会计账目调节指导资料Guideline on Reconciliation

Accounting ServicesGuideline on Reconciliation1. Objective32. General Requirement33. Specific Requirement44. Appendix111. Objective The purpose of this document is: To meet the requirement of Sarbanes Oxley Act and enhance internal control on financial reporting; To provide specific guidance on how to prepare reconciliations which are designed to prevent and detect misstatement of financial reporting.2. General Requirement All balance sheet accounts including USGAAP account, L account and T account should be properly reconciled; Each account should be assigned to a specific person who will be responsible for the reconciliation of this account; All reconciliation should be performed monthly unless otherwise stated; All reconciliations should be properly signed by the responsible person and his/her group leader/direct supervisor; The deadline for submitting reconciliation is U+10 every month. There may be some requirements not suitable for certain JVs as there will be slight difference in the usage of account number between different companies, please contact SLC AS in such cases.3. Specific Requirement All asset accounts should be shown with debit balance and all liability accounts should be shown with credit balance. L account is only used to record the difference between USGAAP and PRC GAAP; T account is only used to record the difference between PRC GAAP and Tax Law & Regulation The relevant result of different modules of SAP should be reconciled with each other and there should be no difference shown. General check points are summarized as below for different category of balance sheet items ( Investment, tax and some special accounts are not included below, for details of those accounts, please refer to the appendix):A: Fixed asset:A-1: Ensure that the items booked properly meet the definition of relevant fixed asset and are properly recorded under correct asset class according to Chart of Account; A-2: Ensure that fixed assets are not overstated because of the inclusion of items that should be expensed through the income statement rather than capitalized in the balance sheet.A-3: Depreciation should be checked to asset registers (if any) for the accuracy of calculations and the reasonableness of the depreciation rates applied;A-4: Ensure the movement of depreciation corresponds to that of corresponding acquisition value (e.g., depreciation value should increase as a result of increase of acquisition value); Fully depreciated asset should be checked specifically to ensure it is still in use and in good working condition, otherwise it should be written off;A-5: Ensure FA impairment (normally booked under account 09XXXX1505) is properly calculated and sufficient supporting documentation is provided; A-6: Review for Fixed asset impairment should have been performed at least annually, otherwise email/letter should be sent to relevant responsible person for reminding; A-7: There should be no difference between FI and Asset module; B: Inventory B-1: The balance of accounting records (e.g. FI account balance) should agree with that of relevant inventory records (e.g. OCC report of logistic module and CO PA report, in case SAP logistic module is not in use, other forms of inventory records such as excel sheet should be provided );B-2: Any difference between accounting records and inventory records should be investigated and reasonable explanation should be obtained;C: Receivable/payable/down payment received or paid:C-1: The total balance of sub-ledger account should agree with that of corresponding general ledger account; C-2: Open item clearing should be properly done in time (e.g. only really open item is shown in open item report); C-3: Clearing against relevant receivable / payable / down payment account should be properly done and ensure that these accounts are not overstated;C-4: No credit balance (in case of receivable accounts & down payment paid) / debit balance (in case of payable accounts & down payment received) is shown in open item report except as a result of partial clearing; C-5: Account balance at profit center level is reasonable C-6: Reminder should be sent to BU for overdue open items pending for more than 1 year or overdue open items with significant balance, relevant explanation or written confirmation from BU should be obtained and properly filed; in case no feedback is received from BU, notes should be made in the reconciliation;D: Cash/bank:D-1: The result of cash count should agree with the balance of accounting records (FI account balance), any difference between should be investigated and reasonable explanation should be obtained and noted down in reconciliation; D-2: Cash count sheet should be signed by both cashier and cash auditor who supervises cash count; D-3: The balance of accounting records (e.g. FI account balance should agree with that of bank statement; D-4: Any difference between accounting records and bank statement should be investigated and reasonable explanation should be obtained and noted down for outstanding items listed in reconciliation; ;E: Prepaid expense:E-1: A schedule of prepaid expense should be obtained and checked for arithmetical accuracy and to ensure the prepaid expense is amortized during the correct period, not start earlier or end later than the scheduled date, F: Equity:F-1: Ensure the calculation of fund/reserve is in accordance with relevant regulation and is not in breach of any regulatory requirements;F-2: The balance of accounting records should agree with that shown in audit report and/or stated in board meeting minutes (if any);G: Valuation allowance on accounts receivable:G-1: Ensure the base for calculating rating related VA is correct (the base for calculating individual allowance and country related allowance should be excluded from it); G-2: Calculation of valuation allowance should be checked for arithmetical accuracy and ensure it is calculated in accordance with correct rate pre-determined;G-3: Supporting documentation (e.g. detailed list for calculation) for individual valuation allowance should be provided by BU which is signed by relevant responsible person;H: Inventory reserve / accrual / valuation allowance on :H-1: Ensure that expenses booked for inventory reserve/ Accrual / valuation allowance properly meet the relevant definition (i.e. non-related expenses should not be included);H-2: Different category of accrual/reserve should be properly recorded under relevant account according to Chart of account; H-3: Accrual should not be made against consolidated affiliated companies;H-4: Written confirmation of relevant account balance should be obtained from BU responsible staff / commercial manager according to signature mandate;H-5: It is the responsibility of relevant BU to ensure the accuracy of calculation of inventory reserve / accrual;I: CP related accounts:I-1: Written confirmation of relevant account balance should be obtained from CP responsible staff;I-2: It is the responsibility of CP to ensure the accuracy of calculation of relevant items;J: L account / T account /interim account:J-1: Account balance should agree with that of relevant USGAAP account;J-2: Account balance should agree with that of relevant USGAAP account with opposite sign;J-3: Account balance should agree with that of relevant L account;J-4: Account balance should agree with that of relevant L account with opposite sign;J-5: Account balance should be zero; K: Financial receivable from SFSL K-1: Account balance should be in agreement with that of SFSL statement; Attachment Required:a) FI account balance report of relevant account;b) FI account balance report of relevant account with confirmation signature of CP responsible staff;c) FI account balance of relevant account at BU level, with the confirmation signature of BUs responsible staff or commercial manager;d) Open item report with total balance and profit center balance (where necessary) shown ;e) Reminder to BU where necessary;f) Relevant explanation from BU where necessary;g) FI trial balance report of relevant USGAAP account and L1 account with total balance of zero shown; h) FI trial balance report of relevant USGAAP account and T1 account with total balance of zero shown; i) FI trial balance report of relevant USGAAP account and L account;j) FI trial balance report of relevant USGAAP account and T account;k) Relevant supporting documentation;l) Relevant calculation sheet;m) Relevant board meeting minutes;n) Inventory records (e.g. OCC report, CO PA report, excel sheet of inventory records in case there is logistic module is not in use);o) SFSL statement;p) Relevant ICC statement;q) Year end audit report;4. Appendixw Fixed Assetw Investmentw Inventoryw Account receivable/other receivable/down payment received or paidw Cash/bankw Prepaid expensew Equityw Accrued liabilityw Account payable/other payablew VAT/BTw Deferred tax/current taxw Othersw Fixed AssetAccount NumberCheck pointsAttachment Required0 - 0999999999 (except 089* and 0821001603)A-1; A-2; A-3; A-4; A-5; A-6; A-7; ( 041- land and equivalent rights to real property; 043 - buildings; 051 - machinery; 053 - utility systems; 055 - testing stations; 058 - other techincal equipment; 061 - vehicle fleet; 062 - desktop systems and other office communication equipment; 063 - other data processing, communication and safty and security systems; 064 - automation systems; 065 - standard test equipment; 066 - special tools and special test equipment; 067 - standard tools and standard test tools; 068 - other plant and office equipment;) a); Asset report printed out from asset module; FI-Asset reconciliation report; supporting documents for impairment (if any); reminder to relevant responsible person in case no review is performed for impairment;L0 - L089999999 (Laccount with the last fifth digit not shown as 1)J-1; (These account are used to record the acquisition value of fixed assets under PRC GAAP)i)L090000000 - L099999999 (Laccount with the last fifth digit not shown as 1)For the time being, GAAP difference between PRC GAAP and USGAAP only exists for the depreciation of those items which belong to deferred assets under PRC GAAP, but should be booked under fixed asset under USGGAP, all these items should be booked under fixed asset account with last four digits shown as 1901, and these L accounts are used to record the accumulated amortization value of deferred asset according to PRC GAAP; the balance of L account should be smaller than that of corresponding USGAAP account because the value is amortized over 5 years under PRC GAAP (the same as that required by Tax law according to management judgment), but it is depreciated under USGAAP according to the period indicated in contract which is normally less than 5 years;i)L0 - L099999999 (L1 account with the last fifth digit shown as 1)J-2; (These accounts are used to reverse the balance of USGAAP account, normally no GAAP difference)g)Account NumberCheck pointsAttachment RequiredT0 - T089999999 (T account with the last fifth digit not shown as 1)J-1; (These account are used to record the acquisition value of fixed assets according to tax regulation, normally no GAAP difference)j)T090000000 - T099999999 (T account with the last fifth digit not shown as 1)GAAP difference exists between PRC GAAP and PRC Tax law and regulation for fixed asset depreciation: 10% residual value is required according to Tax regulation but not under PRC GAAP, and depreciation period is also different; these T accounts are used to record the accumulated depreciation of fixed asset according to tax regulation; normally the balance of T account should be smaller than that of corresponding US GAAP account; j)T0 - T099999999 (T1 account with the last fifth digit shown as 1) J-2; (These accounts are used to reverse the balance of USGAAP account)h)089XXXXXXXJ-5; (interim account)a)w InvestmentAccount NumberCheck pointsAttachment Required1010001401Investment in affiliated/associated companies - ensure that value of investment is correctly booked (cost method is used under USGAAP); only investment on affiliated/associated companies is booked under this account; the total balance of supporting schedule should agree with that of FI account balance;a); supporting excel sheet with detailed investment information shown (trading partner, investee name, share percentage, investment balance per trading partner etc.);L101001401 L101101401 L101201401 L101301401 L101401401valuation of investment in affiliated companies with equity method under PRC GAAP - L101001401 for reversal of L101201401, the balance of these two accounts should agree but with opposite sign; L101011401? ; L101101401 - for JV result picking up; L101201401 - for recording goodwill resulted from investment to JV; L101301401 - for recording JV HBI goodwill amortization; L101401401 - for recording JV equity special movement (e.g. donation received by JV), the balance of this account should agree with that of L3000403111 with opposite sign; only investment with no less than 20% share and SLC with significant impact on JV should be recorded with equity method; the total balance of 101, L101001401, L101101401, L101401401 and consolidation difference should agree with corresponding JVs net asset multipled by share percentage of SLC; the movement of L101 should agree with the total balance of calculation sheet;a); supporting excel sheet with detailed information (e.g. JVs P&L result, goodwill, donation received, SLCs share percentage etc.); 1240001401Equity income/loss from associated companies - only equity income/loss from those JVs on which SLC has less than 50% investment and with significant impact is recorded under this account; to ensure the calculation result is correct; a); k);L124011401This account is used to reverse account 1240001401; the balance of account 1240001401 should be equal to that of L124011401 with opposite sign;g)Account NumberCheck pointsAttachment Required1901001421Valuation allowance on investments in non - consolidated affiliated companies - ensure only VA on investment on non-consolidated affiliated is recorded under this account; to ensure the allowance is valued correctly and review for VA should be done at least once a year; Reminder should be sent to BU in case no review is performed;a); email from related BU/hard copy with signature; reminder sent to BU in case no review is performed;L190101421 L190111421Normally there is no difference between USGAAP and PRC GAAP so there should be no booking under these two accounts;-T190101421J-2; (This account is used to reverse the balance of account 1901001421 bec