china-accrual-schedule

Purpose

Build A-share Accrual Schedule — comprehensive accrual schedules for financial analysis and audit preparation.

Data Sources

Primary: iFind MCP (Tier-1 paid) / AkShare MCP (Tier-2 free alternative)

get_financials(ticker, "income")     → Revenue, expenses
get_financials(ticker, "balance")    → Working capital accounts

Secondary Sources

CNINFO — annual/quarterly reports
Audit report — accrual methodology

Workflow

Step 1: Identify Accrual Items

Revenue accruals:

Item	Description	Typical Items
Deferred revenue	Advance from customers	Prepayments, deposits
Accounts receivable	Revenue recognized, not yet collected	Trade receivables
Contract liabilities	New CAS term for prepayments	Contract-based
Notes receivable	Commercial acceptance/bank bills	Bills from customers

Expense accruals:

Item	Description	Typical Items
Accounts payable	Expenses incurred, not yet paid	Trade payables
Accrued salaries	Year-end bonus, unpaid wages	Bonus accruals
Accrued interest	Interest on loans, bonds	Interest payable
Provisions	Estimated obligations	Warranty, litigation
Deferred income	Government grants	Subsidy income
Accrued expenses	General accruals	Utilities, rent

Other accruals:

Item	Description
Taxes payable	Income tax, VAT, surcharges
Dividends payable	Declared but unpaid
Other payables	Miscellaneous

Step 2: Build Accrual Schedule

Monthly/quarterly accrual tracking:

Accrual Item	Jan	Feb	...	Q1	Q2	Q3	Q4	Full Year
Increase in accounts receivable
Increase in deferred revenue
Increase in accounts payable
Accrued salaries
...
Net accruals

Step 3: Analyze Accrual Quality

Accrual ratios:

Ratio	Formula	Interpretation
Total accrual rate	(ΔCA - ΔCash - ΔCL) / Average Assets	>0 = accrual-based earnings
Accounts receivable/Revenue	AR / Revenue	Rising = potential issues
Accounts payable/Cost	AP / COGS	Trend analysis
Deferred revenue/Revenue	Deferred rev / Revenue	Customer prepayments
Operating cash flow/Net profit	OCF / Net Income	<1 = accrual concern

Accrual quality flags:

Flag	Warning
Accounts receivable growth >> Revenue growth	Potential revenue inflation
Sudden decrease in accounts payable	Potential window dressing
Large fluctuation in deferred revenue	Revenue recognition timing
Abnormal other payables	Related party tunneling

Step 4: CAS-Specific Accrual Items

China-specific accruals:

Item	CAS Treatment	Notes
VAT	Pass-through, not revenue	Revenue excluding tax
Government grants	Deferred income or other income	Timing impact
Bad debt provision	Expected credit loss model	CAS 22
Inventory write-down provision	Lower of cost or NRV	CAS 1
Fixed asset impairment	When indicators exist	CAS 8
Goodwill impairment	Annual test (no reversal)	CAS 8
Termination benefits	Employee termination	CAS 9

Step 5: Working Capital Accruals

Working capital accrual schedule:

Item	Beginning	Additions	Usage	Reversal	Ending
Bad debt provision
Inventory write-down provision
Fixed asset impairment
Provisions (product quality)

Step 6: Revenue Recognition Accruals

CAS 14 revenue recognition:

Scenario	Recognition	Accrual Impact
Goods	When control transfers	Usually at delivery
Services	Gradually over the period	Matching labor costs
Construction	Output method/Input method	Long-term contracts
Franchise	Duration	Brand usage fee

Revenue accrual items:

Goods in transit
Consignment
Construction settlement
Membership / prepaid

Step 7: Period-End Accrual Review

Month-end / year-end accrual checklist:

Area	Items to Review
Revenue	Unbilled revenue, returns, allowances
Purchases	Uninvoiced goods/services
Payroll	Bonus, overtime, social insurance
Interest	Accrued but unpaid
Taxes	Tax provisions
Depreciation	Monthly depreciation
Provisions	Legal, warranty, restructuring

China-Specific Considerations

Common Accrual Patterns

Industry	Typical Accruals
Manufacturing	Raw material AP, bonus accruals
Retail	Lease accruals, loyalty programs
Real estate	presale, construction accruals
Construction	progress billing
Software	Deferred revenue, support accruals
Pharmaceutical	Rebates, returns provisions

Audit Considerations (China)

Area	Focus
Large accruals	Materiality threshold
Related parties	Related party payables
Term	Aging of receivables
Bad debt	Adequacy of allowance
Government grants	Compliance with grant conditions

Quality Checks

Before delivering:

All significant accruals identified
Schedule ties to financial statements
Trends analyzed
Quality flags addressed
CAS compliance verified
Audit implications noted

Data Source Mode Switch: Set env var IFIND_DATA_SOURCE_MODE to control data source preference.

ifind-only (strict): Use iFind only, error if unavailable

ifind-fallback (default): iFind preferred, fallback to AkShare

akshare-only: Skip iFind, use AkShare only