TigerResearch/tigerbot-earning-plugin huggingface dataset:
recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting profit nor taxable profit (or deductible loss). Deferred tax is not recognised for taxable temporary differences arising from the initial recognition of goodwill.
At the balance sheet date, deferred tax is measured based on the tax consequences that
would follow from the expected manner of recovery or settlement of the carrying amounts of the assets and liabilities, using tax rates enacted at the balance sheet date that are expected to be applied in the period when the asset is recovered or the liability is settled.
The carrying amount of a deferred tax asset is reviewed at each balance sheet date, and is reduced to the extent that it is no longer probable that the related tax benefits will be utilised. Such reduction is reversed to the extent that it becomes probable that sufficient taxable
profits will be available.
At the balance sheet date, deferred tax assets and deferred tax liabilities are offset if all of the following conditions are met:
- the taxable entity has a legally enforceable right to offset current tax liabilities and current tax assets;
- they relate to income taxes levied by the same tax authority on either:- the same taxable entity; or
- different taxable entities which intend either to settle the current tax liabilities and current tax assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or deferred tax assets are expected to be settled or recovered.
28 Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration.
To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:
- the contract involves the use of an identified asset. An identified asset may be specified explicitly or implicitly specified in a contract and should be physically distinct, or capacity portion or other portion of an asset that is not physically distinct but it represents
substantially all of the capacity of the asset and thereby provides the customer with the right to obtain substantially all of the economic benefits from the use of the asset. If the
supplier has a substantive substitution right throughout the period of use, then the asset is not identified;
- the lessee has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use;
- the lessee has the right to direct the use of the asset.
For a contract that contains more separate lease components, the lessee and the lessor separate lease components and account for each lease component as a lease separately. For a contract that contains lease and non-lease components, the lessee and the lessor
separate lease components from non-lease components. For a contract that contains lease and non-lease components, the lessee allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. The lessor allocates the consideration in the contract in accordance with the accounting policy in Note III.23.
(1) As a lessee
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability, any lease payments made at or before the commencement date (less any lease incentives received), any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease.
The right-of-use asset is depreciated using the straight-line method. If the lessee is
reasonably certain to exercise a purchase option by the end of the lease term, the right-of- use asset is depreciated over the remaining useful lives of the underlying asset. Otherwise, the right-of-use asset is depreciated from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. Impairment losses of
right-of-use assets are accounted for in accordance with the accounting policy described in Note III.19.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate.
A constant periodic rate is used to calculate the interest on the lease liability in each period during the lease term with a corresponding charge to profit or loss or included in the cost of assets where appropriate. Variable lease payments not included in the measurement of the lease liability is charged to profit or loss or included in the cost of assets where appropriate as incurred.
Under the following circumstances after the commencement date, the Group remeasures lease liabilities based on the present value of revised lease payments:
- there is a change in the amounts expected to be payable under a residual value guarantee;
- there is a change in future lease payments resulting from a change in an index or a rate used to determine those payments;
- there is a change in the assessment of whether the Group will exercise a purchase,
extension or termination option, or there is a change in the exercise of the extension or termination option.
When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The
Group recognises the lease payments associated with these leases in profit or loss or as the cost of the assets where appropriate using the straight-line method or other systematic basis over the lease term.
(2) As a lessor
The Group determines at lease inception whether each lease is a finance lease or an
operating lease. A lease is classified as a finance lease if it transfers substantially all the
risks and rewards incidental to ownership of an underlying asset irrespective of whether the legal title to the asset is eventually transferred. An operating lease is a lease other than a finance lease.
When the Group is a sub-lessor, it assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the
underlying asset. If a head lease is a short-term lease to which the Group applies practical expedient described above, then it classifies the sub-lease as an operating lease.
Under a finance lease, at the commencement date, the Group recognises the finance lease receivable and derecognises the finance lease asset. The finance lease receivable is initially measured at an amount equal to the net investment in the lease. The net investment in the lease is measured at the aggregate of the unguaranteed residual value and the present
value of the lease receivable that are not received at the commencement date, discounted using the interest rate implicit in the lease.
