How is Aerial Photography Done?

China Aviation Technology Industry Co., Ltd. (hereinafter referred to as "Aviation Technology" or "Aviation Technology") was formally registered in Beijing, China on April 30, 2003, with a registered capital of RMB 4.6 billion. On October 30, 2003, AVIC was listed on the main board of the Hong Kong Stock Exchange.

China Aviation Technology Industry Co., Ltd.

China Aviation Technology Industry Co., Ltd. (hereinafter referred to as "Aviation Technology" or "Aviation Technology") was formally registered in Beijing, China on April 30, 2003, with a registered capital of RMB 4.6 billion. On October 30, 2003, AVIC Engineering

"Using the power of capital" to go international, and the key to quickly enter the industry's frontiers is to enter the international capital market, and to solve the strategic reserve problem of competition from the financial perspective. In 2003, AVIC became the first large military enterprise group in China to complete its shareholding transformation and successfully listed overseas. After landing in Hong Kong's capital market, a very urgent and critical issue was put in AVIC In front of the accountant: AVIC is listed in Hong Kong and four holding companies are listed in China. Due to the different financial systems, how the Group provides attractive financial reports and business development forecasts for investors in different capital markets is highlighted in:

1. The internal equity relationship of the group is complicated. How to meet the automatic and accurate merger calculation under the multi-level and complex equity structure of the group.

2. Different accounting currencies, how to adapt to the requirements of foreign investors to accurately reflect the actual situation of foreign currency business.

3. The rules of the merger are different, and how the data in the group's consolidated statements can be adjusted quickly for domestic and foreign investors.

4. The submission time of the consolidated statement is strict. How to complete the group merger within seven days and maintain the consistency of the consolidated accounting policy?

5. In order to issue a notarized group audit report, how to reduce the difficulty for an international accounting firm to audit Chinese group companies, so as to complete the audit of financial reports in a short period of time.

Data link the differences between accounting standards for Chinese listed companies and international accounting standards

In December 2001, the seven largest international accounting firms (mainly Andersen, Ernst & Young, KPMG, and Pricewaterhouse) released the 2001 Generally Accepted Accounting Principles Report, stating the differences between the accounting standards of Chinese listed companies and international accounting standards. For the following four aspects:

(1) China is different from international accounting standards due to the lack of specific recognition and measurement standards. Including equity combination, provision in the case of mergers and acquisitions, employee benefits, discounting of liabilities, disposal of issuer's financial instruments, suspension of recognition of financial assets, derivative hedging accounting, deferred accumulation related to the entity when disposing of a foreign entity Exchange difference processing.

(2) There are no specific disclosure rules for the following items in China: statement of changes in equity (except for foreign-invested enterprises), fair value of financial instruments (except for listed trading investments), fair value of investment real estate, termination of operations, diluted earnings per share 2. Disclosure of the current cost of the inventory or the cost of the first-in-first-out method when using the FIFO method.

(3) Chinese accounting standards differ from international accounting standards in the following respects. Subsidiaries engaged in non-similar activities are not in the scope of the consolidated statement preparation, the subsidiaries to be sold (even previously merged) are not in the scope of the consolidated statement preparation, and most companies are merged) are not in the scope of the consolidated statement preparation. Business combinations use the purchase method of accounting. The assets and liabilities of the consolidated subsidiaries are combined at their book values, withholding or amortization of overhaul costs are allowed, and transactional and derivative financial assets and liabilities are generally not held at fair value. Dividends are recognized as liabilities based on the accrual principle, and deferred income tax accounting is not commonly used. If applied, the time difference is also calculated, and deferred or liability methods are allowed to be processed. The definition of extraordinary items is very broad. Relevant specific disclosures were not required, and there were no specific entity merger guidelines.

(4) Other differences. In some cases, China allows financial leases to be recognised at undiscounted lease payments; China has not required segment reports to be prepared using a policy that uses financial reporting.

Combining with the actual management needs of AVIC and the Group's problems in the process of compiling consolidated statements, AVIC put forward the following requirements for the construction of a consolidated statement system:

1. Standardize the financial policies and accounting systems of the group and its subsidiaries

AVIC is reorganized from nearly 100 enterprises and institutions of AVIC Group II, including industrial enterprises, research institutes and other institutions, as well as 4 listed companies, which are affected by factors such as different types of enterprises, industry nature, and regions. Impact, there are some differences in the accounting policies of each unit, which makes the data basis for the preparation of consolidated statements-data items in individual statements of member units different, affecting the accuracy of consolidated financial statements. Therefore, through the standardization of accounting subjects, accounting treatment policies, and internal financial systems, it is conducive to improving the quality of the individual statements of the group and member units and the accuracy of the group's consolidated accounting statements.

