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Article NO. Content

Title:

Accounting Treatment of Securities Borrowing and Lending Transactions by Securities Firms  CH

Amended Date: 2009.08.12
2     II.Presentation of the Financial Statements
  1. Balance Sheet
  2. ┌──────┬─────────────┬┬────────┐
    │Account     │Explanation               ││Amount          │
    ├──────┼─────────────┼┼────────┤
    │Current     │                          ││                │
    │Asset       │                          ││                │
    ├──────┼─────────────┼┼────────┤
    │Refundable  │Original account entry was││XX              │
    │Collateral  │101460 securities lending ││                │
    │for         │collateral, change the    ││                │
    │Securities  │account entry in Chinese. ││                │
    │Lending     │                          ││                │
    ├──────┼─────────────┼┼────────┤
    │Lent        │Add new account 101043 as ││XX              │
    │securities 1│a subsidiary account for  ││                │
    │            │"financial assets held for││                │
    │            │trading - current".       ││                │
    ├──────┼─────────────┼┼────────┤
    │Valuation   │Newly added account 101044││XX              │
    │adjustment  │                          ││                │
    │on lent     │                          ││                │
    │securities  │                          ││                │
    ├──────┼─────────────┼┼────────┤
    │Other       │Existing account 101790,  ││XX              │
    │financial   │e.g.: "dividend           ││                │
    │assets -    │receivable", "securities  ││                │
    │current -   │receivable". Securities   ││                │
    │other       │firms should set up       ││                │
    │            │subsidiary accounts.      ││                │
    ├──────┼─────────────┼┼────────┤
    │Current     │                          ││                │
    │Liabilities │                          ││                │
    ├──────┼─────────────┼┼────────┤
    │Other       │Existing account 201989,  ││XX              │
    │Financial   │e.g.: "dividend payable", ││                │
    │Liabilities │"securities receivable".  ││                │
    │- current - │Securities firms should   ││                │
    │other       │set up subsidiary         ││                │
    │            │accounts.                 ││                │
    ├──────┼─────────────┼┼────────┤
    │Securities  │Newly added account 201340││XX              │
    │lending     │                          ││                │
    │refundable  │                          ││                │
    │deposits    │                          ││                │
    ├──────┼─────────────┼┼────────┤
    │Liabilities │Existing account 201420   ││XX              │
    │on sale of  │(201450)                  ││                │
    │borrowed    │                          ││                │
    │securities -│                          ││                │
    │Hedging     │                          ││                │
    │(non-hedging│                          ││                │
    │)           │                          ││                │
    ├──────┼─────────────┼┼────────┤
    │Valuation   │Existing account 201440   ││XX              │
    │adjustment  │(201470)                  ││                │
    │on          │                          ││                │
    │liabilities │                          ││                │
    │on sale of  │                          ││                │
    │borrowed    │                          ││                │
    │securities  │                          ││                │
    │(Non-hedge) │                          ││                │
    └──────┴─────────────┴┴────────┘
    
    1 "Lent securities" is a subsidiary account under "financial assets held for trading - current". Whether they are "operating securities" or "investment on own funds" can be shown by the format used: format 1 for operating securities and format 3 for other securities. In this way, the applicable limits can be controlled.
  3. Income Statement
  4. ┌──────┬─────────────┬┬────────┐
    │Account     │Explanation               ││Amount          │
    ├──────┼─────────────┼┼────────┤
    │Income and  │                          ││                │
    │Revenue     │                          ││                │
    ├──────┼─────────────┼┼────────┤
    │Revenue from│Newly added account       ││XX              │
    │Securities  │403000, which is revenue  ││                │
    │Lending     │and service fee collected ││                │
    │            │from the borrower by the  ││                │
    │            │lender                    ││                │
    ├──────┼─────────────┼┼────────┤
    │Interest    │Existing account 421000,  ││XX              │
    │income      │borrower makes record     ││                │
    ├──────┼─────────────┼┼────────┤
    │Other non-op│Existing account 440999,  ││XX              │
    │erating     │default penalty collected ││                │
    │revenues and│from the borrower         ││                │
    │gains-other │                          ││                │
    ├──────┼─────────────┼┼────────┤
    │Gains on the│Existing account 421610,  ││XX              │
    │Covering of │borrower makes record     ││                │
    │Securities  │                          ││                │
    │Borrowing   │                          ││                │
    │and Short   │                          ││                │
    │Sales of    │                          ││                │
    │Bonds with  │                          ││                │
    │Reverse     │                          ││                │
    │Repurchase  │                          ││                │
    │Agreements  │                          ││                │
    ├──────┼─────────────┼┼────────┤
    │Gains on    │Existing account 421610,  ││                │
    │Valuation   │borrower makes record     ││                │
    │Price for   │                          ││                │
    │Borrowed    │                          ││                │
    │Securities  │                          ││                │
    │and         │                          ││                │
    │Securities  │                          ││                │
    │Borrowing   │                          ││                │
    │and Short   │                          ││                │
    │Sales of    │                          ││                │
    │Bonds with  │                          ││                │
    │Reverse     │                          ││                │
    │Repurchase  │                          ││                │
    │Agreements  │                          ││                │
    ├──────┼─────────────┼┼────────┤
    │Loss and    │                          ││XX              │
    │Expense     │                          ││                │
    ├──────┼─────────────┼┼────────┤
    │Securities  │Existing account 530330,  ││XX              │
    │borrowing   │which is paid by the      ││                │
    │fee         │borrower to the lender    ││                │
    │            │including securities      ││                │
    │            │borrowing fee and service ││                │
    │            │fee                       ││                │
    ├──────┼─────────────┼┼────────┤
    │Loss from   │Newly added account       ││XX              │
    │securities  │521620, where the borrowed││                │
    │borrowing   │securities are sold, the  ││                │
    │transactions│borrower shall record loss││                │
    │            │based on the value of the ││                │
    │            │distributed cash dividend ││                │
    │            │or share dividend, or any ││                │
    │            │price that is in excess of││                │
    │            │the price on the payment  ││                │
    │            │date for new share        ││                │
    │            │subscription              ││                │
    ├──────┼─────────────┼┼────────┤
    │Interest    │Existing account 521200,  ││XX              │
    │Expense     │lender makes record       ││                │
    ├──────┼─────────────┼┼────────┤
    │Losses on   │Existing account 521600,  ││XX              │
    │the Covering│borrower makes record     ││                │
    │of          │                          ││                │
    │Securities  │                          ││                │
    │Borrowing   │                          ││                │
    │and Short   │                          ││                │
    │Sales of    │                          ││                │
    │Bonds with  │                          ││                │
    │Reverse     │                          ││                │
    │Repurchase  │                          ││                │
    │Agreements  │                          ││                │
    ├──────┼─────────────┼┼────────┤
    │Losses on   │Existing account 521610,  ││XX              │
    │Valuation   │borrower makes record     ││                │
    │Price for   │                          ││                │
    │Borrowed    │                          ││                │
    │Securities  │                          ││                │
    │and         │                          ││                │
    │Securities  │                          ││                │
    │Borrowing   │                          ││                │
    │and Short   │                          ││                │
    │Sales of    │                          ││                │
    │Bonds with  │                          ││                │
    │Reverse     │                          ││                │
    │Repurchase  │                          ││                │
    │Agreements  │                          ││                │
    └──────┴─────────────┴┴────────┘