Why should the internal creditor's rights and debts offset the amount of the previous period when preparing the working draft of merger?

1) Preparation of offset items in the consolidated balance sheet The consolidated balance sheet is prepared by combining the amounts of assets, liabilities and owners' equity on the basis of the individual balance sheets of the parent company and subsidiaries and offsetting the internal transaction items. (1) Long-term investment projects offset the equity capital investment project amount of the parent company to the subsidiary company to offset the share of the parent company in the owner's equity of the subsidiary company. The consolidated price difference at the time of offset is separately reflected in the long-term investment project as a "consolidated price difference" item in the consolidated balance sheet (the credit balance is expressed as a negative number). Where subsidiaries invest in each other, the parent company shall refer to the above practice to offset the amount of equity capital investment projects with the corresponding amount in other subsidiaries' owner's equity-related projects. (2) Creditor's rights and debts offset the creditor's rights and debts between the parent company and its subsidiaries, including accounts receivable, accounts payable, accounts received in advance, prepayments, etc. , should cancel each other out at compile time. When preparing offset entries in the consolidated working paper, debit items such as accounts payable and accounts received in advance, and credit items such as accounts receivable and accounts received in advance. For the bonds held by the parent company, subsidiaries and subsidiaries, the parent company should also offset each other when preparing consolidated financial statements. When preparing the offset entry of the consolidated working paper, debit the account of "bonds payable" and credit the account of "long-term investment" or "short-term investment". The difference between internal bond investment and bonds payable in long-term investment should be treated as "consolidated spread". When the amount of bond investment in long-term investment is higher than the corresponding amount of bonds payable, when making offset entries, debit the "consolidated price difference" account and credit the "long-term investment" account; When the amount of internal bond investment in long-term investment is lower than the corresponding amount of bonds payable, when making offset entries, debit the "long-term investment" account and credit the "consolidated price difference" account. After the accounts receivable and accounts payable between the parent company and its subsidiaries and subsidiaries offset each other, the amount of bad debt provision accrued for offsetting accounts receivable should also offset each other. In the consolidated balance sheet, the provision for bad debts should be listed according to the amount of accounts receivable after offset. In the consolidated working paper, when an offset entry is prepared to offset the bad debt provision accrued by accounts receivable, the bad debt provision account is debited and credited to the management expense account. When preparing consolidated financial statements in previous accounting periods, the amount of bad debt reserve offset by internal accounts receivable shall be debited to the account of bad debt reserve and credited to the account of profit distribution at the end of the year when preparing offset entries in consolidated financial statements in this period. In order to offset the bad debt reserve accrued due to the increase of internal accounts receivable in the current period, when offsetting the entries, debit the "bad debt reserve" account and credit the "management expense" account; Write off the bad debt reserve written off due to the decrease of internal accounts receivable in the current period. When preparing offset entries, debit the "management expenses" account and credit the "bad debt reserve" account. (3) Unrealized profits from internal sales shall be offset with each other and listed as offset amount. For offset entries, please refer to the relevant part of the consolidated income statement. (4) In fixed assets and other related items, the unrealized sales profit generated by internal sales should be offset and listed as offset amount. For offset entries, please refer to the relevant part of the consolidated income statement. (5) Owners' equity of subsidiaries that do not belong to the parent company. The amount of each item should be regarded as minority shareholders' equity, and the items should be listed separately before the owners' equity item in the consolidated balance sheet, and reflected by the total amount. (6) The amount of undistributed profits in owners' equity shall be filled in according to the amount of undistributed profits at the end of the period in the consolidated profit distribution table. 2) The consolidated income statement is based on the income statements of the parent company and subsidiaries, and the amount of each item is consolidated on the basis of offsetting the following items. (1) Internal sales revenue offset. When all the goods sold internally are sold externally, the amount of internal sales revenue shall be offset in the consolidated sales revenue item, and the amount of purchase cost of the goods purchased internally shall be offset in the consolidated sales cost item. When preparing the offset entries of the consolidated working papers, debit the subject of "main business income" and credit the subject of "main business cost". When all the goods sold internally are not sold externally to form inventory, the amount of internal sales revenue is offset in the consolidated sales revenue item, the unrealized amount of internal sales profit is offset in the inventory item, and the cost amount of internal sales goods is offset in the consolidated sales cost item. When preparing the offset entry of the consolidated working draft, debit the account of "main business income" and credit the account of "inventory" (offset in consolidated balance sheet) and the account of "main business cost". Unrealized internal sales profit is determined by multiplying the sales gross profit margin of the company selling the commodity by the internal sales revenue amount, where: sales gross profit margin = (sales revenue-sales cost)/sales revenue × 100%. In the case of partial sales of goods for internal sales, realized internal sales amount and unrealized internal sales amount should be handled