How Should The Accounts Receivable Be Done Under The New Rules?

Should the general enterprise's accounts receivable be dealt with in accordance with the relevant standards of financial instruments? Should we follow the method of financial instrument guidelines in carrying out the impairment test, will the old age analysis method be no longer applicable?

Under the new guidelines, accounts receivable belong to financial assets.

Therefore, accounts receivable of all enterprises should be accounted for in accordance with the relevant provisions of the accounting standards for Enterprises No. twenty-second - confirmation and measurement of financial instruments.

The allowance for bad debts of all enterprises should also be prepared according to the requirements of the accounting standards for Enterprises No. twenty-second - confirmation and measurement of financial instruments.

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The application guideline No. twenty-second - confirmation and measurement of financial instruments "provides for the provision of bad debts for accounts receivable:

Receivables for a single amount of money should be carried out separately.

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If there is any objective evidence that the impairment has occurred, the impairment loss shall be recognized according to the difference between the current value of the future cash flow and its book value, and the provision for bad debts shall be made.

For a non major amount of receivables, the impairment test may be carried out separately.

The provision for bad debts can also be divided into several combinations according to the similar credit risk characteristics with the receivables that have not been impaired after the individual tests, and then the impairment loss should be calculated according to a certain proportion of the balance sheet balance of the receivables combination, and the provision for bad debts shall be prepared.

According to a certain proportion of the balance of the receivable balance, the provision for bad debts should reflect the actual impairment loss of each item, that is, the book value of each combination exceeds the amount of its future cash flow present value.

The enterprise shall, based on the actual loss rate of the accounts receivable combination with similar or similar credit risk characteristics in the previous year, determine the proportion of the provision for bad debts in the current period according to the current situation, and calculate the allowance for bad debts to be calculated in the current period.

From the 2007 semi annual report of listed companies that have been disclosed, many listed companies still account for all accounts receivable in accordance with aging analysis method, that is, it is not clear whether the amount of individual accounts receivable is significant.

Such treatment does not conform to the "accounting standards for Enterprises No. twenty-second - Financial Instruments Recognition and measurement" guidelines.

An enterprise should distinguish between the amount of a single account and the amount of bad debts when it accounts for the accounts receivable.

Accounts receivable with a significant amount should be calculated according to the difference between the current value of future cash flow and its book value. The non accounts receivable of a single amount can be calculated according to the original age analysis method.

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Compared with the existing inventory rules (2001) and the enterprise accounting system, the accounting standards for Enterprises No. first - Inventory (hereinafter referred to as the new guidelines) have not changed much in content. The main changes are reflected in the measurement of inventory in different channels.

In addition to guideline No. first, there are seventh, twelfth, seventeenth and 20 criteria for measuring inventory.

This paper tries to analyze some changes in the accounting system of inventory in the new standard system.

According to the existing guidelines and systems, the creditors' inventory due to debt restructuring will not be recognized as profit or loss according to the book value and related taxes and fees of the restructured creditor's rights.

"Accounting standards for Enterprises No. seventeenth - borrowing costs" stipulates that assets that meet capitalization conditions refer to assets such as fixed assets, investment real estate, inventory and other assets that need to be purchased or built for a considerable period of time to achieve the intended use or sale status.

It can be seen that the guidelines extend the scope of assets that should be capitalized, and the inventory that needs to be purchased or built for a long time to achieve a predetermined sale status is also an asset that meets capitalization conditions.

For certain industries with long production cycle, such as shipbuilding, aircraft manufacturing and some other machinery manufacturing industries, the borrowing cost capitalization of inventory production will be allowed.

This will directly affect the measurement of the assets and expenses of enterprises in these industries, thereby affecting the financial situation and operating results of enterprises.

According to the existing guidelines and systems, fair value is not allowed in non monetary assets pactions, usually not recognised.

The amount of the changed stock is recorded on the basis of the book value of the replacement assets plus the relevant tax and tax (minus the input tax). If the premium is added, it should be supplemental with the premium paid (paid party) or minus the supplementary price plus the confirmed extra business income (the receiving party).

According to the accounting standards for Enterprises No. seventh - non monetary assets exchange, the initial measurement of inventory is more complex. Enterprises should first judge pactions, that is to say, whether the exchange of non monetary assets meets two conditions at the same time (the exchange has the commercial value and the fair value of assets exchanged or exchanged for assets can be reliably measured).

The initial measurement of inventory under different circumstances is summarized in Table 1.