What Is a Fictitious Asset?

The so-called virtual assets refer to the expenses or losses that have occurred, but are temporarily listed as asset items such as pending expenses, deferred assets, pending current asset losses and pending fixed asset losses due to the lack of affordability of the enterprise.

Virtual asset

Right!

The so-called virtual assets refer to what has happened

The reason why "virtual assets" are listed as asset items is that they completely conform to the meaning of assets.

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The reality is that companies often use virtual asset accounts as "reservoirs" and do not recognize, understate, or amortize the costs and losses that have occurred in a timely manner. This has become a whitewashed accounting statement for some state-owned enterprises and listed companies. Loss, false profit and direct loss. However, it is important to point out that we cannot deny the objective existence of virtual asset projects because of the above-mentioned disadvantages, because the general crux of false accounting information is that the company does not timely or reasonably amortize or transfer it for its own purposes pin.

The key to overcoming the possible shortcomings of "virtual assets" accounting lies in reasonable institutional arrangements. First, the recognition criteria for "virtual assets" should be reasonably determined based on the nature of the expenditure, that is, whether an expenditure can be listed for assessment, Conditions for deferred and other virtual asset projects; secondly, the amortization period or resale time limit of each virtual asset is reasonably determined according to the length of the benefit period. In reality, some companies' false accounting information comes from these two aspects. Therefore, by grasping these two items, we will be able to eliminate the problem of false information.