The Group calculates and recognises interest income for each period of the lease term based on a fixed periodic interest rate. The derecognition and impairment of the finance lease receivable are recognised in accordance with the accounting policy in Note III.9.
Variable lease payments not included in the measurement of net investment in the lease are recognised as income as they are earned.
Lease receipts from operating leases is recognised as income using the straight-line method or other systematic basis over the lease term. The initial direct costs incurred in respect of the operating lease are initially capitalised and subsequently amortised in profit or loss over the lease term on the same basis as the lease income. Variable lease payments not included in lease receipts are recognised as income as they are earned.
29 Assets held for sale
The Group classified a non-current asset or disposal group as held for sale when the
carrying amount of a non-current asset or disposal group will be recovered through a sale transaction rather than through continuing use,.
A disposal group refers to a group of assets to be disposed of, by sale or otherwise, together as a whole in a single transaction and liabilities directly associated with those assets that will be transferred in the transaction.
A non-current asset or disposal group is classified as held for sale when all the following criteria are met:
- According to the customary practices of selling such asset or disposal group in similar
transactions, the non-current asset or disposal group must be available for immediate sale in their present condition subject to terms that are usual and customary for sales of such assets or disposal groups;
- Its sale is highly probable, that is, the Group has made a resolution on a sale plan and has obtained a firm purchase commitment. The sale is to be completed within one year.
Non-current assets or disposal groups held for sale are stated at the lower of carrying
amount and fair value (see Note III.20) less costs to sell (except financial assets (see note III.9), deferred tax assets (see note III.27). Any excess of the carrying amount over the fair value (see Note III.20) less costs to sell is recognised as an impairment loss in profit or loss.
30 Hedge accounting
Hedge accounting is a method which recognises in profit or loss (or other comprehensive income) the gain or loss on the hedging instrument and the hedged item in the same
accounting period(s) to represent the effect of risk management.
Hedged items are items that expose the Group to risks of changes in fair value or cash flows and that are designated as being hedged and can be reliably measured. The Group’s
hedged items include a firm commitment that is settled with a fixed amount of foreign currency and that exposes the Group to foreign currency risk.
A hedging instrument is a designated financial instrument whose changes in fair value or
cash flows are expected to offset changes in the fair value or cash flows of the hedged item. For a hedge of foreign currency risk, the foreign currency risk component of a non-derivative financial asset or non-derivative financial liability may also be designated as a hedging
instrument provided that it is not an investment in an equity instrument for which an entity has elected to present changes in the fair value in other comprehensive income.
The Group assesses at the inception of a hedging relationship, and on an ongoing basis, whether the hedging relationship meets the hedge effectiveness requirements. A hedging relationship is regarded as having met the hedge effectiveness requirements if all of the following conditions are satisfied:
- There is an economic relationship between the hedged item and the hedging instrument.- The effect of credit risk does not dominate the value changes that result from the
economic relationship.
- The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the entity actually hedges and the quantity of the hedging
instrument that the entity actually uses to hedge that quantity of the hedged item.
When a hedging relationship no longer meets the hedge effectiveness requirements due to the hedge ratio, but the risk management objective of the designated hedging relationship remains unchanged, the Group rebalances the hedging relationship. Rebalancing refers to the adjustments made to the designated quantities of the hedged item or the hedging
instrument of an already existing hedging relationship for the purpose of maintaining a hedge ratio that complies with the hedge effectiveness requirements.
The Group discontinues applying hedge accounting in any of the following circumstances:- The hedging relationship no longer meets the risk management objective on the basis of which it qualified for hedge accounting.
- The hedging instrument expires or is sold, terminated or exercised.
- There is no longer an economic relationship between the hedged item and the hedging
instrument or the effect of credit risk starts to dominate the value changes that result from that economic relationship.
- The hedging relationship no longer meets other criteria for applying hedge accounting. Cash flow hedges
A cash flow hedge is a hedge of the exposure to variability in cash flows. The portion of the gain or loss on a hedging instrument that is determined to be an effective hedge is
recognised in other comprehensive income as a cash flow hedge reserve. The amount of the cash flow hedge reserve is adjusted to the lower of the following (in absolute amounts):
- the cumulative gain or loss on the hedging instrument from inception of the hedge;
- the cumulative change in present value of the expected future cash flows on the hedged item from inception of the hedge.
