How to establish and improve the laws and regulations of the asset appraisal industry and strengthen

1. What is the scope of application of the three methods of asset valuation?

1. The scope of application of the three methods of asset valuation includes:

1) Market Approach. The market approach is a general term for various valuation techniques that use recent transactions** of the same or similar assets in the market to estimate the value of assets through direct comparison or analogy analysis;

2) Income approach. A general term for various valuation methods that determine the value of an asset by estimating the present value of the expected future return of the asset being evaluated;

3) Cost method. Cost method refers to the general term of various valuation methods that first estimate the replacement cost of the assessed asset, estimate the various depreciating factors existing in the assessed asset, and deduct it from the replacement cost to obtain the value of the assessed asset.

2. Legal basis: Article 2 of the Asset Appraisal Law of the People's Republic of China.

The term "asset appraisal" (hereinafter referred to as "appraisal") as used in this Law refers to the professional service conduct of appraisal institutions and their appraisal professionals to assess and estimate immovable property, movable property, intangible assets, enterprise value, asset losses or other economic rights and interests and issue appraisal reports on the basis of entrustment.

2. What are the functions of asset valuation?

1. Valuation of intangible assets. Including brand, trademark, goodwill, sales network, entrepreneur value;

2. Overall asset evaluation: applicable to company establishment, restructuring, reorganization, equity transfer and capital contribution, joint venture, cooperation, leasing, contracting, financing, mortgage, guarantee, legal proceedings, bankruptcy liquidation and other purposes;

3. Individual asset valuation: including machinery and equipment, professional production lines, buildings, current assets, long-term investment and other assets.

Legal basis: Interim Measures for the Appraisal and Management of State-owned Assets of Enterprises

Article 6 If an enterprise commits any of the following acts, it shall evaluate the relevant assets: (1) the whole or part of the enterprise is rebuilt into a limited liability company or shares; (2) foreign investment in non-monetary assets; (3) Merger, division, bankruptcy or dissolution; (4) Changes in the equity ratio of state-owned shareholders of non-listed companies; (5) Transfer of property rights; (6) Asset transfer or replacement; (7) Leasing all or part of assets to non-state-owned units; (8) repaying debts with non-monetary assets; (9) Litigation involving assets; (10) Acquisition of assets of non-state-owned units; (11) Accepting non-state-owned units with non-monetary assets; (12) Accepting non-state-owned units to settle debts with non-monetary assets; (13) Other matters that require asset appraisal as provided for by laws and administrative regulations.

Seventh enterprise has one of the following acts, may not be assessed on the relevant State-owned assets: (A) by the people at all levels or their State-owned assets supervision and administration of the approval of the whole or part of the assets of the enterprise free of charge; (2) Merger, asset (property rights) replacement and free transfer between a wholly state-owned enterprise and its subordinate wholly-owned enterprises (public institutions) or between its subordinate wholly-owned enterprises (public institutions).

Article 8 If an enterprise commits any of the acts listed in Article 6, it shall be entrusted by its property rights holding unit to an asset appraisal agency with corresponding qualifications to conduct an assessment.

Legal basis: Interim Measures for the Appraisal and Management of State-owned Assets of Enterprises

Article 6 If an enterprise commits any of the following acts, it shall evaluate the relevant assets: (1) the whole or part of the transformation into a limited liability company or shares; (2) foreign investment in non-monetary assets; (3) Merger, division, bankruptcy or dissolution; (4) Changes in the equity ratio of state-owned shareholders of non-listed companies; (5) Transfer of property rights; (6) Asset transfer or replacement; (7) Leasing the entire assets or part of the assets of the pickpockets to non-state-owned units; (8) repaying debts with non-monetary assets; (9) Litigation involving assets; (10) Acquisition of assets of non-state-owned units; (11) Accepting non-state-owned units with non-monetary assets; (12) Accepting non-state-owned units to settle debts with non-monetary assets; (13) Other matters that require asset appraisal as provided for by laws and administrative regulations.

Seventh enterprise has one of the following acts, may not be assessed on the relevant State-owned assets: (A) by the people at all levels or their State-owned assets supervision and administration of the approval of the whole or part of the assets of the enterprise free of charge; (2) Merger, asset (property rights) replacement and free transfer between a wholly state-owned enterprise and its subordinate wholly-owned enterprises (public institutions) or between its subordinate wholly-owned enterprises (public institutions).

Article 8 If an enterprise has any of the acts listed in Article 6, the former Sun Xun shall be entrusted by the property rights holder to an asset appraisal agency with corresponding qualifications to conduct an assessment.

1. What are the legal bases for asset valuation?

The laws, rules and regulations on which China's asset appraisal is based:

Company Law of the People's Republic of China (as amended, promulgated on December 25, 1999).

