Notice on Financial Handling Issues in the Process of Revoking Subsidiary's Establishment of Branches

Regional companies: Considering that TJ Company and DL Company are going through the cancellation procedures, they may encounter related problems in the cancellation process and the establishment of branches. In order to better regulate the handling of financial matters related to the cancellation of subsidiaries and the establishment of branches, this notice is hereby issued. The main contents are as follows: 1. After the liquidation, the subsidiary shall settle the old accounts, that is, reset all assets, liabilities and equity accounts to zero, debit all liabilities and owner's equity account balances, and credit all asset account balances. 2. When the subsidiary is liquidated, the following items shall be cleared: (1) assets inventory, fixed assets inventory, furniture, office supplies and other physical assets inventory and assets inventory. The inventory of physical assets should include assets such as low-value consumables that are not recorded in the account but still have physical objects. In addition, cash should be counted, and bank deposits should be checked to confirm that the accounts are consistent. All cash on hand is deposited in the bank, and there should be no outstanding items in the bank deposit. After the bank deposits are distributed to shareholders as surplus assets, the original bank will issue a certificate that all bank accounts have zero balances and go through the formalities of account cancellation. (2) Clearing matters before the distribution of surplus assets, paying liquidation expenses and other expenses, paying unpaid taxes and employee social security expenses, clearing creditor's rights and debts, and distributing surplus assets to shareholders, etc. All work carried out in the name of the subsidiary to be cancelled shall be recorded in the old account set, and no unrecorded business items and original vouchers shall be left. Three. Accounting treatment of surplus assets distribution For the surplus assets distribution plan decided by the shareholders' meeting, the subsidiary shall make the following accounting treatment. (1) If the remaining assets of shareholders other than the controlling shareholder are distributed, the distribution resolution and transfer documents of the shareholders' meeting shall be attached. Borrowing: paid-in capital-undistributed profits of ××× shareholders (original invested capital) (the difference between the allocation amount determined by the shareholders' meeting and the original invested capital) Lending: bank deposits (or other subjects) (the allocation amount determined by the shareholders' meeting) (2) Distributing the remaining assets to the controlling shareholders, that is, the last voucher when settling the old accounts. Attachments include the resolutions of the shareholders' meeting on the distribution of surplus assets, the list of assets handed over by the newly established branch of Atomic Company and the liquidation group, the documents that the controlling shareholder designates the branch to undertake the assets of the revoked subsidiary, and the bank deposit transfer documents. Debit: paid-in capital-undistributed profits of the controlling shareholder (original invested capital) (all undistributed profits except losses borne by other shareholders) Accumulated depreciation loan: bank deposits (all bank deposits remaining in the book) Fixed assets IV. Establishment of accounts for branches (I) Establishment of accounts for branches The newly established branches set up "other payables-funds allocated by superiors" to account for the start-up funds and physical assets allocated by the head office. When filling in the report, the balance of this subject should be filled in as "paid-in capital". The accumulated profits and losses of branches are still reflected in "undistributed profits". Other current accounts of the Head Office are accounted for in the subject of "Other Payables-Head Office". (II) Accounting of funds and other assets allocated by the Head Office: the Head Office allocates start-up funds to branches through loans: bank deposits and loans: other payables-the funds allocated by the superior branches undertake other assets of the revoked subsidiaries, and the assets handover list handed over by the newly established branch and the liquidation group of Atomic Company and the documents designated by the Head Office to undertake the assets of the revoked subsidiaries are attached as vouchers. Borrowing: fixed assets loans: accumulated depreciation and other payables-funds allocated by higher authorities V. Preservation of financial files of cancelled subsidiaries The financial files of cancelled subsidiaries shall be collated and summarized, and designated by the Finance Department of the Head Office to be kept by newly established branches.