财务报表附注翻译.doc

****** CO., LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
(All amounts in RMB Yuan)
I. Company Profile
******* Co., Ltd. (hereinafter referred to as the "Company") is a limited liability company (Sino-foreign joint venture) jointly invested and established by **** Co., Ltd. and ******* Limited on 24 June 2021. On December 26, 2021, the shareholders have been changed to ***** CO., LTD and ******* LIMITED.
Business License of Enterprise Legal Person License No.:
Legal Representative:
Registered Capital: RMB (Paid-in Capital: RMB )
Address:
Business Scope: Financing and leasing business; leasing business; purchase of leased property from home and abroad; residue value treatment and maintenance of leased property; consulting and guarantees of lease transaction (articles involved in the industry license management would be dealt in terms of national relevant stipulations)
II. Declaration on following Accounting Standard for Business Enterprises
The financial statements made by the Company are in accordance with the requirements of Accounting Standard for Business Enterprises, which reflects the financial position, financial performance and cash flow of the Company truly and completely.
III. Basic of preparation of financial statements
The Company implements the Accounting Standards for Business Enterprises (‘Finance and Accounting [2006] No. 3”) issued by the Ministry of Finance on February 15, 2006 and the successive regulations. The Company prepares its financial statements on a going concern basis, and recognizes and measures its accounting items in compliance with the Accounting Standards for Business Enterprises – Basic Standards and other relevant accounting standards, application guidelines and criteria for interpretation of provisions as well as the significant accounting policies and accounting estimates on the basis of actual transactions and events.
IV. The main accounting policies, accounting estimates and changes
Fiscal year
The Company adopts the calendar year as its fiscal year from January 1 to December 31.
Functional currency
RMB was the functional currency of the Company.
Accounting measurement attribute
The Company adopts the accrual basis for accounting treatments and double-entry bookkeeping of borrowing for financial accounting. The historical cost is generally as the measurement attribute, and when accounting elements determined are in line with the requirements of Accounting Standards for Enterprises and can be reliably measured, the replacement cost, net realizable value and fair value can be used for measurement.
Accounting method of foreign currency transactions
The Company’s foreign currency transactions adopt approximate spot exchange rate of the transaction date to convert into RMB in accordance with systematic and rational method; on the balance sheet date, the foreign currency monetary items use the spot exchange rate of the balance sheet date. All balances of exchange arising from differences between the balance sheet date spot exchange rate and the initial recognition or the former balance sheet date spot exchange rate, except that the exchange gains and losses arising by borrowing foreign currency for the construction or production of assets eligible for capitalization are transacted in accordance with capitalization principles, are included in profit or loss in this period; the foreign currency non-monetary items measured at historical cost will still be converted with the spot exchange rate of the transaction date.
The standard for recognizing cash equivalent
When making the cash flow statement, cash on hand and deposits readily to be paid will be recognized as cash, and short-term (usually no more than three months), highly liquid and readily convertible to known amounts of cash with insignificant risk of changes in value are recognized as cash equivalent.
Financial Instruments
Classification, recognition and measurement of financial assets
- The company at the time of initial recognition of financial assets divides it into the following four categories: financial assets measured at fair value with changes included in the profit or loss of this period, loans and receivables, financial assets available for sale and held-to-maturity investments. Financial assets are measured at fair value when initially recognized. Relevant transaction costs of financial assets measured at fair value with changes included in the profit or loss of this period are recognized in profit or loss of this period, and relevant transaction costs of other categories of financial assets are recognized in the amount initially recognized.
-- Financial assets measured at fair value with changes included in the profit or loss of this period refer to the short-term sales financial assets, including financial assets held for trading or financial assets measured at fair value with changes included in the profit or loss of this period designated upon initial recognition by the management. Financial assets measured at fair value with changes included in the profit or loss of this period are subsequently measured at fair value, and the interest or cash dividends obtained during the holding period will be recognized as investment income, and the gains or losses of the change in fair value at the end of this period are recognized in the profit or loss in this period. When it is disposed, the difference between the fair value and the initial recorded amount is recognized as investment income, while adjusting gains from changes in the fair value.
--Loans and receivables: the non-derivative financial assets without the price in an active market and with fixed and determinable recovery cost are classified as loans and receivables. Loans and receivables adopt the effective interest method and take amortized cost for subsequent measurement, and gains or losses arising from derecognition, impairment or amortization are included in the profit or loss of this period.
-- Financial assets available for sale: including non-derivative financial assets available for sale recognized initially and other non-derivative financial assets except for loans and receivables, held-to-maturity investments and trading financial assets. Financial assets available for sale are subsequently measured at fair value, and interest or cash dividends obtained during the holding period will be recognized as investment income, and gains or losses arising from the changes in fair value at the end of this period are recognized directly in owners' equity until the financial asset is derecognized or impaired and then is recognized as the profit or loss in this period.
-- Held-to-maturity investments: the non-derivative financial assets with clear intention and ability to hold to maturity by the management of the company, a fixed maturity date and fixed or determinable payments are classified as held-to-maturity investments. Held-to-maturity investments adopt the effective interest method and take amortized cost for subsequent measurement, and gains or losses arising from derecognition, impairment or amortization are included in the profit or loss of this period.
