What is an Investment Loss?

Investment losses refer to losses caused by bad equity or debt investment of an enterprise, including long-term investment losses and short-term investment losses. For the bad investment detected, the enterprise shall analyze the cause one by one. If there is legal evidence to prove that it cannot be recovered, it shall be regarded as a loss. Evidence that the invested unit has been bankrupted, liquidated, cancelled, closed or cancelled, and the industrial and commercial registration has been revoked, causing bad investments that are difficult to recover, are considered to be the basis of loss: bankruptcy announcement of the court or settlement documents for bankruptcy liquidation; industrial and commercial departments Documents of cancellation and revocation; related administrative decision documents of government departments. ^[1]

Investment loss

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Investment losses refer to losses caused by bad equity or debt investment of an enterprise, including long-term investment losses and short-term investment losses. For the bad investment detected, the enterprise shall analyze the cause one by one. If there is legal evidence to prove that it cannot be recovered, it shall be regarded as a loss. Evidence that the invested unit has been bankrupted, liquidated, cancelled, closed or cancelled, and the industrial and commercial registration has been revoked, causing bad investments that are difficult to recover, are considered to be the basis of loss: bankruptcy announcement of the court or settlement documents for bankruptcy liquidation; industrial and commercial departments Documents of cancellation and revocation; related administrative decision documents of government departments. ^[1]

The invested unit has been bankrupted, liquidated, cancelled, closed or cancelled, and its industrial and commercial registration has been revoked, resulting in hard-to-recover bad investments, which are determined as losses based on the following evidence:

(1) the bankruptcy announcement of the court or the settlement documents for bankruptcy liquidation;

(2) Documents cancelled or revoked by the industry and commerce department;

(3) Relevant administrative decision documents of government departments;

For those that have been liquidated, the balance after deducting the liquidation of the property is recognized as a loss.

If it has not been liquidated, it will be issued by a social intermediary agency after professional inference and objective evaluation.

(1) For an equity investment that does not have control, the investment period has expired or the investment period has exceeded 10 years, and the invested unit is insolvent due to operating losses for 3 consecutive years, the enterprise is based on the assets of the invested unit audited by a certified public accountant The balance sheet and profit and loss account confirm investment losses; the invested unit goes bankrupt, cancels the industrial and commercial registration, or the people's government at or above the county level decides to close down, etc. The enterprise confirms the investment loss based on the relevant legal documents and information obtained.

(2) For equity investment with control rights, if the invested enterprise suffers from operating losses, the enterprise shall account for investment losses in accordance with the equity method; if the invested enterprise terminates due to illegal operations or other reasons, the enterprise shall cancel the industrial and commercial registration in accordance with the invested enterprise or Legal documents such as being closed down, declared bankruptcy, and its liquidation report confirm investment losses.

(3) For the loss of a company's debt investment, which is a bond investment, including losses incurred by the company in operating futures, securities, and foreign exchange transactions, according to the enterprise's internal business authorization information, and according to the legal transaction fund settlement documents provided by the relevant transaction settlement institution, one by one confirm. For transaction losses beyond the scope of authorization of internal business, the enterprise shall hold the financial responsibility of the business personnel.

(4) For the loss of investment in creditor's rights other than bonds, if the investee has terminated, confirm it according to the report of the investee; if the investee has not terminated, it can be transferred according to the creditor's rights signed with the relevant party or If the settlement agreement is confirmed but the investment period has not expired, the relevant agreement shall be notarized; if a lawsuit is involved, it shall be confirmed according to relevant legal documents and materials.