Section 3 Loans and Receivables
[Classic Example 1]
On January 1, 2008, a commercial bank issued a loan to Company A 80 million yuan, Company A actually received 75.14 million yuan, the annual interest rate of the loan contract is 10, the term is 4 years, the interest is charged annually, and Company A repays the principal in one lump sum upon maturity. The commercial bank divided it into loans and receivables, assuming that the actual interest rate determined when the loan was initially recognized was 12.
On December 31, 2009, there was objective evidence that Company A had serious financial problems. Difficulty, the commercial bank determined that the loan to Company A was impaired based on this, and expected to receive RMB 3 million in interest on December 31, 2010, and RMB 50 million in principal on December 31, 2011.
On December 31, 2010, the commercial bank expected that the original cash flow estimate would not change, but the actual interest received that year was 2 million yuan.
On December 31, 2011, the commercial bank negotiated with Company A and finally recovered the loan of 60 million yuan, assuming that other factors were not considered (the calculation results retained two significant figures).
Requirement: Prepare relevant accounting entries based on the above information.
[Answer to Example 1]
(1) Loan issued on January 1, 2008:
Borrow: Loan - principal 8,000
Loans: deposits with the central bank, etc. 7514
Loans - interest adjustment 486
Amortized cost = 8000-486 = 7514 (10,000 yuan)
(2) Loan interest confirmed and received on December 31, 2008:
Debit: interest receivable 800 (8000×10)
Loan - interest adjustment 101.68
p>Loan: Interest income 901.68 (7514×12)
Debit: 800 deposited with banks, etc.
Loan: Interest receivable 800
Amortized Cost = 7514 901.68-800 = 7615.68 (10,000 yuan)
(3) On December 31, 2009, loan interest was confirmed:
Borrow: interest receivable 800 (8000×10 )
Loan - interest adjustment 113.88
Loan: interest income 913.88 (7615.68×12)
Amortized cost of loan before provision for loan losses =7615.68 913.88=8529.56 (10,000 yuan). On December 31, 2009, the present value of the cash flow that the commercial bank expects to receive from the loan from Enterprise A is calculated as follows:
300/(1 12) 5000/ (1 12)^2=4253.83 (10,000 yuan)
Loan impairment loss should be recognized=8529.56-4253.83=4275.73 (10,000 yuan)
Debit: Asset impairment loss 4275.73
Loan: Loan loss provision 4275.73
Debit: Loan - impaired 8529.56
- Interest adjustment 270.44 (486-101.68-113.88)
Loan: Loan - principal 8,000
Interest receivable 800
After confirming the impairment loss, the amortized cost of the loan = 8529.56-4275.73 = 4253.83 (10,000 yuan )
(4) On December 31, 2010, interest income was recognized and interest received:
Debit: loan loss provision 510.46
Loan: interest income 510.46 (4253.83×12)
Debit: 200 deposited with banks, etc.
Loan: Loan - impaired 200
Before accruing loan loss provisions, the loan Amortized cost = 4253.83 510.46-200 = 4564.29 (10,000 yuan). On December 31, 2010, the commercial bank expected that the original cash flow estimate would not change, so the present value of the cash flow received from Company A is calculated as follows: 5000/(1 12) = 4464.29 (10,000 yuan)
Accrued loan loss provision = 4564.29-4464.29=100 (10,000 yuan)
Debit: Asset impairment loss 100
Loan: Loan loss provision 100
After the impairment loss is confirmed, the amortized cost of the loan = 4564.29-100 = 4464.29 (10,000 yuan)
(5 ) On December 31, 2011, loan settlement:
Debit: loan loss provision 535.71 (4464.29×12)
Credit: interest income 535.71
Debit: Deposit with banks, etc. 6,000
Loan loss provision 3,329.56 (4275.73-510.46
100-535.71)
Loan: Loan - Impaired 8329.56 (8529.56-200)
Asset impairment loss 1000
[Classic example 2]
Zhengbao Company was established on January 1, 2008, and began to use the balance percentage method to accrue bad debt provisions, with a provision ratio of 2%. The balance of accounts receivable at the end of 2008 was 8 million yuan; bad debt losses of 200,000 yuan were recognized in February 2009, and 150,000 yuan of accounts receivable that had been treated as bad debt losses were recovered in November 2009. At the end of 2009, the balance of accounts receivable was The balance is 12 million yuan, then the amount of bad debt provisions withdrawn by Zhengbao Company at the end of 2009 is ( ) million yuan.
