image_1.pngCopyright©2024 Yonyou Group All Rights Reserved.Without the written permission of Yonyou Group, no part of this user manual may be copied, reproduced, translated, or reduced for any purpose. The content of this user manual may change without notice, please stay informed.Please note: The content of this user manual does not represent any commitments made by Yonyou Network.GlossaryLong-term Equity InvestmentRefers to the equity investments made by the investor to exert control or significant influence over the invested entity, as well as equity investments in its joint ventures. "Accounting Standard for Business Enterprises No. 2 - Long-term Equity Investments."Consolidated Financial StatementsThis refers to the financial statements prepared by the parent company, which consolidate the parent and subsidiary companies into a single accounting entity, reflecting the overall financial status, operating results, and cash flows of the corporate group. The parent company is defined as a business that has one or more subsidiaries; a subsidiary is a business controlled by the parent company. The parent company must be a holding company that is legally registered and has obtained corporate legal person status.Statutory MergerBased on the management needs of external institutions, the consolidation process is carried out in strict accordance with relevant accounting laws and regulations, according to the equity investment relationship between the parent and subsidiary companies, with the aim of completing the external financial accounting statements.Management MergerThe process of consolidation according to various levels such as business scope, profit center, industry, region, or division, for the needs of group or internal company management.Full ConsolidationPrepare consolidated financial statements by merging the accounting statement items of the parent company and the subsidiary, offsetting the parent company's investment income against the subsidiary's profit distribution items, and eliminating internal transactions. In a full consolidation, the long-term equity investment account of the parent company is not listed as a separate item on the consolidated balance sheet but is replaced by all the assets and liabilities of the subsidiary; in the consolidated income statement, the parent company's investment income account is also not listed as a separate item but is replaced by all the revenues and expenses of the subsidiary. If it is a non-wholly-owned subsidiary, the minority interest is recognized accordingly in the consolidated income statement.Proportionate ConsolidationIn contrast to full consolidation, the reporting procedure involves incorporating the assets, liabilities, income, and expenses of the investee into the financial statements of the investor based on the proportion of equity investment in the investee. That is, income and expenses are incorporated into the investor's income statement in proportion to the equity investment, while investment income is offset against the corresponding incorporated income and expenses; assets and liabilities are also incorporated into the investor's balance sheet in proportion to the equity investment, with long-term equity investments being offset against the incorporated assets and liabilities. (HK-GAAP, IFRS-GAAP)Adjustment VoucherThat is to adjust the individual reports or the consolidated reports of the lower-level entities into a format recognized for consolidated reports. Adjustments include various scenarios: adjustments where the accounting policies of subsidiaries are consistent with those of the parent company, adjustments from the cost method to the equity method, reclassification adjustments, etc.Offset VoucherConsolidation elimination refers to the process where the parent company, when preparing consolidated financial statements, offsets the effects of internal transactions between the parent company and its subsidiaries, as well as between subsidiaries, on the individual financial statements of the parent and subsidiaries against the effects on the related items in the consolidated financial statements. The accounting entries prepared by the parent company during the consolidation elimination process are referred to as consolidation elimination vouchers.ControlIt refers to the investor having power over the investee, enjoying variable returns by participating in relevant activities of the investee, and having the ability to influence the amount of returns through the power over the investee. "Accounting Standard for Business Enterprises No. 33 - Consolidated Financial Statements"Parent CompanyRefers to controlling one or more entities (including enterprises, separable parts of invested units, and structured entities controlled by the enterprise, hereinafter the same). "Accounting Standard for Business Enterprises No. 33 - Consolidated Financial Statements"SubsidiaryRefers to entities controlled by the parent company. "Accounting Standard for Business Enterprises No. 33 - Consolidated Financial Statements"; if the investor can exercise control over the invested entity, the invested entity is a subsidiary of the investor. "Accounting Standard for Business Enterprises No. 2 - Long-term Equity Investments"Significant ImpactIt refers to the investor's power to participate in the decision-making of the financial and operational policies of the invested entity, but does not have the ability to control or jointly control the formulation of these policies with other parties. "Accounting Standard for Business Enterprises No. 2 - Long-term Equity Investments."Associated CompaniesSignificant influence over an enterprise, but not a subsidiary and not a joint venture (IAS 28).Joint VentureIt refers to an arrangement that is jointly controlled by two or more parties, and the company formed from the joint arrangement is