Data Resource Table for Listed Companies

Since data has been regarded as a foundational resource, an important productive force, and a key factor of production, all parties have been accelerating their exploration of how to transform data resources into productive elements and data assets.

Recently, several listed companies have included data in their financial statements. As of now, 13 listed companies have disclosed data resources in their 2024 semi-annual reports. It is noteworthy that some companies have made corrections shortly after issuing their financial reports, clearing the disclosed amounts of data resources.

The "active" yet "cautious" attitude of listed companies towards including data resources in their financial statements also reflects the difficulties in the early stages of exploration. The reporter has noticed that the treatment methods of listed companies regarding the inclusion of data resources vary. As of now, when domestic listed companies account for data resources, they are classified under inventory, intangible assets, and development expenditures, with amounts of 51 million yuan, 55 million yuan, and 246 million yuan, respectively.

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Ouyang Rihui, the deputy dean of the China Internet Economy Research Institute at Central University of Finance and Economics, told reporters that there is still controversy over which category data resources should be classified under in accounting treatment. Some companies still need to further clarify the planning of data resources inclusion and asset disclosure.

In his view, the lack of understanding of the importance of including data resources in financial statements, the scarcity of professional service organizations, the imperfection of data governance systems, and the resulting quality issues, as well as regional and industry differences and security management issues, still need to be further resolved.

Reflecting the Expected Economic Interests of Enterprises

Recently, in China Telecom's (601728.SH) officially disclosed 2024 semi-annual report, for the first time, it disclosed an amount of 105 million yuan for "data resources," all of which were accounted for under development expenditures. This amount exceeded the total amount of data resources disclosed in the financial reports of listed companies in the first quarter.

A report released by Shanghai Jiao Tong University shows that in the first quarter, among more than 5,000 companies listed on the A-shares, 18 listed companies disclosed data resources in their first-quarter financial reports, involving a total amount of 103 million yuan, of which intangible assets accounted for 79 million yuan.

According to the "Report," in terms of industry distribution, companies that have included data assets in their financial statements are mainly concentrated in the information transmission, software and information technology services industry, and the manufacturing industry, with the information transmission, software and information technology services industry, and scientific research and technical services industry leading in the amount involved.

In terms of enterprise scale, as of the end of May, companies that completed the inclusion of data assets in their financial statements in the first quarter were mainly those with a market value of less than 50 billion yuan (accounting for 94%), with more than half of the companies having a market value below 10 billion yuan, and only one company with a market value above 50 billion yuan.Journalists have observed that currently, including China Telecom, all three major operators have completed the inclusion of data resources in their financial statements. In the consolidated balance sheet, China Mobile (600941.SH) has included data resources under intangible assets and development expenditures. According to financial report data, as of June 30th, China Mobile's intangible assets amount to 46.622 billion yuan, with data resources accounting for 29 million yuan; development expenditures amount to 2.319 billion yuan, with data resources accounting for 41 million yuan.

Gao Kan, a partner in the digital consulting business of Tianjian Accounting Firm, believes that after a normative determination in accordance with accounting standards and the "Interim Provisions on Accounting Treatment of Enterprise Data Resources," the choice of how to handle data resources in the financial statements is determined by the value attributes of the data products themselves.

Gao Kan added that for market entities, the inclusion of data resources in the financial statements increases corporate assets by assetizing data resources, which undoubtedly has a positive impact on improving the enterprise's asset-liability ratio. Enterprises can reduce costs and increase efficiency by using data assets for their own purposes, or they can use intangible data resources to provide external services, or they can sell data resource inventory to obtain operating income, bringing related benefits to the enterprise and enhancing profitability. Related to this, the market's expectations for the enterprise's development prospects are raised, which will also have a positive impact on the enterprise's valuation and financing.

"Currently, data resources are included in the financial statements according to the original cost method, and enterprises should not confuse this with the valuation results of data assets, leading to incorrect expectations," Gao Kan specially reminded.

