Chapter 1 General Principles
Article 1 To standardize the accounting and financial management of the company's various assets, protect the legitimate rights and interests of shareholders and creditors, and accurately measure the value of the company's various assets, ensuring the objectivity and truthfulness of the financial situation, this system is formulated in accordance with the "Accounting Standards for Business Enterprises" and the "Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange" and other relevant regulations.
Article 2 This system applies to the accrual of asset impairment provisions, the recognition of asset losses, and the management of write-offs for the company and its wholly-owned and controlled subsidiaries.
Article 3 Asset impairment refers to the situation where the net present value of future cash flows, net realizable value, or recoverable amount of an asset (or asset group, hereinafter referred to as the same) is lower than its carrying amount.
Article 4 The company inspects and tests all assets on each balance sheet date to determine if there are any signs of impairment. If there is objective evidence that an asset has been impaired, impairment provisions shall be made according to the subsequent methods.
Article 5 The scope of asset impairment provisions includes financial assets, inventory, and long-term assets. Financial assets include receivables and financial assets other than those measured at fair value with changes recognized in current profit or loss. Long-term assets include long-term equity investments, investment properties, fixed assets, construction in progress, intangible assets, goodwill, and other long-term assets.