0000950170-22-013561 | 20-F | XBRL Viewer

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Document and Entity Information	12 Months Ended
Document and Entity Information	Mar. 31, 2022 shares
Entity Registrant Name	Uxin Limited
Entity Central Index Key	0001729173
Document Type	20-F
Document Registration Statement	false
Document Annual Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Document Shell Company Report	false
Entity File Number	001-38527
Entity Incorporation, State or Country Code	E9
Entity Address, Address Line One	1 & 3/F
Entity Address, Address Line Two	No. 12 Beitucheng East Road
Entity Address, Address Line Three	Chaoyang District
Entity Address, City or Town	Beijing
Entity Address, Postal Zip Code	100029
Entity Address, Country	CN
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity Filer Category	Large Accelerated Filer
Document Accounting Standard	U.S. GAAP
Current Fiscal Year End Date	--03-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Amendment Flag	false
ICFR Auditor Attestation Flag	true
Auditor Firm ID	1424
Auditor Name	PricewaterhouseCoopers Zhong Tian LLP
Auditor Location	Shanghai, the People’s Republic of China
Business Contact [Member]
Contact Personnel Name	Feng Lin
City Area Code	86 10
Local Phone Number	5691-6765
Contact Personnel Email Address	ir@xin.com
Entity Address, Address Line One	1&3/F
Entity Address, Address Line Two	No. 12 Beitucheng East Road
Entity Address, Address Line Three	Chaoyang District
Entity Address, City or Town	Beijing
Entity Address, Postal Zip Code	100029
Entity Address, Country	CN
ADS
Title of 12(b) Security	American depositary shares (one American depositaryshare representing three Class A ordinary shares, parvalue US$0.0001 per share)
Trading Symbol	UXIN
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding	5,288,762
Class A Ordinary Shares
Title of 12(b) Security	Class A ordinary shares, par valueUS$0.0001 per share*
No Trading Symbol Flag	true
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding	1,146,044,859
Class B ordinary shares
Entity Common Stock, Shares Outstanding	40,809,861

CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands	Mar. 31, 2022 CNY (¥)	Mar. 31, 2022 USD ($)	Mar. 31, 2021 CNY (¥)
Current assets:
Cash and cash equivalents	¥ 128,021	$ 20,195	¥ 192,605
Restricted cash	8,276	1,306	41,114
Accounts receivable, net	832	131	2,446
Amounts due from related parties, net of provision for credit losses of RMB6,456 as of March 31, 2021			129,383
Loans recognized as a result of payments under guarantees, net of provision for credit losses of RMB1,182,609 and RMB324,371 as of March 31, 2021 and 2022, respectively	54,888	8,658	179,947
Other receivables, net of provision for credit losses of RMB20,980 and RMB30,251 as of March 31, 2021 and 2022, respectively	166,006	26,187	110,025
Inventory, net	426,300	67,240	69,587
Forward contract assets	36	6
Prepaid expenses and other current assets	90,012	14,199	107,836
Total current assets	874,328	137,922	832,943
Noncurrent assets:
Property, equipment and software, net	34,531	5,447	29,306
Intangible assets, net			27
Long-term investments	288,756	45,550	288,428
Other non-current assets	24,000	3,786	36,000
Right-of-use assets, net	29,584	4,667	46,829
Total noncurrent assets	376,871	59,450	400,590
Total assets	1,251,199	197,372	1,233,533
Current liabilities
Accounts payable	92,534	14,597	101,205
Guarantee liabilities	179	28	2,441
Amounts due to related parties			69,434
Other payables and other current liabilities	674,333	106,373	894,565
Warrant liabilities	196,390	30,980
-Current portion	233,000	36,755	79,560
Current portion of long-term debt	102,206	16,123
Total current liabilities	1,298,642	204,856	1,147,205
Noncurrent liabilities
Consideration payable to Webank	107,642	16,980	200,778
Operating lease liabilities	10,866	1,714	34,365
Convertible notes			1,614,040
Long-term borrowings			233,000
Long-term debt	817,648	128,981
Total noncurrent liabilities	936,156	147,675	2,082,183
Total liabilities	2,234,798	352,531	3,229,388
Contingencies and commitments
Mezzanine equity
Senior convertible preferred shares (US$0.0001 par value, nil and 1,000,000,000 shares authorized as of March 31, 2021 and 2022, respectively; nil and 400,524,323 shares issued and outstanding as of March 31, 2021 and 2022, respectively)	526,484	83,051
Total Mezzanine equity	526,484	83,051
Shareholders' deficit
Ordinary shares (US$0.0001 par value, 10,000,000,000 and 9,000,000,000 shares authorized as of March 31, 2021 and 2022, respectively; 1,071,621,698 Class A ordinary shares and 1,146,044,858 Class A ordinary shares issued and outstanding as of March 31, 2021 and 2022, respectively; 40,809,861 Class B ordinary shares issued and outstanding as of March 31, 2021 and 2022)	782	123	733
Additional paid-in capital	14,254,109	2,248,530	13,695,877
Accumulated other comprehensive income	288,461	45,504	217,747
Accumulated deficit	(16,053,300)	(2,532,341)	(15,910,049)
Total UXIN LIMITED shareholders' deficit	(1,509,920)	(238,184)	(1,995,692)
Non-controlling interests	(163)	(26)	(163)
Total shareholders' deficit	(1,510,083)	(238,210)	(1,995,855)
Total liabilities, mezzanine equity and shareholders' deficit	¥ 1,251,199	$ 197,372	¥ 1,233,533

CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands	Mar. 31, 2021 CNY (¥) shares
Provision for credit losses, related party receivables \| ¥	¥ 6,456
Provision for credit losses, Loan recognized \| ¥	1,182,609
Provision for credit losses, Other receivables \| ¥	¥ 20,980
Temporary Equity, Shares Authorized (in shares)	0
Temporary Equity, Shares Issued (in shares)	0
Temporary Equity, Shares Outstanding (in shares)	0
Ordinary shares, shares authorized (in shares)	10,000,000,000
Ordinary shares, shares issued (in shares)	1,112,431,559
Class A Ordinary Shares
Ordinary shares, shares issued (in shares)	1,071,621,698
Ordinary shares, shares outstanding (in shares)	1,071,621,698
Class B ordinary shares
Ordinary shares, shares issued (in shares)	40,809,861
Ordinary shares, shares outstanding (in shares)	40,809,861

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS ¥ in Thousands, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020 CNY (¥) ¥ / shares shares	Mar. 31, 2022 CNY (¥) ¥ / shares shares	Mar. 31, 2022 USD ($) $ / shares shares	Mar. 31, 2021 CNY (¥) ¥ / shares shares	Dec. 31, 2019 CNY (¥) ¥ / shares shares
Revenues:
Total revenues	¥ 103,861	¥ 1,636,116	$ 258,092	¥ 657,408	¥ 1,588,031
Cost of revenues	(110,714)	(1,588,398)	(250,564)	(673,711)	(689,292)
Gross profit/ (loss)	(6,853)	47,718	7,528	(16,303)	898,739
Operating expenses:
Sales and marketing	(189,503)	(222,139)	(35,042)	(339,013)	(1,184,997)
Research and development	(31,176)	(36,200)	(5,710)	(74,137)	(140,006)
General and administrative	(74,926)	(151,024)	(23,823)	(277,925)	(402,040)
Losses from guarantee liabilities					(194,385)
(Provision for)/reversal of credit losses, net	(1,939,570)	687	108	(91,593)	(271,372)
Total operating expenses	(2,235,175)	(408,676)	(64,467)	(782,668)	(2,192,800)
Other operating income, net	56,043	82,017	12,938	246,346	1,925
Loss from continuing operations	(2,185,985)	(278,941)	(44,001)	(552,625)	(1,292,136)
Interest income	3,081	3,660	577	45,140	14,958
Interest expenses	(29,029)	(41,222)	(6,503)	(95,953)	(112,587)
Other income	2,420	5,227	825	15,672	71,142
Other expenses	(10,118)	(8,925)	(1,408)	(7,890)	(36,569)
Foreign exchange gains/ (losses)	(388)	(9,336)	(1,473)	(15,887)	4,247
Fair value impact of the issuance of senior convertible preferred shares		186,231	29,377
Gain from disposal of investments, net					28,257
Impairment of long-term investment					(37,775)
Gain from disposal of subsidiaries	179,020
Inducement charge of convertible notes				(121,056)
Loss from continuing operations before income tax expense	(2,040,999)	(143,306)	(22,606)	(732,599)	(1,360,463)
Income tax benefit/(expense)	(326)	(245)	(39)	(33)	2,554
Equity in income of affiliates, net of tax	6,940	328	52	15,657	30,231
Net loss from continuing operations	(2,034,385)	(143,223)	(22,593)	(716,975)	(1,327,678)
Less: net loss attributable to non-controlling interests shareholders	(5,383)			(9)	(1,452)
Net loss from continuing operations, attributable to UXIN LIMITED's ordinary shareholders	(2,029,002)	(143,223)	(22,593)	(716,966)	(1,326,226)
