What are the changes to the criteria for long term equity investment?

1) Other changes in the investee's ownership equity.

Borrow: Long-term equity investment - other equity changes.

Credit: Capital Reserve - Other Capital Reserve (earned).

or Borrow: Capital Reserve - Other Capital Reserve (Loss).

Credit: Long-term Equity Investment - Other Comprehensive Income.

2) Changes in other comprehensive income of the investee.

Borrow: Long-term equity investment - other comprehensive income.

Credit: Other Comprehensive Income (earned).

Or. Borrow: Other comprehensive income (loss).

Credit: Long-term Equity Investment - Other Comprehensive Income.

Legal Analysis: Scope of Application of Equity Method for Long-term Equity Investments:

1. The application of the equity method is the accounting of long-term equity investment in joint ventures and associates, usually accounting for 20% to 50% of the shares.

2. Treatment of investment income.

As long as the invested enterprise has a profit at the end of the year, regardless of whether it is divided or not, I will recognize the investment income in proportion to my share and adjust the book value of the long-term equity investment.

3. When the enterprise has joint control or significant influence on the investee, the long-term equity investment shall be accounted for by the equity method.

A long-term equity investment in which the enterprise has common control over the investee, i.e., the long-term equity investment of the enterprise in its joint venture. The long-term equity investment of the enterprise in the investee has a significant impact, that is, the long-term equity investment of the enterprise in its associates.

Legal basis: Company Law of the People's Republic of China

Article 5 The company engaged in business activities must abide by laws and administrative regulations, abide by social morality and business ethics, be honest and trustworthy, accept the supervision of the public and assume social responsibility.

The legitimate rights and interests of the company are protected by law and are not infringed.

Article 6 To establish a company, the state stove shall apply to the company registration authority for establishment and registration in accordance with the law. If the establishment conditions stipulated in this Law are met, they shall be registered as a limited liability company or a stock company by the company registration authority; If it does not meet the establishment conditions stipulated in this Law, it shall not be registered as a limited liability company or a share****.

If laws and administrative regulations stipulate that the establishment of a company must be approved, the approval formalities shall be completed in accordance with the law before the company is registered in the dust.

The public may apply to the company registration authority for inquiries into the company's registration matters, and the company registration authority shall provide inquiry services.

Legal Analysis: The Principle of Ownership of Long-term Equity Investment is applicable to long-term equity investment in which the investment enterprise has common control or significant influence over the investee.

Legal basis: Accounting Standards for Enterprises No. 2 - Long-term Equity Investment Article 11 When the investor recognizes the share of the investee's net profit or loss, it shall recognize the investee's net profit after adjustment based on the fair value of the investee's identifiable net assets at the time of investment. At the same time, if the accounting policies and accounting periods adopted by the investee are inconsistent with those of the investor, the financial statements of the investee shall be adjusted in accordance with the accounting policies and accounting periods of the investor, and the investment income and other comprehensive income shall be recognized accordingly.

The biggest change in the new standard for long-term equity investment is that the scope of long-term equity investment has been revised, and the original standard does not stipulate the scope of long-term equity investment in the main text, but stipulates that there are four main types of long-term equity investment in the Explanation of Accounting Standards for Business Enterprises; The new standard stipulates that the above-mentioned fourth type of investment shall be subject to Accounting Standard for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments, which will help to further standardize the relevant accounting treatment, and the cost method of measurement shall be adopted in accordance with Standard No. 22, which will not have an undue material impact on practice.

1. The form of foreign equity change and the problems in the examination and approval.

There are the following changes:1Equity is transferred between corporate investors through an agreement.

2.The corporate investor transfers equity to its affiliates or other assignees with the consent of the other investors. 3.

The adjustment of the registered capital of the enterprise by the enterprise investor agreement leads to a change in the equity of the investors of all parties. 4.If an enterprise investor merges or divides, its successor after the merger or division inherits the equity of the original investor in accordance with the law.

The problems in the approval are:1It should be noted that if a foreigner or legal person inherits equity, it should be witnessed by a lawyer or a court.

2.When the equity of a Chinese investor invested in state-owned assets is changed, the value of the equity to be changed must be assessed by the relevant state-owned assets appraisal agency and confirmed by the state-owned assets management department.

2. Is the start-up fee a management fee?

Start-up costs are expense items. The new accounting standards are very clear and include "administrative expenses". Guide to Accounting Standards for Business Enterprises – Appendix:

Accounting Subjects and Main Accounting Treatment: Management Expenses - This account accounts for the management expenses incurred by the enterprise to organize and manage the production and operation of the enterprise, including the start-up expenses incurred by the enterprise during the preparation period.

Article 2 of the Investment Law, in the territory of the People's Republic of China, public or non-public raised funds to establish **investment** (hereinafter referred to as **), managed by **manager, **custodian, for the benefit of **share holders, to carry out **investment activities, this Law shall apply; Where there are no provisions in this Law, the provisions of the Trust Law of the People's Republic of China, the ** Law of the People's Republic of China and other relevant laws and administrative regulations shall apply.