Compilation of State-owned Assets Supervision and Administration Policies and Regulations

Author: Policy and Regulations Bureau, State-owned Assets Supervision and Administration Commission of the State Council / Country:
Publisher:
Publishing Time: 2004-08-01
Features: Article 12: The asset evaluation of state-owned assets shall be carried out in the following procedures: (1) application for project establishment; (2) asset inventory; (3) appraisal and estimation; (4) verification and confirmation. Article 13: The occupying units that carry out asset evaluation in accordance with Article 3 and Article 4 of this Measures shall, after approval by their competent authorities, submit an application for asset evaluation project establishment to the competent authorities of state-owned assets at the same level, and attach a property directory and relevant financial statements and other materials. Authorized or commissioned by the competent authorities of state-owned assets, the competent authorities of the occupying units may approve the application for asset evaluation project establishment. Article 14: The competent authorities of state-owned assets shall review the application for asset evaluation project establishment within ten days upon receipt and make a decision on whether to approve the project establishment, notifying the applying unit and its competent authorities. Article 15: The State Council's decision to carry out asset evaluation of the whole country or a specific industry shall be deemed as approval of the asset evaluation project establishment. Article 16: After receiving the notice of approval of asset evaluation project establishment, the applying unit may entrust an asset evaluation institution to evaluate the assets. Article 17: The asset evaluation institution entrusted by the occupying unit shall, on the basis of a comprehensive inventory of the assets, debts, and liabilities of the entrusted unit, verify whether the asset accounts are consistent with the actual situation and whether the business results are true, and make a determination accordingly. Article 18: The asset evaluation institution entrusted by the occupying unit shall, in accordance with the provisions of this Measures, appraise and estimate the value of the assets to be evaluated and submit an asset evaluation result report to the entrusted unit. After receiving the asset evaluation result report from the asset evaluation institution, the entrusted unit shall report it to its competent authority for review; upon approval by the competent authority, it shall be confirmed by the competent authorities of state-owned assets at the same level. Authorized or commissioned by the competent authorities of state-owned assets, the competent authorities of the occupying units may confirm the asset evaluation result. Article 19: The competent authorities of state-owned assets shall organize review, verification, and negotiation to confirm the asset evaluation result within 45 days upon receipt of the asset evaluation result report submitted by the occupying unit and issue a confirmation notice. Article 20: If the occupying unit has objections to the confirmation notice, it may apply to the competent authorities of state-owned assets at the next higher level for reconsideration within 15 days upon receipt of the notice. The competent authorities of state-owned assets at the next higher level shall make a ruling within 30 days upon receipt of the reconsideration application and issue a ruling notice. Article 21: After receiving the confirmation notice or ruling notice, the occupying unit shall make accounting treatment in accordance with the relevant financial and accounting systems of the state. With the gradual improvement of China's market economy system and China's accession to the World Trade Organization, in order to further transform government functions, reduce unnecessary administrative approvals, and promote the independence, objectivity, and fairness of intermediaries and practitioners, the following opinions are proposed on reforming the administrative methods of state-owned assets evaluation management and strengthening the supervision and management of asset evaluation work: I. Abolish the approval system for the establishment and confirmation of state-owned assets evaluation projects by government departments, and implement the approval system and filing system. Financial (or state-owned assets management, the same below) departments at all levels shall no longer issue approval for the establishment of state-owned assets evaluation projects or confirmation of evaluation reports (compliance review). The asset evaluation activities of economic behavior shall be independently conducted by state-owned asset occupying units in accordance with the relevant laws and regulations, hiring intermediaries with corresponding qualifications. The legal liability of the evaluation report shall be jointly borne by the certified asset appraiser who signed it and the appraisal institution where he/she works. The state-owned assets evaluation projects of major economic projects involving changes in state-owned assets equity, foreign investment, and other economic behaviors approved by various levels of governments shall implement the approval system. For major economic projects implemented by the State Council, the evaluation report shall be approved by the Ministry of Finance; for major economic projects implemented by provincial-level people's governments, the evaluation report shall be approved by the provincial-level financial department. For other state-owned assets evaluation projects, the filing system shall be implemented. Except for approved projects, the asset evaluation projects of central-level state-owned assets shall be filed with the Ministry of Finance or the central-level state-owned asset management groups and relevant departments of the State Council. The filing work of local state-owned assets evaluation projects shall be carried out in accordance with the above principles. II. Strengthen the supervision and management of asset evaluation activities Asset evaluation is an important means to maintain the order of the socialist market economy, promote fair transactions, and prevent the loss of state-owned assets. When occupying units engage in actions such as corporate restructuring, foreign investment, mergers, divisions, liquidation, changes in equity ratio, equity transfer, asset auction, leasing, litigation involving assets, and other actions affecting state-owned interests, they must comply with the requirements of the current national laws and regulations, independently hire intermediaries for asset evaluation, and shall not intentionally or on pretext avoid the evaluation procedures, nor resort to false practices or seize state-owned assets through evaluation activities. Various types of intermediaries engaged in asset evaluation shall strictly adhere to the evaluation procedures, methods, and standards stipulated by the relevant national laws and regulations, carry out asset evaluation independently, objectively, and fairly, and shall not engage in violations or issue false evaluation reports. Financial departments at all levels shall conscientiously fulfill their responsibilities, strengthen the supervision and management of asset evaluation activities, strictly regulate the behavior of all relevant parties in asset evaluation activities, and guide occupying units to reasonably use the evaluation results. Serious penalties shall be imposed on actions that use