Classification, recognition and measurement of financial liabilities
- The company at the time of initial recognition of financial liabilities divides it into the following two categories: financial liabilities measured at fair value with changes included in the profit or loss of this period and other financial liabilities. Financial liabilities are measured at fair value when initially recognized. Relevant transaction costs of financial liabilities measured at fair value with changes included in the profit or loss of this period are recognized in profit or loss of this period, and relevant transaction costs of other financial liabilities are recognized in the amount initially recognized.
-- Financial liabilities measured at fair value with changes included in the profit or loss of this period include the trading financial liabilities and financial liabilities measured at fair value with changes included in the profit or loss of this period designated upon initial recognition. Financial liabilities are subsequently measured at fair value, and the gains or losses of the change in fair value are recognized in the profit or loss in this period.
-- Other financial liabilities: adopting the effective interest method and taking amortized cost for subsequent measurement. The gains or losses arising from derecognition or amortization is included in the profit or loss of this period.
Requirements for derecognition of financial liabilities
Financial liabilities shall be entirely or partially derecognized if the present obligations derived from them are entirely or partially discharged. Where the Company enters into an agreement with a creditor so as to substitute the current financial liabilities with new ones, and the contract clauses of which are substantially different from those of the current ones, it shall recognize the new financial liabilities in place of the current ones. Where substantial revisions are made to some or all of the contract clauses of the current financial liabilities, the Company shall recognize the new financial liabilities after revision of the contract clauses in place of the current ones entirely or partially.
Upon entire or partial derecognition of financial liabilities, differences between the carrying amounts of the derecognized financial liabilities and the consideration paid (including non-monetary assets surrendered or new financial liabilities assumed) are charged to profit or loss for the current period.
Where the Company redeems part of its financial liabilities, it shall allocate the carrying amounts of the entire financial liabilities between the relative fair values of the parts that continue to be recognized and the derecognized parts on the redemption date. Differences between the carrying amounts allocated to the derecognized parts and the consideration paid (including non-monetary assets surrendered and the new financial liabilities assumed) are charged to profit or loss for the current period.
Recognition and measurement for transfer of financial assets
If the Company has transferred nearly all of the risks and rewards relating to the ownership of the financial assets to the transferee, they shall be derecognized. If it retains nearly all of the risks and rewards relating to the ownership of the financial assets, they shall not be derecognized and will be recognized as a financial liability. If the Company has not transferred nor retained nearly all of the risks and rewards relating to the ownership of the financial assets:(1) to give up the control of the financial assets to be derecognized; (2) not giving up control of the financial asset to be recognized based on the extent of its continuing involvement in the transferred financial assets and liabilities are recognized accordingly.
If the transfer of entire financial assets satisfy the criteria for derecognition, differences between the amounts of the following two items shall be recognized in profit or loss for the current period: (1) the carrying amount of the transferred financial asset; (2) the aggregate consideration received from the transfer plus the cumulative amounts of the changes in the fair values originally recognized in the owners’ equity. If the partial transfer of financial assets satisfy the criteria for derecognition, the carrying amounts of the entire financial assets transferred shall be split into the derecognized and recognized parts according to their respective fair values and differences between the amounts of the following two items are charged to profit or loss for the current period: (1) the carrying amounts of the derecognized parts; (2) The aggregate consideration for the derecognized parts plus the portion of the accumulative amounts of the changes in the fair values of the derecognized parts which are originally recognized in the owners’ equity.
Determination of the fair value of financial instruments
- If financial instruments trade in an active market, the quoted price in an active market determines its fair value; if financial instrument trade not in an active market, the valuation techniques determine the fair value. Valuation techniques include recent market transaction price reference to the familiar situation and volunteer transaction, current fair value reference to other substantially similar financial instruments, discounted cash flow method and option pricing model and so on.
Test and Provisions for impairment loss on financial assets
--Except trading financial assets, the Company makes assessment on the carrying values of financial assets at the balance sheet date. If there is evidence that the fair value of specific financial asset has been impaired, provisions for impairment loss is made accordingly.
-- Measurement of impairment of financial assets measured at amortized cost
If there is objective evidence that the financial asset measured at amortized cost has been impaired, the carrying amount of the financial asset is written down to the present value of estimated future cash flows (excluding future credit losses that have not yet occurred), and the amount of reduction is recognized as impairment loss and is recognized in the profit or loss of this period. The Company carries out the impairment test of significant single financial asset separately, carries out the impairment test on insignificant single financial asset from a single or combination of angles, and carries out the impairment test on single asset without objective evidence of impairment along with the financial assets with similar credit risk characteristics to constitute a combination, but does not carry out the impairment test on the provision for impairment of financial assets based on the single in the portfolio. In the subsequent period, if there is objective evidence that the value of financial asset has been restored and recognized relevant to the objective matters occurring after the impairment, previously recognized impairment loss shall be reversed and charged into the profit or loss of this period. But the book value after the reversal should not exceed the amortized cost at the reversal date of the financial assets supposed no provision for impairment. When the financial assets measured at amortized cost actually occur loss, offset against the related provision for impairment.
--Available for sale financial assets
If there is objective evidence that an impairment of available for sale financial assets occurs, even though the financial asset has not been derecognised, the cumulative loss of decrease of the faire value originally recorded in the owner's equity should be transferred out and charged into the current profit and loss. Th