A.13 B.28 C.8 D. 3
[Answer to Example 2]A
[Answer Analysis] "Bad debt provision" account at the end of 2009 The due balance = 1200 × 2% = 24 (ten thousand yuan), and the amount of bad debt provisions at the end of 2009 = 24 - (800 × 2% - 20 + 15) = 13 (ten thousand yuan).
[Summary and extension of example questions]
1. Example question 1
1. Since the "loan" account is mainly used in financial enterprises and is not very common, so for It is relatively unfamiliar to most students. It is recommended that students refer to the accounting treatment instructions for the "loan" account in the "Appendix - Accounting Accounts and Main Account Processing" of the new standards.
2. The amortization of loans using the actual interest rate method is similar to that of held-to-maturity investments. However, when making provision for impairment, attention should be paid to adjusting the account balance of the principal and interest of the loan at the same time. And the interest receivable and uncollected is transferred to the "Loan - Impaired" account. This is a relatively special treatment. The purpose of this is to facilitate the special management and tracking of impaired loans by financial institutions.
3. After impairment, the interest income recognized on the basis of amortized cost according to the actual interest rate method must be offset by the "loan loss provision". For the interest receivable determined based on the contract principal and contract interest rate, The amount should be registered off-balance sheet.
4. When the present value of the future cash flows of the loan changes, the actual interest rate is not adjusted, but the amortized cost is adjusted. The textbook is the same as the treatment of held-to-maturity investments on this point.
2. Example 2
1. The processing of accounts receivable is basically not covered in the textbooks and is relatively basic content. However, the new standards treat accounts receivable as a financial item. Assets, implying that the era of fair value measurement or amortized cost measurement of receivables as financial assets is not far away, and also reflects the convergence of new enterprise accounting standards and international accounting standards.
2. Provision and accounting ideas for bad debt provisions for accounts receivable
(1) The "bad debt provision" account is the allowance account for assets, and its increase and decrease directions are both Contrary to the accounts receivable account, the book value of accounts receivable = the book balance of accounts receivable - bad debt provision. The greater the bad debt provision, the smaller the book value of accounts receivable will be;
(2) When making provision for bad debts, it is divided into two steps. The first step is to determine the amount, and the second step is to perform relevant accounting.
Step one: Determine the amount.
First of all, you need to understand two concepts: the balance of bad debt provisions at the end of the current period and the amount of bad debt provisions for the current period. The former is the balance that should be reached at the end of the period after calculating the bad debt provision account, while the latter is the amount in the accounting entries when bad debt provision is made in the current period.
Secondly: Master the following formula (i.e., the transformation of the above formula):
Bad debt provision accrued in the current period = Bad debt provision balance calculated based on accounts receivable in the current period - Advance at the end of the period The credit balance of the "Bad Debt Provision" account (or + the debit balance of the "Bad Debt Provision" account)
The balance of bad debt provision calculated based on accounts receivable in the current period = the ending balance of accounts receivable in the current period × by subtracting The bad debt provision accrual ratio determined by the value test
The credit (debit) balance of the "Bad debt provision" account: the actual balance of the "Bad debt provision" account before the provision for bad debts is made.
Step 2: Accounting.
Entry for bad debt provision:
Debit: asset impairment loss
Credit: bad debt provision
Or the opposite entry :
Debit: Bad debt provision
Credit: Asset impairment loss
[Understanding and summary of knowledge points]
1. Loans Measurement:
(1) Initial measurement:
Borrow: loan - principal (the principal amount specified in the loan contract) - interest adjustment ( Difference, or credit)
Credit: deposits received/deposits with the central bank, etc. (actual amount paid)
(2) Subsequent measurement:
1 ) Confirm loan interest income:
Debit: interest receivable (contract principal × contract interest rate)
Credit: interest income (beginning amortized cost × actual interest rate)
Loan - Interest Adjustment (Difference, or Debit)
[Note] If the difference between the contract interest rate and the actual interest rate is small, the contract interest rate can also be used to calculate the interest income.
