1. According to your description, the meaning of each item is as follows:
1. "The provision for bad debts for accounts receivable is approximately 375.09 million yuan." The company receives money from selling products. Not coming back.
2. "The provision for inventory price decline is approximately 243.98 million yuan." The market price of the products that the company cannot sell has now fallen.
3. “The provision for impairment of long-term equity investments is approximately 14.33 million yuan,” indicating a loss in equity investment.
4. “The provision for impairment of projects under construction is approximately 39.07 million yuan,” and newly built projects have suffered losses.
5. "In 2008, the company wrote off approximately 88.45 million yuan of bad debts left over from history." The previous bad debts could not be recovered at all and were compensated.
In a word, the company suffered a book loss of 672.47 million yuan due to the above reasons.
2. The meaning of accruing asset impairment provisions
1. The meaning of accruing asset impairment provisions is that from a prudent point of view, these things need to be evaluated for possible losses. And calculate the possible losses and treat them as losses, which is a hypothetical loss that may or may not be realized, but you should consider it carefully and prepare it and treat it as a realized loss
This is represented by a number on the accounting statement, that is, if all this year is treated as a loss, it will be treated as if it is gone, and it will be treated as a loss on the statement.
2. "Enterprise Accounting System" 》stipulates that eight impairment provisions are made for assets, which are:
(1) Bad debt provisions made for accounts receivable and other receivables;?
p>(2) Short-term investment price decline provisions accrued for short-term investments such as stocks and bonds;?
(3) Long-term investments accrued for long-term investments such as long-term equity investments and long-term debt investments Impairment provisions; ?
(4) Inventory depreciation provisions accrued for raw materials, packaging, low-value consumables, inventory commodities and other inventories; ?
(5) Fixed asset impairment provisions accrued for fixed assets such as houses, buildings, machinery and equipment;
(6) Intangible asset impairment provisions accrued for intangible assets such as patent rights and trademark rights;
(7) Impairment provisions for projects under construction and entrusted loan impairment provisions for entrusted loans;
(8) In addition to monetary funds, notes receivable, prepaid accounts, long-term deferred expenses, etc. Corresponding impairment provisions have been made for assets.
Extended information:
Provision for asset impairment is a reflection of the prudence principle.
The principle of prudence, that is, the principle of conservatism, means that when certain economic businesses have several different accounting treatment methods and procedures to choose from, without affecting reasonable choices, all accounting treatment methods and procedures should be used as much as possible. Accounting should be carried out using methods and procedures that will have the least impact on shareholders' rights and interests, and possible losses and expenses should be reasonably calculated. This is the so-called "it is better to estimate possible losses than to estimate possible gains."
The principle of prudence is reflected in many aspects of accounting, including one aspect of assets. That is, enterprises should comprehensively inspect all assets regularly or at least at the end of each year, and make impairment provisions for reasonably expected losses, including: short-term investment impairment provisions, long-term investment impairment provisions, fixed asset impairment provisions, intangible assets Impairment provisions, impairment provisions for projects under construction, impairment provisions for entrusted loans, bad debt losses provisions, and inventory depreciation provisions.
Reference material: Asset impairment provision-Baidu Encyclopedia