Announcement on Changes in Accounting Estimates of Wholly Owned Subsidiaries
Release time:
2022-12-13
Securities Code: 002438 Securities abbreviation: Jiangsu Shentong Announcement No.: 2022-075
Jiangsu Shentong Valve Co., Ltd.
Announcement on Changes in Accounting Estimates of Wholly Owned Subsidiaries
the company and all members of the board of directors to ensure that information disclosure content is true, accurate and complete, no false records, misleading statements or major omissions. |
IMPORTANT CONTENT TIP:
This change in accounting estimates has no impact on the Company's business scope. In accordance with the provisions of the Enterprise Accounting Standards, this change in accounting estimate is accounted for using the prospective application method, does not involve retrospective adjustments, and will not affect the Company's financial position and results of operations in previous years.
Summary of changes in 1. accounting estimates
(I) Change Date
The starting date for this change in accounting estimates is January 1, 2023.
Reasons for changes in (II) accounting estimates
Ruifan Energy Saving Technology Co., Ltd. (hereinafter referred to as the "subsidiary" or "Ruifan Energy Saving") is a wholly-owned subsidiary of Jiangsu Shentong Valve Co., Ltd. (hereinafter referred to as the "Company"). In view of the overall development strategy and market demand of Ruifan Energy Conservation, Ruifan Energy Conservation will increase the number of projects contracting business (EPC projects) to undertake and execute in the future, so that the business income of project contracting will increase year by year. Based on the significant differences between the contract mode, project performance cycle, acceptance and settlement cycle of each stage, and inventory expression of EPC project and the business model of energy management contract (EMC), in order to truly reflect the actual payback and possible bad debt losses of different types of business of the company, and reflect the overall financial situation and operating results of the company more fairly, provide more reliable and accurate accounting information to facilitate the reading and understanding of report users. The company changes the bad debt provision ratio of bad debt provision using aging analysis method in receivables generated from project contracting business based on the historical payment of current project contracting projects, actual performance of projects and accounting estimates of similar businesses of comparable companies.
Details of changes in (III) accounting estimates
Among the receivables for which provision for bad debts is made according to the combination of credit risk characteristics, a comparison before and after the change in the provision for credit impairment losses using the ageing analysis method for receivables arising from engineering contracting operations is as follows:
Aging | Expected credit loss rate on accounts receivable (%) | |
Before change | After the change | |
Within 1 year (including 1 year) | 1.00 | 5.00 |
1-2 years (including 2 years) | 50.00 | 10.00 |
2-3 years (including 3 years) | 100.00 | 20.00 |
3-4 years (including 4 years) | 100.00 | 30.00 |
4-5 years (bearing year) | 100.00 | 50.00 |
More than 5 years | 100.00 | 100.00 |
Among the receivables generated by EMC's business, the provision for bad debts using the aging analysis method is still based on the proportion of bad debts estimated by the original accounting.
The impact of changes in 2. accounting estimates on the company.
This change in accounting estimate has no impact on the business scope of the subsidiary. In accordance with the provisions of the Enterprise Accounting Standards, this change in accounting estimate will be accounted for using the prospective application method, does not involve retrospective adjustments, and will not affect the financial position and operating results of the subsidiary in previous years.
Given that the subsidiary is unable to predict the recovery and balance of receivables arising from future engineering contracting operations for which provision for bad debts is made on an ageing basis, the amount of the impact of this change in accounting estimate on the subsidiary's profit and loss for future periods cannot be reasonably determined.
3. of the Board of Directors on the reasonableness of this change in accounting estimates
This change in accounting estimate is a comprehensive assessment of the accounts receivable collection cycle, accounts receivable structure, accounts receivable and historical bad debt write-off of different business types of Ruifan Energy Saving EMC and EPC. After combining with the bad debt provision standard of accounts receivable in the same industry, the company adjusts the accounting estimate of bad debt reserve according to the actual business changes of subsidiaries in order to reflect the financial situation and operating performance of subsidiaries more truly and objectively. This change in accounting estimate is treated using the prospective application method and does not require retrospective adjustments to the disclosed financial statements.
In summary, all directors of the Company unanimously agreed to the change in accounting estimates.
4. Approval Procedure
In accordance with the relevant provisions of the "Shenzhen Stock Exchange Stock Listing Rules", "Accounting Standards for Business Enterprises No. 28-Accounting Policies, Changes in Accounting Estimates and Error Corrections" and the "Articles of Association", this change in accounting estimates was approved by the fourth session of the sixth board of directors The second meeting and the fourth meeting of the sixth board of supervisors reviewed and approved, and the independent directors issued independent opinions, and implemented on January 1, 2023.
This change in accounting estimates does not need to be submitted to the general meeting of shareholders for consideration.
5. opinion of independent directors on this change in accounting estimate
Ruifan Energy Saving combines the historical collection of current project contracting projects, the actual performance of the project and the accounting estimates of similar businesses of comparable companies to change the proportion of credit impairment losses accrued by aging analysis in receivables generated by project contracting business, which meets the needs of Ruifan Energy Saving business development and helps to reflect the financial situation and operating results of the enterprise more fairly. This change will not have an impact on the financial position and operating results of the subsidiary in previous years, there is no need to make retrospective adjustments to the disclosed financial reports, and there is no harm to the interests of the Company's shareholders in this change in accounting estimate. Therefore, we agree to the change in accounting estimates of Ruifan Energy Conservation.
6. opinion of the Supervisory Board on the change in accounting estimates
This change in accounting estimate was made after taking full account of the actual asset position of Ruifan Energy Conservation and similar business of comparable companies. This change uses the prospective application method and does not involve retrospective adjustments to previous years' financial reports. The changed accounting estimates will more objectively, fairly and truthfully reflect the financial position and results of operations of the subsidiary. The relevant decision-making procedures of the Company are in compliance with the relevant provisions of laws and regulations, and there is no harm to the interests of shareholders and the Company. Therefore, we agree that Ruifan Energy Conservation will implement this change in accounting estimates.
7. Documents for Reference
1. Resolutions of the fourth meeting of the sixth board of directors;
2. Resolution of the fourth meeting of the sixth board of supervisors;
3. Independent opinions of independent directors on matters related to the fourth meeting of the sixth board of directors.
It is hereby announced.
Board of Directors of Jiangsu Shentong Valve Co., Ltd.
13 December 2022
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