Securities Code: 002045 Securities Abbreviation: Guoguang Electric Code: 2026-27
The Company and the entire Board of Directors guarantee the truthfulness, accuracy, and completeness of the information disclosed, and that there are no false records, misleading statements, or material omissions.
Guoguang Electric Corporation (hereinafter referred to as the "Company") has made corresponding changes to its accounting policies in accordance with the relevant notices issued by the Ministry of Finance of the People's Republic of China (hereinafter referred to as the "Ministry of Finance"). The specific changes are as follows:
I. Overview of the Current Accounting Policy Change
(I) Reason and Time of Accounting Policy Change
On December 5, 2025, the Ministry of Finance issued "Enterprise Accounting Standards Interpretation No. 19" (Cai Kuai [2025] No. 32), which stipulates provisions regarding "Accounting Treatment of Compensatory Assets in Business Combinations Not Under Common Control," "Accounting Treatment of Related Capital Reserves When Disposing of Subsidiaries Acquired Through Business Combinations Under Common Control," "Termination of Recognition of Financial Liabilities Settled Through Electronic Payment Systems," "Assessment of the Characteristics of Contractual Cash Flows of Financial Assets and Related Disclosures," and "Disclosure of Equity Instruments Designated at Fair Value Through Other Comprehensive Income." These accounting standards interpretations will be effective from January 1, 2026.
(II) Accounting Policies Previously Adopted by the Company
Prior to this accounting policy change, the Company followed the "Basic Standards for Enterprise Accounting," various specific accounting standards, application guidelines for enterprise accounting standards, announcements on interpretations of enterprise accounting standards, and other relevant regulations issued by the Ministry of Finance.
(III) Accounting Policies Adopted by the Company After the Change
Following this accounting policy change, the Company will comply with the requirements of "Enterprise Accounting Standards Interpretation No. 19" issued by the Ministry of Finance. Except for the aforementioned accounting policy changes, all other aspects will continue to be governed by the "Basic Standards for Enterprise Accounting," various specific accounting standards, application guidelines for enterprise accounting standards, announcements on interpretations of enterprise accounting standards, and other relevant regulations previously issued by the Ministry of Finance.
(IV) Main Contents of the Current Accounting Policy Change
In accordance with the requirements of "Enterprise Accounting Standards Interpretation No. 19," the main contents of the accounting policy change are as follows:
(1) Accounting Treatment of Compensatory Assets in Business Combinations Not Under Common Control
In a business combination not under common control, the seller and the buyer may enter into a contract agreement where the seller provides compensation to the buyer for certain contingent matters of the acquired party, or for certain uncertain outcomes of specific assets or liabilities, or for losses arising from such matters exceeding an agreed amount. For example, the seller compensates the buyer for a contingent liability of the acquired party or for losses arising from such liability exceeding an agreed amount.
- Recognition and Measurement of Compensatory Assets at the Consolidated Financial Statement Level.
① Recognition and Initial Measurement of Compensatory Assets. The buyer shall recognize the compensatory asset simultaneously with the recognition of the compensated item in its consolidated financial statements. The compensatory asset shall be measured on the same basis as the compensated item, and the amount expected to be irrecoverable shall be deducted from the carrying amount of the compensatory asset based on management's estimate of its recoverability.
When the compensation relates to an asset or liability of the acquired party recognized at its fair value on the acquisition date, the buyer shall recognize the compensatory asset on the acquisition date and initially measure it at its fair value on the acquisition date. This fair value measurement shall include the impact of uncertainty in future cash flows arising from recoverability considerations, and therefore, no separate estimate of its recoverability is required.