Discontinued operations
Net (loss)/ income from discontinued operations before income tax	(455,177)			295,744	(659,458)
Income tax expense					(2,992)
Net (loss)/ income from discontinued operations	(455,177)			295,744	(662,450)
Net (loss)/ income from discontinued operations attributable to UXIN LIMITED's ordinary shareholders	(455,177)			295,744	(662,450)
Net loss	(2,489,562)	(143,223)	(22,593)	(421,231)	(1,990,128)
Less: net loss attributable to non controlling interests shareholders	(5,383)			(9)	(1,452)
Net loss attributable to UXIN LIMITED's ordinary shareholders	(2,484,179)	(143,223)	(22,593)	(421,222)	(1,988,676)
Net loss attributable to UXIN LIMITED's ordinary shareholders	(2,484,179)	(143,223)	(22,593)	(421,222)	(1,988,676)
Net loss from continuing operations, attributable to ordinary shares	(2,029,002)	(143,223)	(22,593)	(716,966)	(1,326,226)
Comprehensive Income (Loss)
Net loss	(2,489,562)	(143,223)	(22,593)	(421,231)	(1,990,128)
Foreign currency translation	40,028	70,714	11,155	110,983	(17,976)
Total comprehensive loss	(2,449,534)	(72,509)	(11,438)	(310,248)	(2,008,104)
Less: total comprehensive loss attributable to non controlling interests shareholders	(3,927)			(9)	(1,558)
Total comprehensive loss attributable to UXIN LIMITED's ordinary shareholders	(2,445,607)	(72,509)	(11,438)	(310,239)	(2,006,546)
Net loss from continuing operations, attributable to UXIN LIMITED's ordinary shareholders	(2,029,002)	(143,223)	(22,593)	(716,966)	(1,326,226)
Net (loss)/ income from discontinued operations, attributable to UXIN LIMITED's ordinary shareholders	(455,177)			295,744	(662,450)
Net loss attributable to UXIN LIMITED's ordinary shareholders	¥ (2,484,179)	¥ (143,223)	$ (22,593)	¥ (421,222)	¥ (1,988,676)
Weighted average shares outstanding - basic \| shares	888,460,868	1,168,419,750	1,168,419,750	1,100,650,208	886,613,598
Weighted average shares outstanding - diluted \| shares	888,460,868	1,354,506,021	1,354,506,021	1,330,913,033	886,613,598
Loss per share for ordinary shareholders, basic
Continuing operations \| (per share)	¥ (2.28)	¥ (0.12)	$ (0.02)	¥ (0.65)	¥ (1.50)
Discontinued operations \| ¥ / shares	(0.51)			0.27	(0.75)
Loss per share for ordinary shareholders, diluted
Continuing operations \| (per share)	(2.28)	¥ (2.07)	$ (0.33)	(0.65)	(1.50)
Discontinued operations \| ¥ / shares	¥ (0.51)			¥ 0.22	¥ (0.75)
Retail vehicle sales
Revenues:
Total revenues		¥ 780,371	$ 123,101	¥ 463,547
Wholesale vehicle sales
Revenues:
Total revenues		823,466	129,899	51,249
Consumers ("2C") - Commission revenue
Revenues:
Total revenues	¥ 48,038			41,939	¥ 711,362
Consumers ("2C") - Value-added service revenue
Revenues:
Total revenues	40,456			35,248	636,046
Other services
Revenues:
Total revenues	¥ 15,367	¥ 32,279	$ 5,092	¥ 65,425	¥ 240,623

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - CNY (¥) ¥ in Thousands	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Comprehensive Income (Loss)
Related party transaction	¥ 176	¥ 10,869

