VIP Class Notes (Jesse) [W]

i have a great memory of the game

a bad news – some bad news 

concise (short, simple, easily understood) < > convoluted (needlessly complex and long)

complex / complicated – intricate < > over-simplified 

As you know, the purpose of our Accounting Report is to provide the client with the GBJ Financial Statements based on the accrual principle, making the relevant adjustments to the Financial Statement based on cash principle provided us by the company. As far as I know, the client has not request us to reclassify the Financial Statements according to the IFRS.
For this reason, I would suggest to include in our Report at paragraph V. the Financial Statements included in the report provided by Mr P, keeping only the columns “Period End” “adjustments” and “period end reports” that you find in the balance sheet and replicating the same columns in the Profit&Loss. Then, it will be Dr. P who will make further adjustments in order to adapt the Financial statements to the IFRS rules.
As per your indications, GBJ has three different sources of income.
With regard to the accounting records of these revenues and related costs, adopting the accrual basis, I would suggest you to add the following information to the draft:
1) Sales of spare parts: make the appropriate adjustments by adopting the PRC GAAP. I would report in the introduction part of our report further information concerning how the company recorded such items, what are the PRC GAAP instructions, and how the accounting entries shall be done.
2) Revenues from install and aftersales services: make the appropriate adjustments by adopting the PRC GAAP. I would report in the introduction part of our report the relevant information as above, e.i. point 1).
3) Commissions: the client asked us to pay particular attention to these intercompany transactions and asked us for the commissions to be recorded according to the percentage of completion that the IMS and GSW companies adopt for recording the revenues and relative costs of the machinery being sold that is the source of the commissions . Therefore, the registration shall not follow the billing and payment terms indicated in the sales agreement signed between IMS / GWS and the Chinese ultimate customer. Also for this Financial statement item, I would like to add in the introduction part of our Report an indication of how the Chinese company operated, what are the PRC GAAP requirements, and what adjustments were necessary. Mr. P will provide us by Friday a document containing all the necessary information, with the stage of completion being included, to enable us to make the appropriate adjustments. Every end of the month, indicatively 1 or 2 days before our deadline, we should receive that file from both IMS and GSW.
The data that you can find in the column “Beginning FINALE 2017 IFRS” refer to 31/12/2017, Mr. P will give us more details about that. Mr P reclassifies the Financial statements according to the IFRS rules once per year in December, thus he cannot provide us with the relevant data for the month of April and May.
Regarding the deadline of October 4th , which falls during Chinese public holidays, Dr. P asked, if possible, to provide the report by the end of September. As you have noticed, he has already asked Jesse to bring forward the financial statements for the month of September by September 25th. Information about the percentage of completion will also be made available in advance.

As you know, the purpose of our Accounting Report is to provide the client with the GBJ Financial Statements based on the accrual principle, making the relevant adjustments to the Financial Statement based on cash principle provided to us by the company. As far as I know, the client has not requested us to reclassify the Financial Statements according to the IFRS.
For this reason, I would suggest to include, in our Report at paragraph V, the Financial Statements included in the report provided by Mr P, keeping only the columns “Period End” “adjustments” and “period end reports” in the balance sheet and replicating the same columns in the Profit&Loss. Then, it will be Dr. P who will make further adjustments in order to adapt the Financial statements to the IFRS rules.
As per your indications, GBJ has three different sources of income.
With regard to the accounting records of these revenues and related costs, adopting the accrual basis, I would suggest you to add the following information to the draft:
1) Sales of spare parts: make the appropriate adjustments by adopting the PRC GAAP. I would report in the introduction part of our report further information concerning how the company recorded such items, what the PRC GAAP instructions are, and how the accounting entries shall be done.
2) Revenues from install and aftersales services: make the appropriate adjustments by adopting the PRC GAAP. I would report in the introduction part of our report the relevant information as above, ie. point 1).
3) Commissions: the client asked us to pay particular attention to these inter-company transactions and asked us for the commissions to be recorded / asking for us to record the commissions according to the percentage of completion adopted by the IMS & GSW companies for the purpose of recording the revenues & related costs of the machinery being sold, with this being the source of the commissions . Therefore, the registration shall not follow the billing and payment terms indicated in the sales agreement signed between IMS / GWS and the Chinese ultimate customer. Also for this Financial statement item, I would like to add in the introduction part of our Report an indication of how the Chinese company operated, what the PRC GAAP requirements are, and what adjustments were necessary.

Mr. P will (,by Friday,) provide us a document containing all the necessary information by Friday, with the stage of completion being included, to enable us to make the appropriate adjustments. Ideally, at least 2 days before our deadline, we should receive that file from both IMS and GSW.
The data in the column “Beginning FINALE 2017 IFRS” refers to 31/12/2017, Mr. P will give us more details about that. Mr P reclassifies the Financial statements according to the IFRS rules once per year in December, thus he cannot provide us with the relevant data for the months of April and May.
Regarding the deadline of October 4th , which falls during Chinese public holidays, Dr. P asked, if possible, to provide the report by the end of September. As you have noticed, he has already asked Jesse to bring forward the financial statements for the month of September by September 25th. Information about the percentage of completion will also be made available in advance.