Liu Guangjie, a lawyer at Shanghai Jin Tiancheng Law Firm, believes that different classifications of data assets reflect different ways of utilizing data resources and expectations for economic benefits. In the long run, these classifications help enterprises better manage and utilize data assets, thereby improving operational efficiency and financial performance. Enterprises should reasonably choose the classification method based on their own situation and development strategy.

It is still necessary to strengthen compliance research in legal and accounting dimensions.

It should be noted that there is still a gap between current enterprise expectations and actual operations.

Journalists have noticed that after the aforementioned 13 companies included data resources in their reports, four more companies followed with correction announcements, clearing the disclosed amounts of data resources. As of now, the total amount of data resources for the remaining nine companies is 352 million yuan.

One of the companies that corrected the disclosure of data resources told the journalist that the "data resources" listed in the company's semi-annual report was incorrect, mainly due to the mistake of financial personnel. They have urged financial personnel to strengthen training and learning of relevant regulations, and the company will further strengthen supervision and inspection of financial accounting basic work, as well as the compilation and review of information disclosure documents.

"Clarifying the definition of data assets, ensuring data quality, resolving valuation issues, ensuring compliance, and establishing an internal control system are all key issues that enterprises need to pay attention to when implementing data assets in the financial statements," Liu Guangjie told the journalist. In his view, enterprises can balance and resolve legal and accounting issues of data assets in the financial statements by conducting in-depth research on laws and regulations, clarifying accounting standards, establishing cross-departmental collaboration mechanisms, leveraging third-party support, and closely monitoring policy changes.In Gao Xun's view, the legal dimension focuses on ownership and compliance, while the accounting dimension emphasizes accounting and measurement. Currently, the whole society's understanding of the value of data is continuously improving, and more and more business entities are participating in the market-oriented allocation of data elements. These companies need to continuously strengthen their compliance research on laws and regulations and the accounting dimension during the process of data element assetization.

Chu Yantao, a professional technical partner at Zhitong Accounting Firm, frankly stated that currently, the vague definition of data resources, the complexity of ownership boundaries, the uncertainty of economic benefits inflow, the cost accounting, amortization and impairment of data resources, and information disclosure are all issues that need to be taken seriously in the process of data resources entering the table.

Chu Yantao pointed out that the collection and allocation of data resource-related costs require companies to establish a complete cost accounting system and internal control system. They need to be able to separately collect and account for various expenditures at each stage of forming data assets, and establish rules for allocating related costs between different projects or different stages to ensure that the capitalized expenditure amount is reasonable and accurate.

In her view, in practice, most companies have a relatively limited understanding of data resources. These companies, especially new technology companies and data-type companies, including traditional companies in the process of informatization, have a large amount of data that needs to be summarized and mined to identify data resources with commercialization and application scenarios. Based on this, companies need to determine what data resources they hold and the boundaries between these data resources and other intangible assets (software, intellectual property rights, copyrights, etc.).

"The amortization method of data assets should be able to reflect the expected consumption method of economic benefits. In the current situation where data assets have not yet formed an active market, the choice of amortization method largely depends on accounting professional judgment," Chu Yantao said. In addition, she believes that if the service life of data assets is determined, their value can be reasonably amortized within the service life. However, due to the time-varying nature of the value of data assets, companies are unable to provide a relatively reasonable basis for the amortization period of data assets as intangible assets.

Chu Yantao believes that the intangible asset criteria stipulate, "If the period for which an intangible asset can bring economic benefits to the enterprise cannot be foreseen, it should be considered an intangible asset with an indefinite useful life." For data resources without a clear service life, they belong to intangible assets with an indefinite useful life and should be subject to impairment testing on each balance sheet date. However, there is currently no active market for data assets, so there are many difficulties in conducting impairment testing on data assets.

Liu Guangjie suggested that companies should first clarify the definition and scope of data assets and establish a unified classification standard for data assets in terms of data asset measurement and disclosure. At the same time, it is necessary to establish a data asset measurement system, choose the appropriate measurement method, and set up a special data asset account to record initial measurement, subsequent changes, and year-end balances. To strengthen the standardization and transparency of disclosure, companies should strictly follow relevant accounting standards, disclose various types of information about data assets in detail, and encourage voluntary disclosure of more data strength and value.