Discussion On Merger Of Assets Management Plan Accounting

With the growth of wealth, China is ushering in the era of "big capital management". Public offering and private equity fund companies, securities companies, trust companies and Futures Company can issue financial products after obtaining relevant qualifications, and receive management fees and performance rewards. According to the accounting standards, it will involve the question of whether consolidated financial statements need to be consolidated.

As an example, this issue is discussed from a practical point of view.

"Accounting standards for Enterprises No. thirty-third - consolidated financial statements" stipulates: "the consolidated scope of consolidated financial statements should be determined on the basis of control.

Control means that the investor has the power to be invested and enjoys variable returns by participating in the related activities of the investor, and has the ability to use the power of the invested party to affect the amount of return.

Judging from the above criteria, the three points are indispensable, namely, having the power to the invested party, having variable returns, and having the ability to influence the amount of repayment.

Control must have substantive power, there is no obstacle to exercise, and specific provisions are stipulated in the contract terms. In practice, voting rights and potential voting rights need to be considered together, and the ability to exercise power effectively includes appointment, removal, nomination and veto.

Managers should take account of all relevant matters and circumstances to decide whether or not to control financial products.

Once changes in relevant facts and circumstances lead to changes in the relevant elements involved in the definition of control, the manager shall reassess.

Even if there is no absolute majority voting right, there may be a control relationship. The relative proportions and decentralization of other stakeholders' voting rights need to be considered, considering the previous voting mode.

The asset manager must assess the scope of his decision-making power. The factors related to the assessment include: the relevant regulatory agreements and the activities permitted by the law, and whether these activities belong to the related activities of the asset management plan; the autonomy of the asset managers in leading the related activities; and the purposes and provisions for the establishment of the asset management plan.

The remuneration of the investor varies with the performance of the investor, indicating that the presence of variable payback can be positive or negative, or both.

The remuneration of the asset manager includes, but is not limited to, asset management fees, dividends, fixed or floating performance rewards, etc.

According to the relevant criteria, the standard in practice is that the total income of the asset manager is less than 20% of the current yield of the invested product, and it does not need to merge; it can be merged between 20% and 30%; when more than 30%, it must be merged.

The specific formula is as follows: correlation ratio = (management fee + performance reward + self investment part of the financial products in the corresponding profit and loss) / financial products current profit and loss x100%.

At the beginning of the establishment of financial products, we need to judge whether we need it according to the contract.

It is necessary to consider two parameters, that is, the expected yield of the product, and the proportion of the share of the investment in the total share of the product.

Both the fixed income and the floating income need to be considered.

Large fluctuations in the performance of asset management plans may lead to significant changes in magnitude, resulting in inconsistent results of the combined judgement.

According to the above principles, the following steps should be taken to deal with the merger.

The first step is that the asset manager participates in the information management products with his own capital, and the consolidated accounting statements need to be consolidated. The asset manager and the profit and loss items of the asset management products are set off internally.

Offsetting the management expenses of asset management products and the management fees of asset managers.

Borrowing - Commission and commission income - asset management business income (asset manager); Loan - management expenses (asset management products).

Offset the performance reward expenses of asset management products and the performance remuneration income of asset managers.

Borrowing - Commission and commission income - asset management business income (asset manager); loan performance reward expenditure (asset management product).

Because asset management performance compensation is a floating profit and loss before liquidation, it can not meet the conditions of revenue recognition in accounting standards. When merging, it should pay attention to the difference between asset management product recognition performance reward payment and asset manager's recognition of performance reward income point. When one party has processed accounts and the other party has not done account processing, the processed accounts must be sterilized at the time of merger.

Offsetting the management and management fees of the asset management plan and the receivable management fees of the asset managers.

Borrow - to meet management fees (asset management products); Loan - receivable Commission (asset manager).

The second step: asset managers reclassify investment products to long-term equity investments.

In practical operations, the asset managers usually account for the financial products incorporating the scope of the merger in the initial financial investment, generally in the sale of financial assets, holding to maturity investments, measuring the financial assets according to the fair value and the changes in the profits and losses of the current period, and international standards require enterprises to uniformly classify and calculate all the merger entities, and the general listed companies are classified into long-term equity investments.

Need to

The principal and profit and loss are reclassified.

Borrowing - long term equity investment; Loan - for sale of financial assets (or other subjects).

Profit and loss reflected in capital surplus should also be pferred to long-term equity investment.

The third step: the owner's equity of the asset management product is offset by the long-term equity investment of the asset manager.

From the perspective of consolidation, the net share held by non asset managers is recognized as a liability (measured by fair value and financial liabilities measured by profit or loss or measured at amortized cost) at the consolidated statement level.

The secondary share of the classified products needs to be considered more carefully (according to the contract stipulations and the net value of the base share, the net value of priority and sub net is counted as financial liabilities).

The fourth step: the offset of the income distribution of the information management plan.

After the consolidated statements, the share of asset management products purchased by the asset manager is completely offset, and the book only reflects the purchase of other investors.

The assets management products invested by other investors are reflected in the balance sheet as an external liability, and the relevant gains and losses are reflected in the profit and loss account.

Considering the operation mode of the asset management plan, the management fees paid by other investors at the general merger level are reflected in the cash inflow of business activities, and the funds for other investors to purchase financial products are embodied in the cash inflow of fund-raising activities.

In the notes to the report, we need to disclose the information about the total assets of the structured subjects (asset management products) and the initial investment amount of the asset managers, and we need to disclose the main situations of the financial liabilities measured and measured in the fair value and the changes are included in the profits and losses.

For more information, please pay attention to the world clothing shoes and hats net report.