest rate, that is, the present value of all cash shortages. Among them, the financial assets purchased or originated by the company with credit impairment shall be discounted according to the actual interest rate adjusted by the credit of the financial assets.
Article 8 provision for impairment of receivables / contract assets
(I) individual impairment provision
For the notes receivable, accounts receivable, other receivables, accounts receivable financing, contract assets and long-term receivables that have objective evidence of impairment and are suitable for single evaluation, the impairment test shall be conducted separately, the expected credit loss shall be recognized, and the single impairment provision shall be withdrawn. Objective evidence includes: receivables in dispute with the other party or involving litigation and arbitration; Receivables that have obvious signs that the debtor is likely to be unable to perform its repayment obligations.
(II) impairment provision based on Portfolio
For notes receivable, accounts receivable, other receivables, accounts receivable financing, contract assets and long-term receivables without objective evidence of impairment, or when a single financial asset cannot evaluate the information of expected credit loss at a reasonable cost, the company divides notes receivable, accounts receivable, other receivables, accounts receivable financing, contract assets and long-term receivables into several combinations according to the characteristics of credit risk, The expected credit loss is calculated on the basis of portfolio and the provision for impairment is made. The basis for determining the combination is as follows:
1. Notes receivable
Basis for determining project portfolio
Combination 1: commercial acceptance bill combines the credit of acceptor, endorser, drawer and other debtors
Risk, the portfolio takes aging as the credit risk feature
Combination 2: bank acceptance bill combines the credit of acceptor, endorser, drawer and other debtors
Risk, the portfolio does not withdraw bad debt reserves
2. Accounts receivable
Basis for determining project portfolio
Portfolio 1: accounts receivable from customers this portfolio takes the aging of accounts receivable as the credit risk feature
Combination 2: low risk combination, receivables from related parties within the consolidation scope, etc. are sure to be fully recoverable
Bad debt reserves are not withdrawn for the fund portfolio
3. Other receivables
Basis for determining project portfolio
Combination 1: interest receivable this combination is the interest receivable from financial institutions and bank wealth management income
Combination 2: dividends receivable this combination is dividends receivable
Portfolio 3: other receivables this portfolio takes the aging of receivables as the credit risk feature
Portfolio 4: low risk portfolio, receivables from related parties within the consolidation scope, etc. are sure to be fully recoverable
Bad debt reserves are not withdrawn for the fund portfolio
4. Long term receivables
Basis for determining project portfolio
Combination 1: installment sales of receivables this combination takes the aging of long-term receivables as the characteristic of credit risk
Article 9 provision for impairment of debt investment and other debt investment
The provision for impairment of the company’s investment or other creditor’s rights shall be calculated according to the nature of the investment’s exposure and the expected default risk of the company in the whole 12-month period.
Article 10 information to be considered in judging whether the credit risk has increased significantly
In order to judge whether the credit risk of financial assets has increased significantly since initial recognition, the company considers reasonable and reliable information that can be obtained without unnecessary additional costs or efforts, including forward-looking information: (I) whether the internal price indicators caused by changes in credit risk have changed significantly;
(II) adverse changes in business, financial or economic conditions expected to lead to significant changes in the debtor’s ability to perform its debt repayment obligations;
(III) whether the actual or expected operating results of the debtor have changed significantly; Whether the regulatory, economic or technological environment in which the debtor is located has changed significantly;
(IV) whether the value of collateral as debt collateral or the quality of guarantee or credit enhancement provided by a third party has changed significantly. These changes are expected to reduce the debtor’s economic motivation to repay within the period specified in the contract or affect the probability of default;
(V) whether the economic motivation expected to reduce the debtor’s repayment according to the time limit agreed in the contract has changed significantly; (VI) expected changes to the loan contract, including whether the expected breach of contract may lead to the exemption or amendment of contractual obligations, the granting of interest free period, the jump of interest rate, the request for additional collateral or guarantee, or other changes to the contractual framework of financial instruments;
(VII) whether the debtor’s expected performance and repayment behavior have changed significantly;
(VIII) whether the contract payment is overdue for more than (including) 30 days.
Article 11 the company assesses whether the financial assets have been impaired on the balance sheet date.