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (DEFICIT) ¥ in Thousands, $ in Thousands	CNY (¥)	USD ($)	Cumulative Effect, Period of Adoption, Adjustment CNY (¥)	Cumulative Effect, Period of Adoption, Adjusted Balance CNY (¥)	Ordinary share CNY (¥) shares	Ordinary share Cumulative Effect, Period of Adoption, Adjusted Balance CNY (¥) shares	Additional paid-in capital CNY (¥)	Additional paid-in capital Cumulative Effect, Period of Adoption, Adjusted Balance CNY (¥)	Accumulated other comprehensive income CNY (¥)	Accumulated other comprehensive income Cumulative Effect, Period of Adoption, Adjusted Balance CNY (¥)	Accumulated deficit CNY (¥)	Accumulated deficit Cumulative Effect, Period of Adoption, Adjustment CNY (¥)	Accumulated deficit Cumulative Effect, Period of Adoption, Adjusted Balance CNY (¥)	Total UXIN LIMITED shareholders' equity/(deficit) CNY (¥)	Total UXIN LIMITED shareholders' equity/(deficit) Cumulative Effect, Period of Adoption, Adjustment CNY (¥)	Total UXIN LIMITED shareholders' equity/(deficit) Cumulative Effect, Period of Adoption, Adjusted Balance CNY (¥)	Non-controlling interests CNY (¥)	Non-controlling interests Cumulative Effect, Period of Adoption, Adjusted Balance CNY (¥)
Balance at Dec. 31, 2018	¥ 2,371,643				¥ 575		¥ 12,967,986		¥ 86,061		¥ (10,680,489)			¥ 2,374,133			¥ (2,490)
Balance (in shares) at Dec. 31, 2018 \| shares					880,659,899
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Foreign currency translation adjustments	(17,975)								(17,869)					(17,869)			(106)
Foreign currency translation adjustments	(17,976)
Net loss	(1,990,128)										(1,988,676)			(1,988,676)			(1,452)
Issuance of ordinary shares due to exercise of the share option	1,285				¥ 6		1,279							1,285
Issuance of ordinary shares due to exercise of the share option (in shares) \| shares					6,957,492
Share-based compensation	100,295						100,295							100,295
Balance at Dec. 31, 2019	465,120		¥ (319,036)	¥ 146,084	¥ 581	¥ 581	13,069,560	¥ 13,069,560	68,192	¥ 68,192	(12,669,165)	¥ (319,036)	¥ (12,988,201)	469,168	¥ (319,036)	¥ 150,132	(4,048)	¥ (4,048)
Balance (in shares) at Dec. 31, 2019 \| shares					887,617,391	887,617,391
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Foreign currency translation adjustments	40,028								38,572					38,572			1,456
Net loss	(2,489,562)										(2,484,179)			(2,484,179)			(5,383)
Issuance of ordinary shares due to exercise of the share option (in shares) \| shares					50,066
Share-based compensation	(32,571)						(32,571)							(32,571)
Repurchase of ordinary shares from Fairlubo's minority interest	(8,626)										(16,447)			(16,447)			(7,821)
Balance at Mar. 31, 2020	(2,344,647)				¥ 581		13,036,989		106,764		(15,488,827)			(2,344,493)			(154)
Balance (in shares) at Mar. 31, 2020 \| shares					887,667,457
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Foreign currency translation adjustments	110,983								110,983					110,983
Net loss	(421,231)										(421,222)			(421,222)			(9)
Issuance of ordinary shares due to exercise of the share option	1,911				¥ 2		1,909							1,911
Issuance of ordinary shares due to exercise of the share option (in shares) \| shares					3,791,290
Issuance of Class A ordinary shares (Note 18)	169,499				¥ 57		169,442							169,499
Issuance of Class A ordinary shares (in shares) \| shares					84,692,839
Share-based compensation	(19,122)						(19,122)							(19,122)
Conversion of convertible notes (Note 12)	506,752				¥ 93		506,659							506,752
Conversion of convertible notes (in shares) \| shares					136,279,973
Balance at Mar. 31, 2021	(1,995,855)				¥ 733		13,695,877		217,747		(15,910,049)			(1,995,692)			(163)
Balance (in shares) at Mar. 31, 2021 \| shares					1,112,431,559
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Foreign currency translation adjustments	70,714	$ 11,155							70,714					70,714
Net loss	(143,223)	(22,593)									(143,223)			(143,223)
Issuance of ordinary shares due to exercise of the share option	15,713				¥ 6		15,707							15,713
Issuance of ordinary shares due to exercise of the share option (in shares) \| shares					7,432,870
Share-based compensation	26,534						26,534							26,534
Debt restructuring gain from equity holders of the Company (Note 12)	61,018						61,018							61,018
Contribution from a shareholder due to the Restructuring (Note 2.3)	8,000						8,000							8,000
Conversion of convertible notes (Note 12)	447,016				¥ 43		446,973							447,016
Conversion of convertible notes (in shares) \| shares					66,990,291
Balance at Mar. 31, 2022	¥ (1,510,083)	$ (238,210)			¥ 782		¥ 14,254,109		¥ 288,461		¥ (16,053,272)			¥ (1,509,920)			¥ (163)
Balance (in shares) at Mar. 31, 2022 \| shares					1,186,854,720