2) Loan interest received:
Debit: absorb deposits/deposit central funds/deposit with banks
Loan: interest receivable
3) On the balance sheet date, loan impairment losses are recognized:
Debit: asset impairment losses
Credit: loan loss provisions
At the same time:
p>
Debit: Loan - Impaired
Credit: Loan - Principal
- Interest adjustment (or debit)
Interest receivable (if there is receivable and uncollected interest)
4) Interest income is recognized based on the amortized cost according to the actual interest rate method:
Debit: Loan loss provision
p>Credit: Interest income (beginning amortized cost × actual interest rate)
[Note] At this time, the interest receivable determined by the calculation of "contract principal × contract interest rate" should be registered off-balance sheet , no confirmation is required.
Debit: Deposits from banks, etc. (principal or interest received after impairment)
Credit: Loans - impaired
Debit: Asset reduction Loss of value (amortized cost – present value of future cash flows)
Loan: Loan loss provision
[Note] There is no need to adjust the principal and interest when subsequently accruing impairment. Transfer to "Loan - Impaired" because it has already been processed in the first period of impairment.
5) Loans that are truly irrecoverable will be written off as bad debts after approval according to management authority:
Debit: Loan loss provision
Loan: Loan ——Impaired
At the same time, the interest receivable and uncollected registered off-balance sheet will be written off after approval according to management authority, and the amount of "interest receivable and uncollected" off-balance sheet will be reduced.
6) Loans that have been confirmed and written off are later recovered:
Debit: Loan - Impaired (the balance of the impaired loan that was originally written off)
Loan: loan loss provision
Debit: deposits from deposits/deposits from banks, etc. (actual amount received)
Loan: loan - impaired
Asset impairment loss (difference, or debit)
2. For accounts receivable, the general enterprise’s claims receivable arising from the sale of goods or provision of services should usually be paid from the purchaser. The contract or agreement price receivable is regarded as the initial recognition amount. When an enterprise recovers or disposes of receivables, the difference between the price obtained and the book value of the receivables shall be included in the current profits and losses.
3. The main difference between financial assets classified as loans and receivables and financial assets classified as held-to-maturity investments is that the former are not financial assets quoted in active markets. , and are not subject to as many restrictions on sale or reclassification as held-to-maturity investments.
Regarding the recognition of asset impairment losses, for loans, when impairment is recognized, the interest receivable and uncollected must be recorded in the amortized cost before impairment. This processing difference Treatment of amortized cost of held-to-maturity investments. Financial companies consider the risk of receivable and uncollected interest out of prudence and consider the receivable and uncollected interest as part of the amortized cost before impairment. This is consistent with the treatment of held-to-maturity investments. different.
4. Accounting treatment of bad debt provisions
This is relatively basic content. Some students may not be very impressed. Let’s summarize it here:
1) Provision for bad debts:
Debit: asset impairment loss
Credit: provision for bad debts
2) Bad debt losses:
Debit: bad debt provision
Credit: accounts receivable
3) Recovery of bad debts that have been written off:
Debit: accounts receivable
p>Credit: bad debt provision
Debit: bank deposits
Credit: accounts receivable
Or consolidated into:
Debit: bank deposits
Credit: provision for bad debts
4) Offset the provision for bad debts:
Debit: provision for bad debts
Loan: Asset impairment loss
[Easy to make mistakes]
1. Several important entries:
(1) Confirmation of impairment In the event of a loss, all loan principal, interest adjustments, and receivable and uncollected interest will be transferred to "Loan - Impaired":
Debit: Asset impairment loss
Credit: Provision for loan losses
At the same time:
Debit: Loan - Impaired
Credit: Loan - Principal
—— Interest adjustment (or debit)
Interest receivable (if there is interest receivable and uncollected)
(2) Based on the amortized cost at the beginning of each period based on the actual interest rate method Recognition of interest income:
Debit: loan loss provision
Credit: interest income (beginning amortized cost × actual interest rate)
(3) After impairment , when the principal or interest is received:
Debit: deposit with banks, etc. (principal or interest received after impairment)
Credit: loan—impaired
p>2. Discount of bills receivable
(1) With recourse rights
For discounts of bills receivable with recourse rights, the discount amount should be treated as a short-term For borrowings, discount interest is amortized using the actual interest rate method during the bill discount period and is recognized as interest expense.
Borrow: bank deposit (actual discount amount received)
Short-term borrowing - interest adjustment (discount interest)
Loan: short-term borrowing - cost (face value of notes receivable)
(2) No recourse
Debit: bank deposit (actual discount amount received)
Financial expenses ( Discount interest)
Bad debt provision (if there is a provision for bad debt)
Non-operating expenses (if there is a sale profit or loss)
Credit: Notes receivable ( Face value of notes receivable)