Circular of the Ministry of Finance on Printing and Distributing the Accounting Measures for Press and Publication Industry
Circular of the Ministry of Finance on Printing and Distributing the Accounting Measures for Press and Publication Industry
Circular of the Ministry of Finance on Printing and Distributing the Accounting Measures for Press and Publication Industry
Cai Kuai [2004] No. 1
January 14, 2004
Ministries and commissions and departments directly under the State Council, financial departments (bureaus) of each province, autonomous region, municipality directly under the central government, and city specifically designated in the state plan, the Financial Bureau of Xinjiang Production and Construction Corps, and central enterprises:
With a view to normalizing the accounting of press and publication industry and improving the quality of accounting information, the Ministry of Finance, taking into consideration the actual conditions of press and publication industry, enacts the Accounting Measures for Press and Publication Industry in accordance with the Accounting Law of the People's Republic of China, the Regulations on Business Enterprise Financial Reporting, the Enterprise Accounting System and other relevant laws and regulations in China and hereby prints and distributes them. The Accounting Measures for Press and Publication Industry shall be implemented as of January 1, 2004 in each press and publication industry that is implementing the Enterprise Accounting System. Where the press and publication industry is implementing the Enterprise Accounting System and the Measures, the Industrial Enterprise Accounting System, the Accounting Rules for Goods Circulation Business and the Circular on Regulations on Several Issues of Movie, Press and Publication Enterprise on the Implementation of New Accounting System shall cease to be implemented. (Cai Kuai Zi [1993] No. 40)
In case you have any questions during the implementation, please feed back to the Ministry timely.
Appendix: Accounting Measures for Press and Publication Industry
One General Instruction
(I) With a view to normalizing the accounting of press and publication industry and providing reliable and complete accounting information of press and publication industry, which is conducive to the fair competition of the press and publication industry, and taking into consideration characteristics and actual conditions of the press and publication industry, the Accounting Measures for Press and Publication Industry (hereinafter referred to as "the Measures") is hereby formulated in accordance with the Accounting Law of the People's Republic of China, the Regulations on Business Enterprise Financial Reporting, the Enterprise Accounting System and other relevant laws and regulations in China.
(II) The operating entity who engages in publishing (including such activities as publishing, issuing, printing, coping and professing, material supplying of books, newspapers, periodicals, audiovisual products and electronic publications) within the territory of the People's Republic of China shall implement the Measures while implementing the Enterprise Accounting System.
(III) The Measures which consists of the Accounting Measures for Publishing Entity, the Accounting Measures for Publishing Enterprise, the Accounting Measures for Newspaper Industry, the Cost Accounting Measures for Printing and Copying Enterprise and the Cost Accounting Measures for Printing Material Supplying Enterprise, shall only regulate the accounting measures of main business of press and publication industry. Entities that engage in businesses such as publishing of books, periodicals, audiovisual products, electronic publications, network publications and overhead transparencies (including micro-reproductions) (hereinafter referred to as "publishing entity"), publishing enterprises, newspaper publication entities, printing and copying enterprises and printing material supplying enterprises shall implement the corresponding accounting measures according to the characteristics of their operation.
Two Accounting Measures for Publishing Entity
(I) Notes
1. publishing entities shall implement the Measures while implementing the Enterprise Accounting System. The subordinate units of the publishing entities with legal person status and independent accounting system shall implement the corresponding accounting measures while implementing the Enterprise Accounting System.
2. agencies such as issuing, periodical and printing enterprises with an independent accounting system within the publishing entities but without legal person status shall refer to the corresponding accounting measures and set up corresponding detailed account respectively within the unified accounting system of publishing entities to make classified accounting and to make a regular examination and calculation to the consistency of accounts and of accounting and actual assets in accordance with relevant regulations.
3. as for loss for obsolete and slow moving inventories such as books, periodicals, audiovisual products, electronic publications and overhead transparencies (including micro-reproductions), the publishing entities shall carry out yearly check and deduct commission difference according to the characteristics of publications.