2.Unify group report format and data

As a unified and standardized accounting report format, the content of the project cannot be modified and changed at will. Changes in the report format affect the accuracy and efficiency of the consolidation of accounting statements. At the same time, the authenticity, completeness and accuracy of the statements of group member units will directly affect The financial consolidated statements are true, complete and correct. How to effectively ensure the correctness and completeness of the format, content and data of individual statements prepared by the Group and its members is one of the issues that the Group needs to pay attention to when compiling financial statements.

3. Develop a financial statement system for the management needs of multiple accounting systems

As AVIC is listed in Hong Kong, and some of its subordinate holding companies are listed in China, the group needs to provide a reporting system based on different accounting systems and currencies. One is based on the Renminbi, and is based on the mainland accounting system. The reporting system provided by domestic management agencies; the second is based on the Hong Kong dollar and based on the Hong Kong accounting system to publish annual and quarterly reporting systems for shareholders in Hong Kong, so that two sets of reporting systems are issued based on the same business data according to different accounting standards and currencies . Therefore, the establishment of a timely, reasonable, and financial reporting system that meets the requirements of different systems will help the Group to resolve the requirements for disclosure of accounting statement information and requirements for consolidation standards in different capital markets.

4. Institutional reorganization and block management in accordance with the nature of the business

AVIC's main business is concentrated in two aspects, one is the production of aircraft manufacturing and related accessories; the other is the manufacturing of vehicles, motorcycles and other related services. AVIC s successful listing in Hong Kong has optimized the company s financial position and will further strengthen the integration of existing resources in two main directions. With the further integration of the group, it is necessary to re-integrate and divide the original assets, liabilities and equity, reform the original group reporting system based on the need of management, and summarize and merge the business segments and regions to strengthen the analysis. The Ministry's reporting system reflects the financial situation, operating results and cash flow of the group from different aspects.

5. Implement centralized management of group financial information

Traditional group reports are collected and delivered in layers before the final aggregation and consolidation is performed in the group. In the submission process, the time is lengthy, and the group cannot guarantee that the content of the statement data meets the group's prior regulations and requirements, and it cannot verify these Whether the logical relationship between the statements is completely correct. Only after the draft of the consolidated statement is prepared can problems be found. The non-stop verification and correction with member companies is fundamentally due to the decentralized storage of financial information and the lack of uniform operating standards. Group financial information systems need to solve these problems fundamentally.

At the same time, the traditional method of group report reporting is not conducive to the group's real-time and dynamic understanding of the financial statements of subordinate companies, and it is not conducive to the management of the reporting of subordinate units.

Therefore, the centralized management of group company financial statement data can help the group company to dynamically monitor the content, format, and data of subordinate company statements, and understand the reporting status and reporting of subordinate companies in a timely manner.

Difficulties in Consolidating the Consolidated Statements of Group Companies

Entering China's 100 largest group companies, we can find that even in enterprises that have achieved financial informatization, the overall efficiency, automation and accuracy of their consolidated statements are still not high, and some even need a computer tool even if they need a computer tool. It takes about a month to get the job done. This obviously does not meet the requirements of group managers' urgent use of information. So what's the problem? We find the following most common problems that make financial consolidation of large group companies difficult and complicated:

1. How to deal with the data specification and collection of individual statements of group member units operating across regions in a timely manner?

2. How to organize and realize the multi-industry accounting merger brought by cross-industry operation?

3. How to automatically and accurately combine calculations under the complex multi-level equity structure of the group?

4. How do multi-level group companies complete financial consolidation in an orderly manner and maintain consistency in accounting policies for consolidation?

5. In the case of cannibalizing acquisitions and equity reductions in an accounting period, how can the subsidiary's profits be calculated by segments in accordance with accounting standards?

6. Different capital markets have different requirements for equity investment accounting and reporting. For example, the domestic method requires the equity method of accounting, and the Hong Kong method requires the cost method of accounting. How can two different reporting requirements be met at the same time?

7. How to complete the consolidation calculation when the accounting records of intra-group transactions are not smooth due to inconsistent account use or bookkeeping time?

8. Can the consolidation cycle of the group's financial statements be adjusted in a timely manner, and can monthly, quarterly and annual consolidation be achieved in a timely manner?

9. How to support distributed consolidated reporting and financial analysis?

AVIC Engineering