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY/(DEFICIT) (Parenthetical) - $ / shares	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY/(DEFICIT)
Ordinary shares, par value (in dollars per share)	$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001

CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020 CNY (¥)	Mar. 31, 2022 CNY (¥)	Mar. 31, 2022 USD ($)	Mar. 31, 2021 CNY (¥)	Dec. 31, 2019 CNY (¥)
Cash flows from operating activities:
Net loss (continuing and discontinued operations)	¥ (2,489,562)	¥ (143,223)	$ (22,593)	¥ (421,231)	¥ (1,990,128)
Adjustments to reconcile net loss to net cash generated from operating activities:
Shared-based compensation	(32,571)	26,534	4,186	(19,122)	100,295
Depreciation and amortization of property, equipment and software	21,339	14,265	2,250	46,391	88,939
Amortization of intangible assets	87	27	4	111	6,892
Amortization of right-of-use assets	1,252	15,373	2,425	10,950	75,924
Loss/(gains) from disposal of property, equipment and software	1,210	(1,494)	(236)	6,568	2,710
Equity in income of affiliates	(6,940)	(328)	(52)	(15,657)	(30,231)
Write-down of inventory		14,223	2,244	16,279
Provision for/ (reversal of) credit losses	1,954,516	(687)	(108)	91,593	272,783
Guarantee income	(44,471)	(126)	(20)	(207,825)
Discounting impact of the consideration payable to WeBank		11,986	1,891	(30,898)
Fair value impact of the issuance of senior convertible preferred shares (Note 12, 17)		(186,231)	(29,377)
Gains from waiver of operating payables (Note 13)		(73,747)	(11,633)
Losses from guarantee liabilities					362,597
Deferred income tax liabilities					(1,678)
Impairment of long-term investment					37,775
Gains from disposal of long-term investment, net					(28,257)
Gain from disposal of salvage car related business	(179,020)
Goodwill impairment				9,541
Impairment of net assets transferred	407,710			420,000
Transaction gain from divestiture transactions, net (Note 3)				(721,211)
Inducement charge of convertible notes				121,056
Changes in operating assets and liabilities:
Receivables, prepaid expenses and other current assets	138,588	51,824	8,175	48,250	315,726
Amounts due from related parties	23,520	3,817	602	36,664	(51,590)
Amounts due to related parties				69,434
Advance to consumers on behalf of financing partners	2,135				519,773
Loans recognized as a result of payments under guarantees	(251,163)	148,708	23,458	134,380	(1,533,259)
Advance to sellers	58,185			83,537	347,402
Financial lease receivables	102,680	10	2	8,510	156,301
Inventory	3,478	(372,120)	(58,700)	(75,552)	5,588
Payables, accruals and other current liabilities	(101,829)	(266,922)	(42,105)	(354,669)	679,335
Deposit of interests from consumers and payable to financing partners	(16,496)			(18,032)	(470,105)
Deferred revenue	(3,919)	(5,247)	(828)	(27,052)	(60,893)
Consideration payable to WeBank		(81,604)	(12,873)	(334,323)
Net cash used in operating activities	(411,271)	(844,962)	(133,288)	(1,122,308)	(1,194,101)
Cash flows from investing activities:
Proceeds from disposal of property, equipment and software	451	1,885	297	13,357	43,611
Purchase of property, equipment and software	(307)	(18,654)	(2,943)	(413)	(46,820)
Proceeds from disposal of long term investments	2,741				96,838
Proceeds from disposal short-term investments					597,984
Cash deposits transferred to Golden Pacer (Note 3)					(1,175,867)
Proceeds from disposal of subsidiaries, net of cash disposed	157,013			130,000
Proceeds from disposal of 2B business				300,072
Net cash (used in)/generated from investing activities	159,898	(16,769)	(2,646)	443,016	(484,254)
Cash flows from financing activities:
Repayment of borrowings	(159,148)	(79,560)	(12,550)	(41,094)	(602,485)
Net proceeds from issuance of convertible notes					1,853,381
Repayment of convertible notes					(1,190,182)
Repayment of long-term debt		(58,956)	(9,300)
Proceeds from exercise of share options	629	15,713	2,479	1,912	12,916
Proceeds from issuance of Class A ordinary shares				169,499
Repurchase of ordinary shares from Fairlubo's minority interest	(7,000)
Proceeds from the issuance of senior convertible preferred shares in conjunction with warrants		887,225	139,956
Net cash generated from/ (used in) financing activities	(165,519)	764,422	120,585	130,317	73,630
Effect of exchange rate changes on cash, cash equivalents and restricted cash	4,065	(113)	(18)	(14,741)	960
Net decrease in cash, cash equivalents and restricted cash	(412,827)	(97,422)	(15,367)	(563,716)	(1,603,765)
Cash, cash equivalents and restricted cash recorded in held for sale assets at beginning of the period	25,074				1,001,325
Cash, cash equivalents and restricted cash at beginning of the period	1,185,188	233,719	36,868	797,435	1,812,702
Cash, cash equivalents and restricted cash recorded in held for sale assets at end of the period					25,074
Cash, cash equivalents and restricted cash at end of the period	797,435	136,297	21,501	233,719	1,185,188
Supplemental disclosure of cash flow information
Cash paid for income tax	1,115	179	28	22	7,754
Cash paid for interest		5,111	806	19,717	¥ 77,924
Supplemental schedule of noncash investing and financing activities
Unreceived disposal consideration	130,000			¥ 129,307
Unpaid purchase consideration to minority interest	¥ 8,319
Net settlement of long-term debt with unreceived disposal consideration(Note 5)		¥ 45,350	$ 7,154

CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) ¥ in Thousands, $ in Thousands	Mar. 31, 2022 CNY (¥)	Mar. 31, 2022 USD ($)	Mar. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash and cash equivalents	¥ 128,021	$ 20,195	¥ 192,605	¥ 342,504	¥ 478,200
Restricted cash	8,276	1,306	41,114	454,931	706,988
Cash, cash equivalents and restricted cash reclassified as held for sale assets					25,074
Total cash, cash equivalents and restricted cash	¥ 136,297	$ 21,501	¥ 233,719	¥ 797,435	¥ 1,210,262

PRINCIPAL ACTIVITIES AND ORGANIZATION

12 Months Ended

Mar. 31, 2022

PRINCIPAL ACTIVITIES AND ORGANIZATION

PRINCIPAL ACTIVITIES AND ORGANIZATION

1. PRINCIPAL ACTIVITIES AND ORGANIZATION

The accompanying consolidated financial statements include the financial statements of Uxin Limited (the “Company” or “Uxin”), its subsidiaries and its former variable interest entities (“VIEs”) . The Company, its subsidiaries and its former consolidated VIEs are collectively referred to as the “Group”.

The Company was incorporated under the law of the Cayman Islands as the exempted limited liability company on December 8, 2011. The Company serves as an investment holding company and currently has no operations of its own.

The Group’s principal operation and geographic market is in the People’s Republic of China (“PRC”). In order to devote all resources towards developing and scaling up its online used car business and to relieve its future growth from additional guarantee obligations or credit risks, the Group made a series of strategic divestiture transactions (the “Divestiture Transactions”) that occurred during 2019 and subsequent period in 2020. Since September 2020, the Group has shifted to “inventory-owning” model where the Group builds-up and sells its own inventory of used vehicles. Prior to these Divestiture Transactions disclosed in the below paragraphs, the Group was primarily engaged in operating used car e-commerce platforms through its mobile applications (Uxin Used Car / Uxin Auction) and websites (www.xin.com / www.youxinpai.com), facilitating used car transaction services (2B / 2C) and facilitating financing solutions offered by third-party financing partners to buyers for their used car purchases (2C).

China’s used car market follows clear seasonal patterns where the fourth quarter is typically the peak season and the first quarter is typically slower due to the Chinese New Year Holiday. The Company decided to change its fiscal year end from December 31 to March 31, effective April 1, 2020, in order to focus on strategic planning for each new fiscal year during off peak first quarter.