4. where publications are announced scrapped after review and approval, auxiliary accounts shall be set up in accordance with the list of announced scrapped publications. The income derived from reselling the announced scrapped publications shall be examined and calculated in the title of "non-operating income".
5. the issuing agency without an independent accounting system of the publishing entities that distribute foreign publications on an entrusting basis shall be examined and calculated in accordance with relevant regulations of the Enterprise Accounting System. Those publishing entities that distribute foreign publications not on an entrusting basis shall conduct management and calculation on the publications purchased in the same way on publications of the current edition. Where the said publishing entities conduct calculation based on the selling price, the corresponding detailed item might be set up under such titles as "inventory goods" or "difference between purchasing price and selling price" for such calculation.
6. the direct cost on the publications that was originally examined and calculated under the title of "cost on extracting and editing" and reflected the cost on single publication, shall be examined and calculated under the title of "production costs-other direct costs". Those that cannot reflect the cost on single publication shall be examined and calculated under the title of "cost on extracting and editing" and counted into cost on relevant publications in a sound allotment.
7. as for publishing entities which mainly engage in providing advertising service, charge for using the copyright under re-permission by exclusive publishing copyright (including charge for leasing) and copyright trade, the income derived from advertisement, charge for using the copyright under re-permission by exclusive publishing copyright (including income from leasing) and copyright trade shall be examined and calculated under the title of "main business income"; or it shall be examined and calculated under the title of "other business income".
8. publishing entities shall entrust relevant entities to assist the publicity and spread of the publications; cost on publicizing and spreading shall be paid in proportion to the total pricing (fixed price) for publicizing publications stipulated in contract the same way as that on consignment-out.
(II) Instruction on supplementary accounting titles
1. the setup of accounting titles
The Measures have added titles such as "accrued production cost " and "cost on extracting and editing" and made a supplementary regulation on the setup of classification items and content of accounting of such titles as "inventory goods", "cost difference of products", "goods on consignment-out", "provision for obsolete stocks", "other fees payable", "capital surplus", "production cost", "main business income" and "subsidy income" on the basis of the Enterprise Accounting System.
2. instruction on supplementary accounting titles
1243 Inventory Goods
I. This title shall set up detailed account and carry out classified examination and calculation for different types of publications under this account title in accordance with different versions (printing, batches, periods) and pricing The storehouse shall set up classified-kind cards for different categories in accordance with different versions (printing, batches, and periods) and pricing and record the information on buying-and-selling of inventory publications.
II. The inventory goods may be valuated in accordance with pricing (or planned cost method, the same below) or actual cost.
(I) Inventory publications examined and calculated based on pricing
1. the publications that are finished and stored into warehouse shall be debited to this title in accordance with the pricing of inventory publications and credited to the title of "production cost" in accordance with actual production costs and credited to the title of "cost difference of products" in accordance with the difference between pricing and actual costs.
2. the publications that are delivered on consignment-out (or consignment) or installment sale shall be priced at the price of delivered publications and be debited to the title of "goods on consignment-out" or "goods delivered on installment sale" and credited to this title.
3. where the sales cost derived of publications of the current period is carried over, the cost shall be debited to such title as "cost of main business" and "cost difference of products" and be credited to such titles as "goods on consignment-out" and "goods delivered on installment sales".
(II) Inventory publications examined and calculated based on actual cost
1. the publications that are finished and stored into warehouse shall be debited to this title and credited to the title of "production cost".
2. the publications that are delivered on consignment-out (or consignment) or installment sales shall be examined and calculated based on the actual cost and be debited to the title of "goods on consignment-out" and "goods delivered on installment sales" and credited to this title.
3. sales cost of the publications of the current period that is carried over shall be debited to the titles of "cost of main business", and credited to such titles as this title and the title of "goods on consign-out" and "goods delivered on installment sales".