The change in the amount of the cash flow hedge reserve is recognised in other comprehensive income in each period.
The portion of the gain or loss on the hedging instrument that is determined to be ineffectiveness is recognised in profit or loss.
If a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability, or a hedged forecast transaction for a non-financial asset or non-financial liability becomes a firm commitment for which fair value hedge accounting is
applied, the Group removes that amount from the cash flow hedge reserve and includes it in the initial cost or other carrying amount of the asset or liability.
For cash flow hedges other than those covered above, that amount is reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment in the same period or periods during which the hedged expected future cash flows affect profit or loss.
When the Group discontinues hedge accounting for a cash flow hedge, the amount of the accumulated cash flow hedge reserve recognised in other comprehensive income is
accounted for as follows:
- If the hedged future cash flows are still expected to occur, that amount will remain in the cash flow hedge reserve, and be accounted for in accordance with the above policy.- If the hedged future cash flows are no longer expected to occur, that amount is
immediately reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment.
31 Profit distributions
Dividends or profit distributions proposed in the profit appropriation plan, which will be
approved after the balance sheet date, are not recognised as a liability at the balance sheet date but are disclosed in the notes separately.
32 Related parties
If a party has the power to control, jointly control or exercise significant influence over
another party, or vice versa, or where two or more parties are subject to common control or joint control from another party, they are considered to be related parties. Related parties may be individuals or enterprises. Enterprises with which the Company is under common control only from the State and that have no other related party relationships are not
regarded as related parties.
In addition to the related parties stated above, the Company determines related parties based on the disclosure requirements of Administrative Procedures on the Information Disclosures of Listed Companies issued by the CSRC.
33 Segment reporting
Reportable segments are identified based on operating segments which are determined
based on the structure of the Group’s internal organisation, management requirements and internal reporting system after taking the materiality principle into account. Two or more operating segments may be aggregated into a single operating segment if the segments
have the similar economic characteristics and are same or similar in respect of the nature of each segment’s products and services, the nature of production processes, the types or classes of customers for the products and services, the methods used to distribute the
products or provide the services, and the nature of the regulatory environment.
Inter-segment revenues are measured on the basis of the actual transaction prices for such transactions for segment reporting. Segment accounting policies are consistent with those for the consolidated financial statements.
34 Significant accounting estimates and judgements
The preparation of the financial statements requires management to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates as well as underlying assumptions and uncertainties involved are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.
Except for accounting estimates relating to depreciation and amortisation of assets such as fixed assets and intangible assets (see Notes III.13 and 16) and provision for impairment of various types of assets (see Notes V.4, 6, 7, 8, 10, 14, 15, 16 and 17). Other significant accounting estimates are as follows:
(i)  Note V.19: Recognition of deferred tax assets;(ii)  Note V.30: Warranty provisions;
(iii) Note IX. –Fair value measurements of financial instruments; and(iv)Note XI: Share-based payments.
Significant judgements made by the Group in the application of accounting policies are as follows:
(i) Note VII. 1(1) –Disclosure of significant judgements and assumptions of control and exercising significant influence over other entities.
35. Changes in significant accounting policies
(1) Description of and reasons for changes in accounting policies
In 2022, the Group has adopted the revised accounting requirements and guidance under CAS newly issued by the Ministry of Finance (“MOF”) as follows:
- “Accounting for selling outputs that are produced before fixed assets are available for intended use or produced in the course of research and development”(“accounting for sales before intended use") in CAS Bulletin No.15 (Caikuai [2021] No.35);
- “Determining whether a contract is onerous”in CAS Bulletin No.15;
- Notice of Application Issues for Accounting Treatment of COVID-19-Related Rent Concessions (Caikuai [2022] No.13);
- “Accounting for the income tax consequences of dividends on financial instruments classified as equity instruments by the issuer”in CAS Bulletin No.16 (Caikuai [2022] No.31); and
- “Accounting for the modification of a share-based payment transaction that changes the classification of the transaction from cash-settled to equity-settled”in CAS Bulletin No.16(a) Main effects of adopting the above requirements and guidance(i) Accounting for sales before intended use
In accordance with CAS Bulletin No.15, the Group accounts for the proceeds and related cost arising from the sale of products or by-products produced before the fixed asset is available for its intended use and in the course of research and
development (“sales before intended use”) in accordance with CAS 14 –Revenue and CAS 1 –Inventories respectively, and recognises them in profit or loss for the current period. The net amount of proceeds from such sales before intended use less related costs is no longer offset against the cost of the fixed asset or research and development expenditure.
