Non-monetary transactions in consolidated statements need to be eliminated.
Non-monetary transactions refer to the exchange of non-monetary assets between the two parties. This exchange involves no or only a small amount of monetary assets (i.e. premium). When a non-monetary transaction occurs, the parties to the transaction exchange non-monetary assets. At this time, the usual principles of revenue recognition and asset valuation are often not fully applicable.
Non-monetary transactions are exchanges between the two parties for non-monetary assets. This exchange does not involve or only involves a small amount of monetary assets (i.e. premium). It has been nearly two years since the promulgation of my country's new "Enterprise Accounting System". The system has clarified the main forms of non-monetary transactions and the general principles of accounting treatment. However, the relevant regulations on the preparation of consolidated accounting statements do not clarify the method of consolidation and elimination of non-monetary transactions within the enterprise group. This technical distortion will inevitably lead to incomplete consolidation of the consolidated accounting statements, and even the occurrence of group companies taking advantage of the system. Vacuum to make false claims.
According to the "Enterprise Accounting System", non-monetary transactions mainly include the following aspects: non-monetary transactions that do not involve price premiums; non-monetary transactions that involve price premiums; general tax-paying enterprises Non-monetary transactions involving inventories; non-monetary transactions involving multiple assets. Regarding the offset of non-monetary transactions in the consolidated accounting statements, there are three difficulties: first, you must be very familiar with the accounting treatment of non-monetary transactions; second, you must calculate the inflated increase or decrease due to non-monetary transactions from the perspective of the group company. The third is to be comprehensive and avoid omissions, that is, all accounting events that do not occur outside the group company should be treated as offsetting events in the consolidated accounting statements. The author believes that when formulating accounting standards for consolidated accounting statements, relevant parties should standardize the offset of non-monetary transactions in consolidated accounting statements as soon as possible so that practical work can be based on law. Based on these four situations, the author discusses the principles of offsetting treatment in the consolidated accounting statements of the group's non-monetary transaction business as follows.
1. Consolidated statement offsets for non-monetary transactions that do not involve price premiums
Non-monetary transactions that do not involve price premiums mainly solve the problem of exchanged assets Booking value issues. The actual cost of the assets exchanged in shall be based on the book value of the assets exchanged out plus the relevant taxes payable.
For such non-monetary transactions that occur between parent and subsidiary companies or between subsidiaries in a group company, the author believes that the offsetting principles when preparing consolidated accounting statements should be: (1) Consolidate the amounts within the group company The inflated asset value shall be offset or supplemented by the undercounted asset value. (2) Offset the over-accounted depreciation or impairment provisions caused by the overstatement of asset values; make up for the under-accounted depreciation or impairment reserves caused by the understatement of asset values. The "Accumulated Depreciation" account or the "Asset Impairment Provision" account is debited; the "Administrative Expenses" account or related accounts are credited. (3) When preparing consolidated financial statements continuously in subsequent years: 1. Offset or make up for the impact of the group company’s over-counted (or under-counted) depreciation or impairment reserves in the previous period on the undistributed profits at the beginning of the current period. The "Accumulated Depreciation" account is debited; the "Beginning Undistributed Profit" account is credited. 2. At the same time, the group company will write off or make up for the over-counted and under-counted asset values ??in the previous period. 3. Offset the over-accrued depreciation in the corresponding year. The "Accumulated Depreciation" account is debited; the "Administrative Expenses" account is credited.
Example 1: Company A and Company B are both subsidiaries of Jiuding Electric Power Group. In 2002, Company A exchanged its production equipment with a patented technology of Company B. The original book price of the equipment replaced by Company A was 3 million yuan, the depreciation allowance was 400,000 yuan, and the fair value was 2.2 million yuan. The original book price of the patented technology exchanged by Company B was 2.9 million yuan, and an impairment provision of 100,000 yuan has been made. The fair value of this intangible asset is RMB 2.2 million. Assume that the equipment replaced by Company B is managed as fixed assets. The equipment has a useful life of 10 years and is depreciated according to the straight-line method, without considering the residual value.
When the group company prepares consolidated financial statements in 2002, the offsetting entries should be:
(1) Debit: Intangible assets - patented technology 200,000
< p>Credit: Fixed assets 200,000(2) Debit: Accumulated depreciation 20,000
Credit: Management expenses 20,000
Prepare consolidated statements continuously in the following years However, offsetting entries still need to be prepared:
(1) Same as the first entry at the end of 2002.
(2) Debit: Accumulated depreciation 20,000
Credit: Undistributed profits at the beginning of the period 20,000
(3) Same as the second entry at the end of 2002.
2. Offset of consolidated accounting statements of non-monetary transactions involving premiums
For non-monetary transactions involving premiums, the focus of accounting treatment is the recognition of income. The income that should be recognized = (1 - book value of the assets exchanged out ÷ fair value of the assets exchanged out) × premium.
For non-monetary transactions involving premiums that occur between parent and subsidiary companies or subsidiaries in a group company, the author believes that the offsetting principles when preparing consolidated accounting statements should be: (1) Involving receipts and The premium paid will not be offset in any way. (2) Offset or make up for the inflated asset value due to non-monetary transactions within the group company and the understated asset value. (3) Offset the over-accounted depreciation or impairment provisions caused by the overstatement of asset values; make up for the under-accounted depreciation or impairment reserves caused by the understatement of asset values. (4) When preparing consolidated financial statements continuously in subsequent years, the impact of the group company’s over-provision (or under-provision) in depreciation or impairment reserves in the previous period on the undistributed profits at the beginning of the current period will be offset or supplemented; The overaccounted and underaccounted asset values ??shall be offset or made up; the overaccounted depreciation in the corresponding year shall be offset, and the underaccounted depreciation shall be made up.
Example 2: Company A is a wholly-owned subsidiary of Company B. In 2002, Company A exchanged its patent rights with Company B's production lathes. The book value of Company A's patent rights is 5 million yuan. The original book value of Company B's production lathe is 8 million yuan, with depreciation of 1 million yuan, impairment provision of 400,000 yuan, and fair value of 5.5 million yuan. Company A pays another 500,000 yuan to Company B. Both fixed assets and intangible assets are depreciated and amortized over 10 years.
When the group company prepares consolidated statements at the end of 2002, the offsetting entries should be:
1. Debit: fixed assets 1 100,000
Credit: intangible assets ——Patented technology 1 000 000
Non-operating expenses——Non-monetary transaction losses 100 000
2. Debit: administrative expenses 110 000
Credit: Accumulated depreciation 110,000
3. Debit: intangible assets 100,000
Credit: administrative expenses 100,000