What provisions of the accounting standards are violated when the rent is offset against the property fee?

Rent-to-property fee is a non-monetary transaction, which belongs to normal business and will not violate the provisions of accounting standards.

Non-monetary transaction refers to the exchange of non-monetary assets between the two parties. This exchange does not involve or only involves a small amount of monetary assets (that is, premium). When a non-monetary transaction occurs, both parties exchange non-monetary assets. At this time, the usual principles of income recognition and asset evaluation are often not fully applicable.

Accounting treatment of non-monetary transactions;

Although non-monetary transactions have commercial substance, if the fair value of assets exchanged in or out cannot be reliably measured, accounting treatment shall be carried out according to the principle that non-monetary assets exchange has no commercial substance.

1. When an enterprise has a non-monetary transaction, it shall take the book value of the exchanged assets plus the relevant taxes and fees payable as the book value of the exchanged assets.

2. In case of premium in non-monetary transactions, it shall be handled according to different situations:

(1) If the premium is paid, the book value of the converted assets, plus the premium and relevant taxes payable, shall be taken as the book value of the converted assets.

(2) If the premium is received, the recorded value of the converted assets and the profit and loss to be recognized shall be determined according to the following formula:

Book value of swapped assets = book value of swapped assets-(premium/fair value of swapped assets) × book value of swapped assets-(premium/fair value of swapped assets )× tax payable and education surcharge+relevant tax payable.

Gains and losses to be confirmed = premium-(premium/fair value of exchange assets) × book value of exchange assets-(premium/fair value of exchange assets) × payable taxes and education surcharge.

3. In non-monetary transactions, if multiple assets are exchanged at the same time, the total book value of the exchanged assets and the relevant taxes payable shall be allocated according to the proportion of the fair value of the exchanged assets to the total fair value of the exchanged assets, so as to determine the entry value of the exchanged assets.