separately: unrealized internal sales profits included in inventory in previous accounting periods should be handled. Inventories formed by internal sales offset unrealized internal sales profits in previous accounting periods, which are treated as realized sales in the current period when the consolidated financial statements are prepared, and the unrealized internal sales profits included in them are treated as realized profits in the current period when the consolidated financial statements are prepared. When preparing the offset entries of the consolidated working papers, the undistributed profit at the beginning of the year should be debited and credited to the main business cost according to the amount of unrealized internal sales profit offset in the inventory of the consolidated financial statements prepared in the previous period; The inventory carried forward from the previous period is treated as the inventory purchased in the current period, and the internal sales revenue, internal sales cost and unrealized internal sales profit are offset respectively according to the above situation. (2) Offset of unrealized internal sales profits generated by internal fixed assets transactions. The fixed assets transaction between the parent company and its subsidiaries refers to the purchase and sale of fixed assets between the parent company and its subsidiaries, in which one party sells its own products and the other party buys the other's products as fixed assets. For the fixed assets that have not been depreciated, the unrealized internal sales profit included in them is offset as follows: the unrealized internal sales profit included in the internal sales cost and the original price of the fixed assets are offset against the internal sales income, that is, the sales income of products in the consolidated sales income items is offset; The amount to offset the product sales cost in the consolidated sales cost item; Unrealized internal sales profits are offset in the original price of consolidated fixed assets. When preparing offset entries, debit "operating income" and credit "operating cost" and "original price of fixed assets". During the use of fixed assets, unrealized internal sales profits included in the original price of fixed assets must be offset when preparing consolidated financial statements for each period until the fixed assets exit the enterprise group. When preparing the offset entries in the consolidated working draft, the account of "undistributed profit at the beginning of the year" should be debited and the account of "original price of fixed assets" should be credited, the amount of which is the amount of the original value of fixed assets in the previous accounting period to offset the unrealized internal sales profit. For the depreciated fixed assets, the offset of unrealized internal sales profit is as follows: during the financial period when the fixed assets transaction occurs, the following offset processing should be carried out: in the current period when the fixed assets transaction occurs, the internal sales income is offset from the unrealized internal sales profit and the original price of the fixed assets included in the internal sales cost, that is, the sales income amount of the fixed assets transaction is offset in the consolidated sales income item; The amount used to offset the sales cost of fixed assets transactions in the consolidated sales cost item; The unrealized internal sales profit in the original price of fixed assets is offset in the original price of consolidated fixed assets. When preparing offset entries, debit "operating income" and credit "operating cost" and "original price of fixed assets". When drawing depreciation, unrealized internal sales profit included in the depreciation of fixed assets should also be offset. Offset refers to the difference between the depreciation of fixed assets in the current period and the depreciation accrued according to the original price of fixed assets, excluding unrealized internal sales profits. When the straight-line method is adopted, that is, the total unrealized internal sales profit included in the original price of fixed assets is divided by the service life of fixed assets. When preparing offset entries of consolidated working papers, debit the account of "accumulated depreciation" and credit the account of "management expenses". During the accounting period from the transaction of fixed assets to the liquidation and scrapping of fixed assets, the following offsets shall be made: Unrealized internal sales profits included in internal sales of fixed assets shall be offset. When preparing the offset entry of the consolidated working paper, debit the "undistributed profit at the beginning of the year" and credit the "original price of fixed assets" account. Offset unrealized internal sales profit included in depreciation of internal purchased fixed assets. The offset amount is the difference between the depreciation accrued in the current period of fixed assets and the depreciation accrued at the original price of fixed assets after deducting the unrealized internal sales profit. When preparing offset entries of consolidated working papers, debit the account of "accumulated depreciation" and credit the account of "management expenses". Unrealized internal sales profit included in the original internal sales price of fixed assets shall be offset against accumulated depreciation in previous accounting periods. When preparing the offset entry of the consolidated working draft, debit the "accumulated depreciation" account and credit the "undistributed profit at the beginning of the year" account. When the fixed assets are scrapped and cleaned up, the total unrealized internal sales profit included in the original price of the fixed assets shall be offset by the depreciation expense amount in the previous period (that is, the realized internal sales profit amount) included in the original price of the fixed assets before scrapping and cleaning. When making offset entries in the consolidated working papers, the undistributed profits at the beginning of the year are debited, and the management expenses and non-operating expenses (or non-operating income) are credited. Among them, the amount of management expenses is the difference between the depreciation of fixed assets in the current period and the depreciation of fixed assets at the original price after deducting unrealized internal sales profits. If there are few fixed assets transactions between the parent company and its subsidiaries, or their transactions have little impact on the financial position and operating results of the enterprise group, their fixed assets transactions can also be regarded as transactions outside the enterprise group, and they are not offset in accordance with the above provisions. (3) The investment income of bonds held by the parent company, subsidiaries and subsidiaries should offset the corresponding interest expenses. When preparing the offset entries of the consolidated working papers, debit the "investment income" account and credit the "financial expenses" account. (4) The parent company offsets the equity capital investment income of its subsidiaries. (5) The balance of the "net profit" of the subsidiary after deducting the investment income of the parent company is the current profit and loss of minority shareholders. For the offset entries and manuscripts prepared in the merger, please refer to the relevant provisions of the consolidated profit distribution table in these Provisions. The current profit and loss of minority shareholders shall be listed separately as "minority shareholders' profit and loss" in the consolidated income statement and listed before the "net profit" item. (6) The balance of all profits and losses minus the profits and losses held by minority shareholders is net profit. 3) Preparation of offset items in consolidated profit distribution table The consolidated profit distribution table is prepared by offsetting the amount of each item in the subsidiary profit distribution table based on the data in the parent company's and subsidiary company's profit distribution tables. (1) For a wholly-owned subsidiary, undistributed profit items at the beginning of the year in the subsidiary's profit distribution table, paid-in capital items, capital reserve items, surplus reserve items and investment income items in the parent company's income statement, equity capital investment items of the parent company in the subsidiary, surplus reserve items (or statutory reserve fund, statutory public welfare fund, any reserve fund and production development fund) and profits payable shall be included in the subsidiary's profit distribution table. When preparing the offset entries of the consolidated working papers, debit the investment income, undistributed profits at the beginning of the year, paid-in capital, capital reserve, surplus reserve and other subjects, and credit the long-term investment, surplus reserve (or statutory reserve fund, statutory public welfare fund, any reserve fund, production development fund) and profits payable and other subjects. In the consolidated accounting statements, the item of "drawing surplus reserve" should be the sum of the following two items: the surplus reserve that the parent company should draw from the net profit after deducting the income of the investment subsidiary (when this part of the net profit is negative, it is calculated as zero); The surplus reserves extracted by subsidiaries owned by the parent company and the surplus reserves extracted by the parent company from the income of investment subsidiaries are relatively large [34]. When the offset difference occurs in the above offset, the difference will be treated as consolidated price difference. When the debit amount of the above offset entry is greater than the credit amount, the "consolidated price difference" account shall be credited; When the debit amount of the above offset entry is less than the credit amount, the "comprehensive price difference" account should be debited. (2) For non-wholly-owned subsidiaries, undistributed profit items, paid-in capital items, capital reserve items, surplus reserve items in the subsidiary's balance sheet and investment income items in the parent company's income statement, minority shareholders' profit and loss items, parent company's equity capital investment items in subsidiaries, minority shareholders' equity items, surplus reserve (or statutory reserve fund, statutory public welfare fund, arbitrary reserve fund and production generating fund) and profits payable in the subsidiary's profit distribution table (. When preparing the offset entries of the merger working papers, debit the investment income, minority shareholders' profits and losses, undistributed profits at the beginning of the year, paid-in capital, capital reserve and surplus reserve, and credit the long-term investment and surplus reserve (or withdraw the statutory provident fund, statutory public welfare fund and any provident fund, reserve fund and production development fund). Among them, the amount of minority shareholders' equity is calculated and determined according to the amount of subsidiary owners' equity minus the share held by the parent company. When the offset difference occurs in the above offset, the difference will be treated as consolidated price difference. When the debit amount of the above offset entry is greater than the credit amount, the "consolidated price difference" account shall be credited; When the debit amount of the above offset entry is less than the credit amount, the "comprehensive price difference" account should be debited. 4) Preparation of consolidated cash flow statement There are two methods to prepare consolidated cash flow statement. One method is the direct method, which is based on the consolidated balance sheet and consolidated income statement and compiled by the same method as the individual cash flow statement; The other method is the indirect method, which is based on the individual cash flow statements included in the consolidation scope, prepares offset entries to offset related transactions and obtains the consolidated cash flow statement. (1) When minority shareholders increase their equity investment in subsidiaries, the item "cash received from investment" under "cash flow from financing activities" in the consolidated cash flow statement is separately reflected as "cash received from equity investment in subsidiaries". (2) Cash dividends paid by subsidiaries to minority shareholders are reflected in the item "Dividends paid by subsidiaries to minority shareholders" after the item "Cash flow generated by financing activities" in the consolidated cash flow statement. (3) When minority shareholders withdraw their equity investment in subsidiaries according to law, the item "other cash paid related to financing activities" under "cash flow generated by financing activities" in the consolidated cash flow statement is separately reflected as "cash paid by subsidiaries to minority shareholders according to law".