企业会计准则长期股权投资英文财政部.doc

Accounting Standard for Business Enterprises No.2Long-term Equity InvestmentsChapter 1 General ProvisionsArticle 1 This Standard is formulated in accordance with the “Accounting Standard for Business EnterprisesBasic Standard” for the purpose of prescribing the recognition and measurement of long-term equity investments and the disclosure of related information.Article 2 The following items are dealt with under other appropriate Accounting Standards:(a)translation of foreign currency long-term equity investments, which is dealt with under“Accounting Standard for Business Enterprises No.19Foreign Currency Translation”.(b)long-term equityinvestments not covered by this Standard, which are dealt with under “Accounting Standard for Business Enterprises No.22Financial Instruments:Recognition and Measurement”.Chapter 2 Initial MeasurementArticle 3 The initial investment cost of a long-term equity investment acquired through a business combination shall be determined as follows:(a)for a business combination involving enterprises under common control, if the consideration of thecombination is satisfied by paying cash, transfer of non-cash assets or assumption of liabilities, the initial investment cost of the long-term equity investment shall be the absorbing partys share of the owners equity of the party being absorbed at combination date. The different between the initial investment cost and the carrying amount of cash paid, non-cash assets transferred and liabilities assumed shall be adjusted to capital reserve. If the balance of capital reserve is not sufficient, any excess shall be adjusted to retained earnings.If the consideration of the combination is satisfied by the issue of equity securities, the initial investment cost of the long-term equity investment shall be the absorbing partys share of the owners equity of the party being absorbed at combination date. The aggregate face value of the shares issued shall be accounted for as sharecapital. The difference between the initial investment cost and the aggregate face value of the shares issued shall be adjusted to capital reserve. If the balance of capital reserve is not sufficient, any excess shall be adjusted to retained earnings.(b)for a business combination not involving enterprises under common control, the initial investment cost of the long-term equity investment acquired shall be the cost of acquisition determined in accordance with “Accounting Standard for Business Enterprises No.20Business Combinations”.Article 4 The initial investment cost of a long-term equity investment acquired otherwise than through a business combination shall be determined as follows:(a)for a long-term equity investment acquired by paying cash, the initial investment cost shall be the actual purchase price has been paid. Initial investment cost also includes those costs, taxes and other necessary expenditures directly attributable to the acquisition of the long-term equity investment. (b)for a long-term equity investment acquired by the issue of equity securities, the initial investment cost shall be the fair value of the securities issued.(c)for a long-term equity investment contributed by an investor, the initial investment cost shall be the value stipulated in the investment contract or agreement, except where the value stipulated in the contrct or agreement is not fair.(d)for a long-term equity investment acquired through an exchange of non-Monetary assets, the initial investment cost shall be determined in accordance with “Accounting Standard for Business Enterprises No.7Exchange of Non-Monetary Assets”. (e)for a long-term equity investmentacquired through a debt restructuring transaction, the initial investment cost shall be determined in accordance with “Accounting Standard for Business Enterprises No.12Debt Restructurings”.Chapter 3 Subsequent MeasurementArticle 5 The following long-term equity investments shall be accounted for using the cost method in accordance with the requirements of Article 7 of this Standard:(a)a long-term equity investment where the investing enterprise can exercise control over the investee.Control is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its operating activities. Where an investing enterprise is able to exercise control over the investee, the investee is a subsidiary of the investing enterprise and shall be included in the consolidated financial statements of the investing enterprise.An investing enterprise shall account for a long-term equity investment in a subsidiary using the cost method as prescribed in this Standard, and then make appropriate adjustments using the equity method when preparing the consolidated financial statements.(b)a long-term equity investment where the investing enterprise does not have joint control or significant influence over the investee, the investment is not quoted in an active market and its fair value cannot be reliably measured.Joint control is the contractually agreed sharing of control over an economic activity, and exists only when the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control. Where an investing enterprise can exercise joint control over the investee, the investee is its jointly controlled enterprise.Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. Where an invesing enterprise can exercise significant influence over the investee, the investee is its associate.Article 6 When determining whether an investing enterprise can exercise control or significant influence over an investee, the effect of potential voting rights(for example, warrants and convertible debts)held by the investing enterprise or other parties that are currently exercisable or convertible shall be considered.Article 7 Under the cost method, a long-term equity investment shall be measured at its initial investment cost. When additional investment is made or the investment is recouped, the cost of the long-term equity investment shall be adjusted accordingly. Cash dividends or profit distributions declared by the investee shall be recognized as investment income in the currentperiod. Howere, investment income recognized by the investing enterprise shall be limited to the amount distributed to it out of accumulated net profits of the investee arising after the investment was made. Any cash dividends or distributions received in excess of this amount shall be treated as a recovery of initial investment cost.Article 8 where an investing enterprise can exercise joint control or significant influence over the investee, a long-term equity investment shall be accounted for using the equity method in accordance with the requirement of Aticle 9 to 13 of this Standard.Article 9 Where the initial investment cost of a long-term equity investment exceeds the investing enterprises interest in the fair values of the investees identifiable net assets at the acquisition date, no adjustment shall be made to the initial investment cost. Where the initial investment cost is less than the investing enterprisesinterest in the fair value of the investees identifiable net assets at the acquisition date, the difference shall be charged to profit or loss for the current period, and the cost of the long-term equity investment shall be adjusted accordingly.The fair values of the investees identifiable net assets shall be determined with reference to the requirement of “Accounting Standard for Business Enterprise No.20Business Combinations”.Article 10 after the investing enterprise has acquired a long-term equity investment, it shall recognize its share of the net profits or losses made by the investee as investment income of losses, and adjust the carrying amount of the investment accordingly. The carrying amount of the investment shall be reduced by the portion of any profit distributions or cash dividends declared by the investee that is attributed to the investing enterprise.Article 11 T