evaluation activities for false practices or infringe on state-owned assets, and violations by evaluation institutions and practitioners shall be severely punished. III. Improve the system construction and regulate the evaluation order The reform of the administrative methods of asset evaluation management is complex and involves a wide range of aspects. All regions and departments must attach great importance to it, actively support it, and ensure the smooth progress of this reform. Financial departments at all levels must genuinely change their work methods, strengthen the construction of laws and regulations and systems for asset evaluation management. The Ministry of Finance shall formulate relevant supporting measures as soon as possible, establish approval, filing, and spot-check systems for evaluation projects, improve the asset evaluation standards system, strengthen the penalty system for violations, and further regulate evaluation procedures and professional practices. For new situations and problems that arise in the work, it is necessary to conduct serious research and investigation, summarize experience in a timely manner, and formulate corresponding policies and systems to ensure the healthy and orderly development of state-owned assets evaluation work. Notification of the Ministry of Finance on Issuing the "Interim Provisions on the Basic Content and Format of Asset Evaluation Reports" (March 2, 1999,[1999]91) Provinces, autonomous regions, municipalities directly under the Central Government, and planned cities, State-owned Assets Supervision and Administration Commissions (offices), Xinjiang Production and Construction Corps, and relevant ministries and departments of the State Council, and directly under the State Council: In order to further promote the development of China's asset evaluation work, improve the professional level of the asset evaluation industry, regulate asset evaluation practices, and improve the procedures and review standards of asset evaluation work, we have formulated the "Interim Provisions on the Basic Content and Format of Asset Evaluation Reports," which are now issued to you for implementation. Please report relevant issues encountered during implementation to our department in a timely manner. Interim Provisions on the Basic Content and Format of Asset Evaluation Reports General Provisions Basic Content and Format I Asset Evaluation Report 1. Overview 2. Cover and Table of Contents of the Asset Evaluation Report 3. Summary of the Asset Evaluation Report 4. Main Body of the Asset Evaluation Report 5. Supporting Documents 6. Binding of the Asset Evaluation Report Basic Content and Format II Asset Evaluation Explanation 1. Basic Requirements for Writing Asset Evaluation Explanation 2. Cover and Table of Contents of the Asset Evaluation Explanation 3. Declaration on the Scope of Use of Asset Evaluation Explanation 4. Explanation on Asset Evaluation Matters 5. Asset Inventory and Verification 6. Explanation on the Basis of Asset Evaluation 7. Technical Explanation of Each Asset and Liability 8. Verification and Validation of the Present Value Method for the Overall Asset Evaluation Income 9. Evaluation Conclusion and Analysis Basic Content and Format III Asset Evaluation Detailed Table 1. Overview 2. Sample of Asset Evaluation Detailed Table State-owned Assets Evaluation Project Approval Management Measures Article I According to the "Opinions of the General Office of the State Council on Reforming the Administrative Methods of State-owned Assets Evaluation Management and Strengthening the Supervision and Management of Asset Evaluation Work" issued by the Ministry of Finance (Guo Biao Fa [2001] 102), this Measures are formulated. Article II The state-owned assets evaluation projects involving state-owned assets of major economic matters approved by the State Council shall be approved by the Ministry of Finance. The state-owned assets evaluation projects involving state-owned assets of major economic matters approved by provincial-level (including planned cities, the same below) people's governments shall be approved by the provincial-level financial departments (or state-owned assets management departments, the same below). Article III Before entrusting an evaluation institution, the occupying unit (hereinafter referred to as the occupying unit) shall promptly report the progress of the relevant project to the financial department; when necessary, the financial department may track and guide or inspect the project. Article IV The approval work shall be carried out in the following procedures: (1) After receiving the evaluation report from the evaluation institution, the occupying unit shall report it to its group company or relevant department for preliminary review. After preliminary approval by the group company or relevant department, the occupying unit shall submit an application for approval to the financial department two months before the validity period of the evaluation report expires; (2) After receiving the application for approval, the financial department shall complete the review of the evaluation report within 20 working days if it meets the requirements and issue an approval document; if it does not meet the requirements, it shall be returned. When necessary, the financial department may organize relevant experts to participate in the review. Article V When the occupying unit submits an application for approval of the asset evaluation project, it shall submit the following documents to the financial department: (1) A document approved and forwarded by the group company or relevant department for the financial department to approve; (2) Asset Evaluation Project Approval Application Form (Annex II); (3) Economic behavior approval documents or valid materials corresponding to the evaluation purpose; (4) Asset reorganization plan or reform plan, founder agreement, and other materials; (5) Asset evaluation report submitted by the asset evaluation institution (including the asset evaluation report, asset evaluation explanation, and asset evaluation detailed table and disk); (6) Commitment letter of all parties involved in asset evaluation. Article VI The financial department shall mainly review the following aspects: (1) Whether the economic behavior for asset evaluation is legal and approved; (2) Whether the asset evaluation institution has the qualification for evaluation; (3) Whether the main evaluation personnel have the qualification for practice; (4) Whether the selection of the evaluation basis day is appropriate and whether the validity period of the evaluation report is clearly stated; (5) Whether the laws, regulations, and policies used for evaluation are appropriate; (6) Whether the evaluation entrustee has made a commitment on the authenticity and legality of the provided asset ownership certificate, financial and accounting materials, and production and operation management materials; (7) Whether the evaluation process and steps comply with the requirements; (8) Other matters. Article VII Certified asset appraisers and evaluation institutions shall bear legal liability for the asset evaluation reports they issue. Article VIII The financial department shall establish a statistical reporting system for approved evaluation projects. Provincial-level financial departments shall report the statistics of evaluation approved projects in their provinces to the Ministry of Finance within 30 working days after the end of each year. Article IX This Measures shall come into effect from the date of promulgation.