The Company and all members of the Board of Directors guarantee that the information disclosed is true, accurate and complete, and there are no false records, misleading statements or major omissions.
In accordance with the requirements of Shenzhen Stock Exchange's Self regulatory Guidelines for Listed Companies No. 1 - Standardized Operation of Main Board Listed Companies, the Accounting Standards for Business Enterprises and other relevant provisions, Bona Pictures Group Co., Ltd. (hereinafter referred to as "the Company" or "the Company") has made provision for impairment of assets with possible asset impairment losses and credit impairment losses in the first three quarters of 2022. The relevant information is hereby announced as follows:
1、 Overview of the provision for asset impairment
（1） Reasons for provision for asset impairment
In order to truly and accurately reflect the financial situation of the Company as of September 30, 2022, in accordance with the Accounting Standards for Business Enterprises, the Self regulatory Guidance for Listed Companies of Shenzhen Stock Exchange No. 1 - Standard Operation of Main Board Listed Companies, the Listing Rules of Shenzhen Stock Exchange and other relevant provisions, Based on the principle of prudence, the Company and its subsidiaries conducted a comprehensive inspection and impairment test on various assets within the scope of the consolidated statements as of September 30, 2022, and accrued corresponding impairment reserves for assets that may suffer impairment losses.
（2） The scope of assets, total amount and reporting period to be included in the provision for asset impairment
After the Company and its subsidiaries carried out a comprehensive inventory and asset impairment test on the assets with possible signs of impairment as of September 30, 2022, including notes receivable, accounts receivable, contract assets and other receivables, the provision for impairment of various assets in the first three quarters of 2022 in this period totaled 43825356.03 yuan, accounting for 12.08% of the Company's audited net profits attributable to shareholders of listed companies in 2021, Details are as follows:
Accrued amount in the first three quarters of 2022 (yuan)
1. Credit impairment loss
Including: bad debt loss of accounts receivable
Bad debt loss of other receivables
2. Asset impairment loss
Including: inventory falling price loss
Goodwill impairment loss
The reporting period of this provision for asset impairment is from January 1, 2022 to September 30, 2022.
2、 Basis for provision for asset impairment this time
（1） Inventory falling price reserves
For physical inventories, they are measured at the lower of cost and net realizable value on the balance sheet date, and the inventory falling price reserves are accrued according to individual inventory items. However, for inventories with large quantities and low unit prices, the inventory falling price reserves are accrued according to the inventory category. For inventories that are related to product series produced and sold in the same region, have the same or similar end use or purpose, and are difficult to be measured separately from other items, inventory falling price reserves can be accrued on a consolidated basis. For the film and television works that are still under development and production, the recoverable amount and signs of impairment shall be judged according to the project theme, development progress, stock age, policy guidance, intended sales and other factors; For the released film and television works, the recoverable amount and signs of impairment shall be judged according to the current year's sales and future expected sales. If the recoverable amount of the above film and television works is lower than their book value, the asset impairment provision shall be recognized according to the difference and included in the current profits and losses.
（2） Provision for impairment of goodwill
For the purpose of goodwill impairment test, it is necessary to divide the overall goodwill into two parts: core goodwill and goodwill formed by recognizing deferred income tax liabilities. Core goodwill should be treated according to the general requirements of goodwill impairment test; For the goodwill formed due to the recognition of deferred income tax liabilities, the income tax expense will be reduced with the reversal of deferred income tax liabilities, and the recoverable amount of this part of goodwill is essentially the reduced amount of future income tax expense. With the reversal of deferred income tax liabilities, the amount that can reduce future income tax expenses will also decrease, resulting in the recoverable amount being less than the book value. Therefore, the goodwill impairment reserves of the same amount should be gradually withdrawn for the deferred income tax liabilities reversed in each period.
（3） Provision for credit impairment
The Company estimates the expected credit losses of financial assets measured at amortized cost, financial assets (debt instruments) measured at fair value with changes included in other comprehensive income, financial guarantee contracts, etc. in a single or combined manner. The Company takes into account reasonable and based information such as past events, current conditions and forecasts of future economic conditions, calculates the probability weighted amount of the present value of the difference between the cash flow receivable under the contract and the expected cash flow to be received, with the risk of default as the weight, and recognizes the expected credit loss.
If the credit risk of the financial instrument has increased significantly since the initial recognition, the Company shall measure its loss reserves in accordance with the amount equivalent to the expected credit loss of the financial instrument throughout its duration; If the credit risk of the financial instrument has not increased significantly since the initial recognition, the Company will measure its loss reserves according to the amount equivalent to the expected credit loss of the financial instrument in the next 12 months. The amount of increase or reversal of loss reserves arising therefrom shall be included in the current profits and losses as impairment losses or gains. By comparing the risk of default of financial instruments on the balance sheet date with the risk of default on the initial recognition date, the Company determines the relative change of default risk within the expected duration of financial instruments to assess whether the credit risk of financial instruments has increased significantly since the initial recognition. Generally, if the overdue period exceeds 30 days, the Company will consider that the credit risk of the financial instrument has increased significantly, unless there is conclusive evidence proving that the credit risk of the financial instrument has not increased significantly since the initial recognition. If the credit risk of a financial instrument on the balance sheet date is low, the Company considers that the credit risk of the financial instrument has not increased significantly since initial recognition. If there is objective evidence indicating that a financial asset has suffered from credit impairment, the Company shall make provision for impairment of the financial asset on a single basis. For the receivables and contract assets formed by the transactions regulated in the Accounting Standards for Business Enterprises No. 14 - Revenue (2017), regardless of whether they contain significant financing elements, the Company always measures its loss reserves at the amount equivalent to the expected credit loss in the entire duration. If the Company no longer reasonably expects that the contractual cash flow of financial assets can be fully or partially recovered, the book balance of the financial assets shall be directly written down.
3、 The impact of the provision for asset impairment on the Company
The amount of the Company's provision for asset impairment this time totaled 43825356.03 yuan, which reduced the Company's total consolidated profits from January to September 2022 by 43825356.03 yuan, and has been included in the Company's consolidated financial report for the first three quarters of 2022. After the provision for asset impairment was made, the total profit in the consolidated statements of the Company in the first three quarters of 2022 was 126,908,633.01 yuan, and the net profit attributable to shareholders of the listed company was 85,206,966.56 yuan, and the owner's equity attributable to the parent company was reduced accordingly.
The Company's provision for impairment this time is the accounting data of the financial department of the Company, which has not been audited by the accounting firm. The specific results shall be subject to the annual audit confirmation of the accountant. Investors should pay attention to investment risks.
4、 Explanation on rationality of provision for asset impairment
The Company's provision for asset impairment this time complies with the Accounting Standards for Business Enterprises, the Self regulatory Guidance for Listed Companies of Shenzhen Stock Exchange No. 1 - Standardized Operation of Main Board Listed Companies, and the relevant provisions of accounting policies and accounting estimates. Based on the principle of prudence, the Company makes provision for asset impairment that may cause asset impairment losses, and the provision for asset impairment fairly reflects the Company's financial status The asset value and operating results make the accounting information of the Company more reasonable, without damaging the interests of the Company and all shareholders.