Accounting Standards for foreign enterprises - res

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Accounting Standards for foreign enterprises - Comparison of research and development

With the further deepening of economic reform and the establishment of modern enterprise system, enterprises have become the mainstay of the market, production and operation of enterprises growing, while the enterprise risk and responsibility are gradually increased. On the other hand with the establishment of socialist market economic system and improvement of enterprises increasingly fierce competition between the forces businesses to operate from extensive to intensive management changes, corporate technology managers are increasingly aware of the importance of fair, competition by a simple expansion of production, reduce costs to the development of science and technology competition up, and all enterprises compete on new technologies and try new technology into productivity. Meanwhile,[link widoczny dla zalogowanych], the state to improve China's overall national strength, but also encourage enterprises to engage in research and development work, and give preferential policies from taxation. However, as research and development costs of the treatment is chaotic, then the research and development to develop appropriate accounting standards have become necessary. In this standard-setting process, drawing on scholars and experts of the International Accounting Standards and the United States, Britain, France, Japan, Hong Kong and other countries and regions, accounting standards, and taking into account China's and sub-sector accounting system and the relevant provisions of the financial system, and strive to standards and international practice, and on this basis, the need for China's national conditions, and accounting personnel to facilitate business operations. The guidelines include introduction, definitions, the composition of research and development costs, costs of validation and the matters should be disclosed, part of Annex VI. Introductory paragraph that the scope of the specification criteria - corporate research and development activity in the accounting and financial statements revealed. Definitions section was introduced on the definition of research and development, guidelines for the relevant personnel provide a basis for understanding. Cost of the composition of the section, listed the research and development will occur in a variety of charges. Segment recognized as an expense the cost of identification and to provide for the relevant accounting norms. Matters should be disclosed in the disclosure of the contents of the corresponding part of the provisions made. Supplementary guidelines for the interpretation of this paragraph and that the effective date. To compare Here we only China's costs (A) the scope of on international, U.S. and UK guidelines are not applicable to the provisions of its application in the mining industry, oil, gas, mineral exploration and development costs, but for this Other types of trades in the cost of research and development activities. Conducted under contract for another national standard requires research and development activities are slightly different. International standards require that the essence if the contract is: with the recommended research and development activities related to the risks and benefits transfer, or will be transferred to other companies, risks and benefits only the recipient can be accounted for by the cost of this Standard; if the contract The essence of the terms: with the recommended research and development activities of the risks and benefits transfer to other enterprises of the two factors. U.S. GAAP provides that So far, China does not yet exist for their commitment to R & D activities related to the benefits and risks of the situation, so in the formulation of guidelines is not involved. In addition, a description of guidelines The guidelines also point out that research and development activities do not include oil and gas industry, geological exploration and other special activities; enterprises of existing products, production lines, production processes are carried out outside technologies; Enterprise preliminary design phase of the research and development activities. (B) Comparison on the name of the definition of four criteria are for China, International, UK's China, International, United Kingdom in the UK respectively International, United Kingdom, the United States in the definition section of the guidelines to the Behind the definition of no such content, in the accounting treatment of business is difficult to judge which activities belong to the scope, operability is poor. (C) research and development costs on the composition of the contents of in research and development expenses of nations on the composition of the content object is not, generally, including equipment and facilities for R & D costs material costs, labor costs, contractual services, outsourcing costs and related intangible assets and other indirect costs, will not detail here to start. (Iv) research and development costs on the accounting treatment of international research and development expenses on the accounting treatment of two ways. A matching principle is based on research and development costs were incurred in the year will be recognized as an asset in the future with this cost by income related to the amortization again, this is called the deferred method (the deferral methld .) Another is that because research and development expenses and the future relationship between the period of earnings uncertainty, in accordance with the principle of prudence should be the current period of research and development costs occur as current expenses recognized the sales of this notation is called (the write - off method). Of research and development costs with the costs of the treatment, occurred in the costs charged to the profit or loss, if the business use of state special funds for research and development activities, should have taken place in research and development costs charged against earmarks. U.S. accounting standards are only allowed to expense, does not allow capitalization. Cost of the study of international accounting standards in its place should be recognized as an expense during the period, and in a subsequent period should not be recognized as an asset. Development costs only under certain conditions met before recognized as an asset, or recognized as an expense; initially recognized as an expense of the development costs, in a subsequent period should not be recognized as an asset. Assets is recognized when: ; (3) business plan production, sale or use of such products or processes; (4) The existence of a market product or process, if it is used for content rather than sold, its usefulness to the enterprise can be confirmed; there is enough resources, or can prove that such resources available to complete this project and its marketing, or the use of the product or process. future economic benefits, net of the amount recovered for further development costs, related production costs and market the product directly in the sale occurred after the costs and administrative expenses, net. provisions of the United Kingdom SSAPB , R & D costs of consumption of fixed assets should be capitalized and SSAPB12: Accounting for Depreciation (depreciation accounting) for depreciation. All other research costs through profit or loss. The accounting treatment of development costs have two options, either choose which method should be consistent all the development costs. One is recorded sales policy, all development costs through profit or loss. One is deferred policy to meet all of the following criteria capitalization of development costs, Zhen remaining profit or loss. These criteria are: (1) The project must be clearly defined. (2) the costs will be able to individually identified. (3) the following aspects of the project must be reasonably positive. A, the technical feasibility. B, commercial viability, related to market conditions (including competition), the public's view, consumer or environmental legislation. (4) The project is reasonably expected future revenues must exceed all of the deferred development fee, plus costs of further development and related product costs, sales expenses and management fees and. (5) must be given adequate resources, or could reasonably be expected to get this kind of resources to complete this project, do not forget the capital required. (E) of amortization on development costs and loss due, the U.S. standards development costs will be expensed. Guidelines and does not involve loss of part of the amortization of the cost. The International, the UK guidelines require compliance with conditions of development costs capitalized to the cost must be amortized and loss provisions of the accounting treatment. Stipulated in the United Kingdom SSAPB development costs are deferred to when the next period must be at the beginning of commercial use to immediately amortized. Also clear that international standards, due to the presence of uncertainty, the amortization period of not more than 5 years. If the result is reduced development costs write-off or the issues no longer exist, while there is convincing evidence that new circumstances and issues that will continue for the foreseeable future, should be offset against the amount written off or reversed. (VI) on the matter should be disclosed guidelines as adopted by the different accounting treatment is inconsistent, so the matter should be disclosed are also different. China demands in the financial statements included in profit or loss disclosed in the notes of research and development costs. Offset against income of U.S. demands reveal the total cost of research and development, which reflects the income statement in the body, but also in the notes to financial statements. Because government-run companies to the deferred research and development costs, should be added to its reveal. Reveals Britain's SSAP13 required to research and development costs to the accounting policies, deferred development costs account details and balance sheets in the Only to public companies, banks, insurance companies and large private companies to ask for, respectively, and the amortization period of the current period through profit or loss occurred, and research and development expenses were revealed. International accounting standards reveal the contents of the most comprehensive to provide financial statements should reveal: (1) corporate research and development costs of the accounting policies adopted; ( 2) recognized as an expense in the current research and development costs amount; (3) the amortization method used; (4) the amortization period used and the amortization rate ; (5) at the beginning and end of the unamortized balance of the control of development costs, should reflect: A, according to paragraph 17 of the development costs recognized as assets; B, under paragraph 21 or paragraph 25 of the development costs recognized as an expense; C, allocated to other asset accounts of development costs; D, according to paragraph 27 of the reversal of development costs.