In order to strengthen the internal financial governance of the group company and its subsidiaries/divisions, enhance the management of materials, save expenses, and allow limited funds to play a bigger role, these measures are specially formulated.
Material Management Personnel Setup:
1. The procurement department is responsible for the procurement, acceptance, inventory storage, and direct procurement approval of materials;
2. Material management adheres to the principle of job separation. Procurement personnel, inventory storage personnel, and acceptance bookkeeping personnel are set up;
3. The finance department sets up a material accounting position, responsible for material price review and material amount calculation.
Inventory Material Valuation Method:
1. Determination of the value of incoming materials:
(1) Composition of the value of externally purchased materials:
- Purchase price, i.e., the price listed on the supplier's invoice;
- Transportation, handling, and insurance fees;
- Reasonable losses during transportation;
- Processing, sorting, and screening costs before warehousing.
(2) The value of self-made materials is determined by the actual production costs incurred.
(3) Composition of the value of consigned processed materials:
1) Actual cost of issued materials;
2) Paid processing fees;
3) Transportation, handling, and insurance fees.
2. Determination of the value of surplus materials:
(1) If there are similar materials, the value is determined according to the actual purchase value of similar materials;
(2) For different types of materials, the current market price is used to determine the value;
(3) If there are neither similar inventory materials nor market prices, the valuation can be recorded at an appraised value.
3. Materials invested by investors are determined according to the assessed or contract/agreed value.
4. Donated materials:
(1) If there are invoices/bills, the amount listed plus the incurred transportation, handling, insurance fees, and paid taxes determines the value;
(2) Without invoices/bills, the current market price of similar materials determines the value.
5. Determination of the outgoing material cost:
The outgoing material cost can be determined using methods such as first-in-first-out (FIFO), last-in-first-out (LIFO), weighted average method, standard cost method, etc. Once the material valuation method is determined, it cannot be changed within an accounting year.
(Material Dynamic Management and Accounting Regulations:
1. Budget preparation and approval:
(1) Each department's annual material usage should prepare a budget.
(2) After the finance department conducts price reviews and comprehensive balancing, it proposes a suggested budget index for the company leadership's approval.
2. Material procurement...)
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