These provisions are effective from 1 January 2022. The Group has made
retrospective adjustments in accordance with these provisions for sales before intended use occurring between 1 January 2021 and the date of initial
The adoption of Bulletin No.15 does not have a significant effect on the financial position and financial performance of the Company.
(ii) “Determining whether a contract is onerous”
In accordance with CAS Bulletin No.15, when determining whether a contract is onerous, the Group includes in its estimated cost of fulfilling the contract the
amount of the incremental cost of fulfilling the contract and the allocation of other costs directly attributable to fulfilling the contract.
The adoption of Bulletin No.15 does not have a significant effect on the financial position and financial performance of the Group and the Company.
(iii) Caikuai [2022] No.13
The Accounting Treatment of COVID-19-Related Rent Concessions (Caikuai[2020] No.10) provides a practical expedient under certain conditions for rent concessions occurring as a direct consequence of the COVID-19 pandemic. According to the provisions of Caikuai [2022] No.13, the practical expedient of
Caikuai [2020] No.10 can continue to apply to eligible reduction in lease payments that are originally due after 30 June 2022.
The adoption of the above regulation does not have a significant effect on the financial position and financial performance of the Group and the Company.
(iv) Accounting for the income tax consequences of dividends on financial instruments classified as equity instruments by the issuer
In accordance with CAS Bulletin No.16, for financial instruments classified as
equity instruments (such as perpetual bonds classified as equity instruments, etc.) in accordance with the CAS No. 37 - Presentation and Disclosure of Financial
Instruments and other requirements, if the relevant dividend payments are
deductible for income tax purposes according to the relevant provisions of tax
policies, the Group (as the issuer) shall recognise the income tax consequences of dividends when it recognises a liability to pay a dividend. The Group shall
recognise the income tax consequences of dividends in (1) profit or loss, if those payments are distributions of profits generated from transactions or events
previously recognised in profits or loss; or (2) the items of owner's equity, if those payments are distributions of profits generated from the transactions or events previously recognised in the items of owner's equity.
The adoption of Bulletin No.16 does not have a significant effect on the financial position and financial performance of the Group and the Company.
(v) Accounting for the modification of a share-based payment transaction that
changes the classification of the transaction from cash-settled to equity-settled In accordance with CAS Bulletin No.16, if the terms and conditions of a cash- settled share-based payment transaction are modified such that it becomes an equity-settled share-based payment transaction, the Group shall, at the
modification date:
•measure the equity-settled share-based payment at its fair value as at the modification date and recognise in equity that fair value to the extent that the services have been rendered up to that date;
•derecognise the liability for the cash-settled share-based payment as at the modification date; and
•immediately recognise in profit or loss the difference between the carrying amount of the liability and the amount recognised in equity.
If the modification extends or shortens the vesting period, the Group applies the modified vesting period to the above accounting treatment.
(b) The effects on the financial statements
The effects on each of the line items in the consolidated balance sheet as at 31 December 2022 are as follows:
Increase/(decrease) in the line items for the year as a result of applying new
accounting policies
Assets:
Inventories 125,164,818 Fixed assets 370,255,620 Construction in progress (122,638,939)
Shareholders’equity:
Retained earnings 98,225,752 Capital reserve 112,771,892 Non-controlling interests 161,783,855 The effects on each of the line items in the consolidated income statement for the year ended 31 December 2022 are as follows: