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Accounting for impairment of long-term investment in long-term investment deal

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					Accounting for impairment of long-term investment in long-term investment
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 long-term investment impairment accounting treatment
 under the "Investment" provides: "enterprises should the book value of long-term
investments periodically checks one by one. If the market price continued to fall as
investment units or changes in operating conditions causes the recoverable amount
and the carrying amount of investment should be recoverable amount and the
difference between the book value of long-term investment, the first offset against
capital surplus of the investment to prepare project, less than the difference between
offset investment losses recognized as current period. has confirmed the value of the
loss of long-term investment to restore it, should be recognized in the original
investment back within the amount of loss. "This provision is easier to understand the
surface, but specific accounting treatment process will encounter many different
situations. To this end, the author from a different perspective on impairment of
long-term investment business analysis, and the corresponding accounting treatment.

 1, long-term investment is impaired long-term investment impairment provision for
the accounting treatment

  "Investment" guide states: "The impairment of long-term investment, should be
calculated on the basis to individual investment and provision for impairment is
difficult to determine equipment, first of all to offset the original capital surplus of the
investment project preparation, less than the difference between offset investment
losses recognized as long-term. "Under this provision, reduced occurrence of
long-term investment value should be provision for the impairment accounting
treatment mainly in the following three situations:

 1, if the long-term investment capital reserve to prepare projects, and their should be
provision for impairment of long-term investments number is less than or equal to the
original number of items to prepare the capital reserve, will be provided for
impairment of all of the investment to offset the original capital reserve to prepare the
project, the accounting entries to:

 by : capital surplus (the number should be provided for impairment)
 Loan: Long-term investment impairment (impairment loss should be raised a few)

 2, if the long-term investment capital surplus preparing the project, and its should be
provision for impairment of long-term investment greater than the number of the
original capital reserve to prepare the project number, the number will be provided for
impairment of investment in the first offset against capital surplus of the original
preparation of the project, enough to offset the the difference recognized as the
current investment losses, the accounting entries to:
 by: Capital surplus (the original capital reserve to prepare a few)
 investment income (the number should be provided for impairment of a the original
capital reserve to prepare several)
 Loan: Long-term investment impairment (impairment loss should be mentioned a
few)

 3, if the long-term investments to prepare the original non-capital reserve project
will provide long-term investments should be the number of total impairment loss
recognized as current period investment, the accounting entries to:

 by: Investment income (the number should be provided for impairment)
 Loan: Long-term Investment impairment (impairment should mention a few)

 2, has confirmed the loss of long-term investment to restore the value of another
accounting

 "Investment" provides: " has confirmed the loss of long-term investment value has
been restored, should be identified in the original investment back within the amount
of loss. "Meanwhile, the Ministry of Finance, Accounting Zi [1998] 66 Man" on the
implementation of specific accounting standards and <Limited accounting
system > Questions about accounting, "which stipulated:" 'has been identified
within the amount of investment losses back', refers to the 'long-term investment
impairment' subjects, there is a balance of credit. If a loss is recognized to restore
long-term investment value of another should be first back to the original impairment
through profit or loss, the difference and then restore the original offset of the capital
reserve to prepare the project. "in accordance with the above requirements, have been
confirmed for the loss of another long-term investment value of the specific
accounting treatment to be resumed the following six main kinds of situations:

  1, if the loss has been confirmed that the long-term investment value of recovery is
less than the amount of "impairment of long-term investment," subject credit there is a
balance, and less than or equal to the original impairment through profit or loss , will
be the restoration of the original amount of total profit or loss as a reversal of the
impairment, the accounting entries to:

 by: long-term investment impairment (recovery amount)
 Loan: Investment income (recovery amount)

  2, if the loss has been confirmed that the long-term investment value of recovery is
less than the amount of "impairment of long-term investment," subject credit there is a
balance, while the impairment is greater than the original through profit or loss , the
first original full reversal of the impairment charged to the profit and loss, the
difference and then restore the original offset of the capital reserve to prepare the
project, the accounting entries to:
 by: impairment of long-term investments ( recovery amount)
 Loan: Investment income (profit or loss of impairment of the original number)
 capital surplus (the amount of recovery - the original impairment loss included a
few)

  3, If you have confirmed the long-term investment value of the loss recovery amount
is greater than or equal to "impairment of long-term investment," subject credit there
is a balance, and the original preparation of the investment capital reserve projects
will be included in the original and the original offset the impairment loss the amount
of capital reserves to prepare all the back, the accounting entries to:

 by: impairment of long-term investments (there is a credit balance of the subjects)
 Loan: Investment income (the original account through profit or loss impairment)
 capital surplus (the original capital reserve ready to offset the impairment)

 4, if the loss has been confirmed to restore long-term investment value is greater
than or equal to the amount of "long-term investment impairment, "there is a credit
balance of subjects, and the original preparation of the investment without capital
reserve projects, according to the subject's credit there is a balance, impairment of the
original full back through profit or loss, the accounting entries for the :

 by: impairment of long-term investments (there is a credit balance of the subjects)
 Loan: Investment income (profit or loss of the original impairment)

 5 If the original mention of the long-term investment impairment loss is not included,
and all offset the investment of capital surplus to prepare the project, and the
restoration of the amount is less than the "impairment of long-term investment,"
subject credit there is a balance of powers, restore the original amount back to offset
the capital reserve to prepare the project, the accounting entries to:

 by: long-term investment impairment (recovery amount)
 loans: capital surplus (the amount of recovery )

 6, if the impairment of long-term investment of the original not to mention the profit
and loss, and all offset the investment of capital surplus to prepare the project, and the
recovery amount is greater than or equal to its "long-term investment by value of
preparation, "there is a credit balance of subjects, according to" impairment of
long-term investment, "there is a balance of all credit courses back to the original
offset of the capital reserve to prepare the project, the accounting entries to:

 by : impairment of long-term investments (there is a credit balance of the subjects)
 loans: capital surplus (the subject there is a balance of credit)
 3, has confirmed the loss of disposal of long-term investment value of fashion did
not resume accounting

  has confirmed the value of the loss of disposal of long-term investment not
recovered, is in the disposal of long-term investment, "impairment of long-term
investment," subject is still a credit balance. Ministry of Finance Accounting Word
[1998] 66 Man "on the implementation of specific accounting standards and
<Limited accounting system> Questions about accounting," which
stipulated: "If the book value of long-term investment until the disposal has not yet
recovered, revenue should be disposed of long-term investment greater than the
difference between the book value, first of all to restore the original offset of the
capital reserve to prepare projects; such as disposal of long-term investment income
greater than the book value of the partial restoration of the original offset of the
capital reserve balance to prepare items there, and then confirmed disposition of
proceeds. "Under this provision, has confirmed the loss of the long-term investment
value of disposal has not yet recovered the following seven major accounting
treatment of the case:


 1, if the long-term investment no capital reserve to prepare the project, which
included the original mention all of the profit and loss impairment and disposal of
long-term investment income is greater than its book value, it will dispose of
long-term investment income greater than the difference between the carrying amount
of revenue recognized for the disposal of its accounting entries for the (in this, to
name just part of the accounting entries, the same below):

 by: bank deposits (disposal of income)
 long-term investment impairment (credit there is a balance of the subjects )
 Loan: Long-term investments (there is a debit balance of the subjects)
 investment income (income of a disposal of the investment book value)

 2,
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