4. as for the carry-over of sales cost derived from single variety, the sales cost of publications sold may be determined by means of moving average, weighted average, the FIFO and the LIFO. The accounting measures shall not be changed without approval after being determined. Where the accounting measures need to be changed, explanation shall be made in the appendix of accounting statement.
III. Accounting of publications under sale return
(I) Accounting based on of pricing
1. the return of publications delivered, of which the income has not been confirmed, shall be debited to this title and credited to such titles as" goods on consignment-out", "goods delivered on installment sale".
2. the return of publications, of which the income has been confirmed and of which the sales income has been confirmed in the current period but the sales cost has not been carried over, shall be debited to the title of "main business income" and "tax payable - value-added tax payable (output tax)" and credited to such titles as "bank deposit", "accounts receivable" and "advance from customers"; As for the sales cost which has been carried over, at the same time it shall be priced at the pricing of returned publications and debited to this title and such titles as "goods on consignment-out" and "goods delivered on installment sales" and credited to such titles as "cost of main business" and "cost difference of products".
3. The publications that were sold out on and before the date of balance sheet and returned between the date of balance sheet and the reported date of financial accounting reports approved shall be dealt with as adjusting of items after the date of balance sheet to adjust the income and cost of the reported year.
(II) Accounting based on actual cost
1. the return of publications delivered, of which the income has not been confirmed, shall be debited to this title and credited to such titles as "goods on consignment-out", "goods delivered on installment sales".
2. the return of publications, of which the income has been confirmed and of which the sales income has been confirmed in the current period but the sales cost has not been carried over, shall be debited to the title of "main business income" and "tax payable - value-added tax payable (output tax)" and credited to such titles as "bank deposit", "accounts receivable" and "advances from customers"; As for the sale cost which has been carried over, at the same time it shall be priced in accordance with the pricing of returned publications and debited to this title and such titles as "goods on consignment-out" and "goods delivered on installment sales" and credited to the title of "cost of main business".
3. the publications that were sold out on and before the date of balance sheet and returned between the date of balance sheet and the reported date of financial accounting reports approved shall be dealt with as adjusting of items after the date of balance sheet to adjust the income and cost of the reported year etc.
1244 Cost Difference of Products.
I. This title shall examine and calculate the publishing entities on a basis of pricing (or planned cost method, the same below) and the inventory publications on a basis of differences between actual cost of inventory publications and pricing (or planned cost, the same below).
II. The publications that are finished and stored into warehouse shall be debited to the title of "inventory goods" in accordance with the pricing and credited to the title of "production cost" in accordance with actual cost and credited to this title in accordance with the difference between the pricing and actual cost; where the sales cost of publications of the current period is carried over, the sales cost shall be debited to the title of "cost of main business" and to this title in accordance with the cost difference allotted and credited to such titles as "inventory goods", "goods on consignment-out" and "goods delivered on installment sales" in accordance with the pricing of the publications sold in the current period.
III. Formula for calculating cost difference of products that shall be allotted by the publications sold in the current period goes as follows:
Cost difference of products = Total pricing of publications sold in current period × Rate of cost difference of products
Rate of cost difference of products = (cost difference of products at the beginning of period credit amount of cost difference of products in current period / total pricing of publications at the beginning of the period total pricing of inventory publications in the current period) × 100%
of which, the total pricing of publications includes total pricing of sales of inventory publications, publications on consignment-out and publications delivered on installment sales.
IV. This title shall set up detailed accounts in accordance with varieties or operating departments of inventory publications and carry out classified examination and calculation.
V. The terminal credit balance under this title reflects the difference that the actual cost of inventory publications, publications on consignment-out and publications delivered on installment sales of publishing entities is lower than the total pricing.
1261 Consignment-out
I. The title shall carry out classified examination and calculation on amount and sum respectively according to different versions (printing, batches, period), pricing and entrusted entities.
II. Examination and calculation on publications on consignment-out (or consignment) by means of pricing
(I) Those who carry out examination and calculation by means of pricing may set up classification items in accordance with "actual amount" and "discount".