When one or more events that have an adverse impact on the expected future cash flow of a financial asset occur, the financial asset becomes a financial asset with credit impairment. The evidence of credit impairment of financial assets includes the following observable information:
Significant financial difficulties of the issuer or debtor; The debtor violates the contract, such as default or overdue payment of interest or principal; The creditor gives concessions that the debtor will not make under any other circumstances due to economic or contractual considerations related to the debtor’s financial difficulties; The debtor is likely to go bankrupt or undergo other financial reorganization; The financial difficulties of the issuer or debtor lead to the disappearance of the active market of the financial assets; Purchase or source a financial asset at a substantial discount, which reflects the fact that a credit loss has occurred.
Article 12 in order to reflect the changes of credit risk of financial assets since initial recognition, the company remeasures the expected credit loss on each balance sheet date, and the increase or reversal amount of loss reserves shall be included in the current profit and loss as impairment loss or gain.
For financial assets measured at amortized cost, the loss reserves shall be offset against the book value of the financial assets listed in the balance sheet.
For the creditor’s rights investment measured at fair value and whose changes are included in other comprehensive income, the company recognizes its loss reserves in other comprehensive income and does not deduct the book value of the financial asset.
Article 13 write off of financial assets
If the company no longer reasonably expects the contractual cash flow of financial assets to be recovered in whole or in part, the book balance of the financial assets shall be written down directly. This write down constitutes the derecognition of relevant financial assets. This usually occurs when the company determines that the debtor has no assets or source of income to generate sufficient cash flow to repay the amount to be written down. The verification evidence of financial assets that the company should obtain includes: 1. The bankruptcy announcement of the court and the liquidation documents of bankruptcy liquidation; 2. The court’s judgment or ruling against a lawsuit, or the legal document that wins the lawsuit but is terminated (suspended) by the court’s ruling; 3. The certificate of cancellation or revocation issued by the industrial and commercial department; 4. Administrative decision documents of government departments on cancellation and order for closure; 5. Death and disappearance certificates issued by public security and other relevant departments; 6. Conclusive evidence of being overdue for more than three years and being unable to pay off debts; 7. The debt restructuring agreement with the debtor and its relevant certificates; 8. Other relevant certificates, etc.
If the written down financial assets are recovered later, they shall be included in the profits and losses of the current period as the reversal of impairment losses. Chapter III inventory falling price reserves
Article 14 scope of provision for inventory falling price reserves
Raw materials, development costs, goods in stock, revolving materials, etc.
Article 15 the inventory falling price reserves shall be determined according to the following methods:
The ending inventory shall be valued according to the principle of the lower of cost and net realizable value. The inventory falling price reserves shall be withdrawn according to the difference between the cost of a single inventory item and its net realizable value. However, for the inventory with large quantity and low unit price, the inventory falling price reserves shall be withdrawn according to the inventory category.
Article 16 when determining the net realizable value of inventories, it shall be based on the reliable evidence obtained, and take into account the purpose of holding inventories, the impact of events after the balance sheet date and other factors. The net realizable value of inventories shall be determined according to the following principles:
(I) for inventories directly for sale, such as production costs and materials for sale, in the normal production and operation process, the net realizable value is determined by the amount of the estimated selling price of the inventory minus the estimated selling expenses and relevant taxes. For inventories held for the execution of sales contracts or labor contracts, the contract price shall be taken as the measurement basis of their net realizable value; If the quantity of inventory held is more than the quantity ordered in the sales contract, the net realizable value of the excess inventory is measured based on the general sales price. For materials used for sale, the market price shall be taken as the measurement basis of their net realizable value.
(II) for the inventory of materials that need to be processed, in the normal process of production and operation, the net realizable value is determined by the estimated selling price of the developed products minus the estimated cost to be incurred at the time of completion, the estimated selling expenses and relevant taxes. If the net realizable value of the developed product produced by it is higher than the cost, the material is measured at cost; If the decrease of material price indicates that the net realizable value of the developed product is lower than the cost, the material shall be measured according to the net realizable value, and the inventory falling price reserves shall be accrued according to the difference.
Article 17 under any of the following circumstances, the net realizable value of the inventory is zero, and the inventory falling price reserves shall be withdrawn in full:
(I) moldy and deteriorated inventory;
(II) expired inventory with no transfer value;
(III) inventories that are no longer needed in production and have no use value and transfer value;
(IV) others that are sufficient to prove that they have no use value and transfer