** Law of the People's Republic of China (promulgated on December 29, 1998).

Measures for the Administration of State-owned Assets Appraisal (November 16, 1991, Order No. 91).

Detailed Rules for the Implementation of the Measures for the Administration of State-owned Assets Assessment (State-owned Assets Ban Fa [1992] No. 36).

Provisions on the Domestic Listing of Foreign Shares with Shares (December 25, 1995, Order No. 189).

Asset Valuation Standards - Intangible Assets (Cai Kuai [2001] No. 1051).

Order No. 10 of the Rules for the Preparation of Information Disclosure of Companies Offering ** to the Public: Special Provisions on the Content and Format of Prospectuses of Companies Engaged in Real Estate Development Business (February 6, 2001, Zheng Jian Fa [2001] No.7).

Notice of the China Securities Regulatory Commission on Several Issues Concerning the Major Purchase, Replacement and Replacement of Assets of Listed Companies (December 10, 2001, Zheng Jian Gong Si Zi [2001] No.105).

Notice of the Ministry of Finance on Reforming the Administrative Management of State-owned Assets Appraisal, Strengthening the Administrative Management of Asset Appraisal, and Strengthening the Supervision and Management of Asset Appraisal (December 31, 2001, Guo Fa [2001] No. 102).

Interim Provisions on the Basic Content and Format of Asset Appraisal Report (Cai Ping Zi [1999] No. 91, 1999).

Asset Appraisal Standards - Basic Standards" and "Asset Appraisal Professional Ethics Standards - Basic Standards" (Cai Qi [2004] No. 20, 2004).

Guiding Opinions on Enterprise Valuation (Trial) (China Asset Appraisal Association, January 2005).

At present, the current laws and standards for asset appraisal are as follows: Basic Standards and CAA No. 30-54 2017 will be implemented on October 1, 2017.

Asset Appraisal Law of the People's Republic of China (2016).

Basic Standards for Asset Appraisal (Cai Zi [2017] No. 43)Code of Professional Ethics for Asset Appraisal (CAA [2017] No. 30)Practice Standards for Asset Appraisal – Asset Appraisal Procedures (CAA [2017] No. 31)Practice Standards for Asset Appraisal – Asset Appraisal Report (CAA [2017] No. 32)Practice Standards for Asset Appraisal – Asset Appraisal Entrustment Contract (CAA [2017] No. 33)Practice Standards for Asset Appraisal – Asset Appraisal Archives (CAA [2017] [2017]) No. 34) Practice Standards for Asset Appraisal - Utilization of Expert Work and Related Reports (CAA [2017] No. 35).

Practice Standards for Asset Appraisal – Enterprise Value (CAA [2017] No. 36)Practice Standards for Asset Appraisal – Intangible Assets (CAA [2017] No. 37)Practice Standards for Asset Appraisal – Real Estate (CAA [2017] No. 38) Practice Standards for Asset Appraisal – Machinery and Equipment (CAA [2017] No. 39) Asset Valuation Practice Standards – Jewelry (CAA [2017] No. 40) Asset Valuation Practice Standards – Forest Resource Assets (CAA [ [2017] No. 39) Asset Valuation Practice Standards – Jewelry (CAA [2017] No. 40) Asset Valuation Practice Standards – Forest Resource Assets (CAA[ 2017 [No. 41]) Guidelines for the Appraisal Report of State-owned Assets of Enterprises (CAA [2017] No. 42)Guidelines for the Appraisal Report of State-owned Assets of Financial Enterprises (CAA [2017] No. 43), Guidelines for the Appraisal of Intellectual Property Assets (CAA [2017] No. 44), Guidelines for Appraisal for the Purpose of Financial Reporting (CAA [2017] No. 45), Guidelines for the Business Quality Control of Asset Appraisal Institutions (CAA [2017] No. 46), Guiding Opinions on the Valuation of Intangible Assets of Cultural Enterprises (CAA [2016]) No. 14) Guiding Opinions on Types of Asset Appraisal Value (CAA [2017] No. 47), Guiding Opinions on Legal Ownership of Asset Appraisal Objects (CAA [2017] No. 48), Guiding Opinions on Patent Asset Appraisal (CAA [2017] No. 49), Guiding Opinions on Copyright Asset Appraisal (CAA [2017] No. 50), Guiding Opinions on Trademark Asset Appraisal (CAA [2017] No. 51), Guiding Opinions on the Valuation of Financial Non-performing Assets (CAA [2017] No. 51) No. 52) Guiding Opinions on the Appraisal of Investment Real Estate (CAA [2017] No. 53), Guiding Opinions on the Appraisal of Real Options (CAA [2017] No. 54), Guiding Opinions on Asset Appraisal Institutions Undertaking Appraisal Business by Bidding (CAA [2014] No. 223).