(II) The publications that are delivered shall be debited to this title and credited to the title of "inventory goods" in accordance with the pricing of delivered publications.
(III) Where the sales cost of publications of the current month is carried over, the sales cost is debited to such titles as" cost of main business" and "cost difference of products" and credited to this title.
III. Examination and calculation on publications on consignment-out (or consignment) by means of actual cost
(I) Where publications are delivered, the publications shall be debited to this title and be credited to the title of "inventory goods" in accordance with the actual cost of publications delivered.
(II) Where the sales cost of publications of the current month is carried over, the cost shall be debited to the title of "cost of main business" and be credited to this title.
1281 Provision for Obsolete Stocks
I. A publishing entity shall set up a classification item of "commission difference of publications" under this title and examine and calculate the dead loss reserves deducted form inventory publications.
II. Publications include inventory books, periodicals (magazines), audiovisual products, electronic publications and overhead transparencies (including micro-reproductions).
III. A publishing entity shall, at the end of every fiscal year, conduct an overall checking on the stock of inventory publications, carry out price checking on a yearly basis and deduct commission difference in accordance with the prescribed proportion. Where a publishing entity deducts commission difference for the first time, commission difference shall be debited to the title of "management fee - commission difference of publications" and be credited to this title. Where the amount accrued and deductible at the end of the following years exceeds the terminal balance of this title, the balance shall be debited to the title "management fee - commission difference of publications" and be credited to this title; Where the amount accrued and deductible is less than the terminal balance of this title, the balance shall be charged off, debited to this title and credited to the title of "management fee - commission difference of publications".
IV. Standards of calculating and deducting commission difference:
(I) The commission difference of paper books shall be deducted in three years, excluding the first year of publishing; as for paper books published in the previous year, commission difference shall be deducted at the rate of 10% to 20% of the total pricing of inventory books at the end of the year; as for paper books published in the previous two years, commission difference shall be deducted at the rate of 20% to 30% of the total pricing of inventory books at the end of the year; as for paper books published in the previous three years, commission difference shall be deducted at the rate of 30% to 40% of the total pricing of inventory books at the end of the year.
(II) As for paper periodicals (including yearbooks), wallpaper calendars and new-year pictures published in the current year, the commission difference shall be deducted in accordance with the actual cost of stocks at the end of the year.
(III) As for audiovisual products, electronic publications and overhead transparencies (including micro-reproductions), commission difference shall be deducted at the rate of 10% to 30% of the actual cost of stocks at the end of the year. Where the aforesaid publications are upgraded and the original publications are still marketable after the upgrade, deduction at the rate of 10% of actual cost of stocks of publications shall be remained; where the original publications are not marketable after upgrade, all of the original publications shall be obsolete.
(IV) The accumulated deduction amount of commission difference of various publications shall not exceed the actual cost.
V. Where publications are approved to be obsolete, cost difference shall be listed and paid in the commission difference of publications.
(I) When examining and calculating the obsolete publications by means of pricing, the actual cost shall be debited to this title. The balance between pricing and actual cost shall be debited to the title of "cost difference of products" and the pricing shall be credited to the title of "inventory goods".
(II) When examining and calculating the obsolete publications by means of actual cost, the accounting shall be debited to this title and be credited to the title of "inventory goods".
VI. The terminal credit balance under the title of "provision for obsolete stocks - commission difference of publications" reflects the dead loss reserves of inventory publications deducted by publishing entities.
2176 Other Payables
I. A publishing entity shall set up a classification item of "construction fee of cultural cause" under this title and examine and calculate the construction fee of cultural cause paid by the publishing entity at a prescribed proportion of advertising income in accordance with relevant regulations of the state.
II. Where a publishing entity deducts construction fee of cultural cause in accordance with advertising income, the construction fee shall be debited to the title of "other business expenses" and be credited to this title (construction fee of cultural cause); where a publishing entity actually pays the fee, the fee shall be debited to this title (construction fee of cultural cause) and be credited to the title of "bank deposit".
......