Supplementary Notice of the Ministry of Finance on Issues Concerning the Asset Evaluation Accounting on the Appreciation and Depreciation of Assets Invested Overseas by Foreign-Invested Enterprises

财政部关于外商投资企业对外投资资产评估增减值财务处理问题的补充通知

Promulgating Institution: Ministry of Finance

Document Number: Cai Qi [2004] No. 134

Promulgating Date: 08/10/2004

Effective Date: 08/10/2004

颁布机关: 财政部

文   号: 财企[2004]134号

颁布时间: 08/10/2004

实施时间: 08/10/2004

To the finance bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the State plan:

After the issuance of the Notice of the Ministry of Finance on Issues Concerning the Asset Evaluation Accounting on the Appreciation and Depreciation of Assets Invested Overseas by Foreign-Invested Enterprises (Doc. No.: Cai Qi [2003] No. 181), some local authorities and enterprises responded that the Notice is not clear as to whether the undistributed profits for the previous years that are generated from the appreciation of evaluated assets invested overseas by foreign-invested enterprises ("FIEs") can continue to be used to pay dividends to shareholders, which is in relatively serious discrepancy in the implementation of the Notice. In order to benefit the stable and healthy development of FIEs and safeguard the long-term interests of the Chinese and foreign parties, we hereby make further clarifications as follows:

  各省、自治区、直辖市、计划单列市财政厅(局):

  《财政部关于外商投资企业对外投资资产评估增减值财务处理问题的通知》(财企〔2003〕181号)下发以后,有些地方、企业反映,外商投资企业对外投资资产评估增值形成的以前年度未分配利润是否可以继续用于股东分红不明确,在执行中存在较大的争议。为了有利于外商投资企业稳健发展,维护中外各方的长期利益,现进一步明确如下:

1. Like the balance of appreciation of evaluated assets that has yet to be amortized and is regarded as profits, the undistributed profits for previous years that are generated from the appreciation of evaluated assets invested overseas by FIEs shall no longer be used to pay dividends to shareholders, and both such balance of appreciation and undistributed profits shall be converted into capital reserves.

After the issuance and implementation of the Notice mentioned in the first paragraph hereof, if an FIE has already converted into profits any appreciation of evaluated assets invested overseas by that FIE for previous years and distributed the profits, such conversion and distribution will not subject to retroactive adjustment.

    一、外商投资企业对外投资资产评估增值形成的以前年度未分配利润,连同尚未摊销转入利润的资产评估增值余额,不再用于股东分红,全部转作资本公积金。

  在《财政部关于外商投资企业对外投资资产评估增减值财务处理问题的通知》(财企〔2003〕181号)下发执行以后,外商投资企业已将以前年度对外投资资产评估增值转作利润并已分配的,不再追溯调整。

2. The shareholders of the Chinese and foreign parties of an FIE are entitled by the law to claim for profit distribution from the FIE. However, they shall comply with laws, administrative regulations and relevant provisions of the State Council's finance department, and shall conduct sufficient consultation, when deciding on the FIE's profit distribution plans.

    二、中外各方股东依法有权要求企业分配利润,但在决定企业利润分配方案时,应当遵循法律、行政法规和国务院财政部门的有关规定,并进行充分协商。

3. This Notice shall take effect from the date of promulgation.

Ministry of Finance of the People's Republic of China

August 10, 2004

    三、本通知自发布之日起施行。

中华人民共和国财政部

二○○四年八月十日