called a joint venture (JV). "Enterprise Accounting Standard No. 40 - Joint Arrangements."DimensionThe perspective of viewing things refers to the specific classification of multiple interpretations of consolidated subjects or indicators. A consolidated subject or indicator can be interpreted from multiple dimensions.Dimension MemberSpecific members of each dimension.HierarchyThe hierarchical relationship between dimension members.PropertyUsed to describe the characteristics of dimension members. The purpose of attributes: member queries, filtering members in input tables and reports, and filtering in business rules, etc.MergerA virtual entity used to store the results of each level of consolidation in the consolidation system.MonomerRefers to all legal entities and organizations involved in the merger.FormThe medium used by users to input and view data.OverviewConsolidated financial statements, as financial reports, must comply with the general principles and basic requirements for financial statement preparation. These basic requirements include authenticity and reliability, completeness of content, and materiality. In addition to adhering to the general principles and requirements for financial statement preparation, the preparation of consolidated financial statements should also follow the principle of unity, which means that consolidated financial statements reflect the financial position, operating results, and cash flows of a corporate group composed of multiple entities. When preparing consolidated financial statements, the parent company and all subsidiaries should be viewed as a whole, treated as a single accounting entity, and the business activities of the parent company and subsidiaries should be considered from the perspective of the corporate group as a whole, including the judgment of project materiality. In the preparation of consolidated financial statements, economic transactions between the parent company and subsidiaries, as well as between subsidiaries, should be treated as internal transactions of the same accounting entity, which do not affect the financial position, operating results, and cash flows of the consolidated financial statements. Additionally, for certain special transactions, if the recognition and measurement from the perspective of the corporate group differ from those in the individual financial statements, adjustments should be made from the perspective of the corporate group for the same transaction or matter. The application goal of consolidated financial statements is:Quickly prepare consolidated financial statements that comply with financial reporting disclosure requirements:1) Quickly generate the main consolidated financial statements;2) Quickly generate the notes and detailed tables for the consolidated financial statements.Minimize manual processing operations to achieve automation of the reporting process:image_2.png1) Support rapid collection and data validation from multiple sources;2) Support multiple currencies and automatic conversion of foreign currencies in complex scenarios;3) Support automatic offsetting of transactions such as inter-company sales, receivables, and dividend distribution;4) Support various types of investment offsetting and automatic calculation of minority interests;5) Enable monitoring of the collection status of individual reports and the consolidation process.Application ValueThe same financial organization can establish multiple accounting ledgers according to different reporting requirements. The accounting subjects, functional currencies, and accounting periods of each accounting ledger can differ to meet the accounting requirements for overseas listings and the establishment of overseas branch offices by group enterprises.Multi-organization merger support: Supports the establishment of a "statutory merger" structure based on equity relationships according to the needs of the enterprise, and also allows for the setting of a "management merger" structure by region or business segment;Support for organizational structure changes: Support management of organizational structure and equity relationships by period, especially after changes occur in the organizational structure and equity relationships, the system can maximize automatic processing.Quickly and accurately collect and verify individual subsidiary report data and report notes;Supports data collection through various methods such as data integration tools, manual entry, and CSV import;Support ensuring data quality by defining validation rules;Provide an internal transaction reconciliation platform that supports both standalone company accounting and consolidated accounting for internal transaction reconciliation.Support for Financial Statement Consolidation Methods:Support consolidation through "equity method adjustments";Support mergers based on the "cost method";According to the requirements of accounting standards, support the setting of different conversion methods for different report items, and during the consolidation process, the system automatically performs the conversion processing for foreign currency reports.Support for various adjustmentsSupport for Audit Adjustments: Based on the characteristics of annual audits (the audit report for the previous year may only be issued in March or April, while the reports for January and February have already been released), there is a complete support plan for data processing before and after audit adjustments. It supports adjustments before consolidation as well as adjustments after consolidation;Support pre-adjustment and post-adjustment for conversion;Support automatic equity method adjustments;and supports the classification, tracking, and inquiry of various adjustments;Supports Excel client, meeting users' various output and presentation needs.Application ScenariosScenario 1: Multi-...