Divestiture Transactions

On January 16, 2020, the Company entered into definitive agreements with Beijing Hengtai Boche Auction Co. Ltd. (“Boche”) to divest its salvage car related business in exchange for a total cash consideration of RMB330 million. The cash consideration was further modified and revised to RMB295 million due to a working capital adjustment. The transaction contemplated under the definitive agreements was closed in January 2020. Starting from January 31, 2020, the Company no longer retained power of control over the salvage cars related business and accordingly deconsolidated the related subsidiaries, mainly including Beijing Youxin Fengshun Lubao Vehicle Auction Co., Ltd., Beijing Fengshun Lubao Automotive Auction Co., Ltd., Zhejiang Dongwang Internet Technology Co., Ltd. and their wholly-owned subsidiaries (“Salvage Car Related Subsidiaries”), from the Company’s consolidated financial statements.

On March 24, 2020, the Company entered into definitive agreements with 58.com to sell its 2B online used car auction business in exchange for a total gross consideration of US$105 million. The transaction contemplated under the definitive agreements was closed in April 2020.

On July 12, 2019 and September 30, 2019, the Company entered into a binding term sheet and definitive agreements, respectively, with Golden Pacer relating to the divestiture of its entire 2C intra-regional business and loan facilitation related service. On April 23, 2020, the Company entered into supplemental agreements with Golden Pacer to modify and supplement certain terms and conditions in connection with the divestiture. Pursuant to the series of agreements, the Company has divested its entire 2C intra-regional business to Golden Pacer and ceased to provide loan facilitation related guarantees starting from the three months ended December 31, 2019. The transaction contemplated under the definitive and supplemental agreements was closed on April 23, 2020.

After the Divestiture Transactions, the Group primarily operated its cross-regional online used car transaction business (2C). Since September 2020, the Group started to shift to the “inventory-owning” model where the Group sells its own inventory of used vehicles, and this model has been further updated since March 2021 when the Group started to acquire used vehicles directly from individuals.

As of March 31, 2022, the Company’s principal subsidiaries are as follows:


Subsidiaries	Place of incorporation	Date of incorporation or acquisition	Percentage of direct or indirect			Principal activities

Youxin (Shaanxi) Technology Information Co., Ltd.	Xi’an	April 27, 2018		100	%	Online used car transaction service
Youxin (Ningbo) Information Technology Co., Ltd.	Ningbo	July 15, 2020		100	%	Vehicle sales
Youxin (Hefei) Automobile Intelligent Remanufacturing Co., Ltd.	Hefei	September 8, 2021		100	%	Vehicle sales
Hefei Youquan Information Technology Co., Ltd.	Hefei	December 13, 2021		100	%	Vehicle sales

Variable interest entities

In order to comply with PRC regulatory requirements restricting foreign ownership of internet information services under value-added telecommunications services and certain other businesses in China, the Company used to operate online platforms that provided internet information services and engaged in other foreign-ownership-restricted businesses through certain PRC domestic companies, whose equity interests were held by certain management members of the Company (“Nominee Shareholders”). The Company obtained control over these PRC domestic companies by entering into a series of contractual arrangements, including exclusive options agreements, power of attorney, exclusive business cooperation agreements (which includes arrangements which provide for services to these domestic companies), equity pledge agreements and loan agreements, with these PRC domestic companies and their respective Nominee Shareholders. As a result, the Company which maintained the ability to control these PRC domestic companies was entitled to substantially all of the economic benefits from these PRC domestic companies and was obligated to absorb the expected losses of these PRC domestic companies. Management concluded that these PRC domestic companies were VIEs of the Company, of which the Company was the ultimate primary beneficiary. As such, the Group consolidated the financial results of these PRC domestic companies and their subsidiaries during the relevant periods.

Prior to the Divestiture Transactions, the Group primarily operated 2B and 2C online platforms through one of the former VIEs, Youxin Internet (Beijing) Information Technology Co., Ltd. (“Youxin Hulian”) via the contractual agreements. In January 2015, the MIIT eliminates the restrictions on foreign ownership in the SHFTZ Notice for enterprises in Shanghai Pilot Free Trade Zone that provide online data processing and transaction processing services (operating E-commerce) under value-added telecommunications services. Certain eligible WFOEs and subsidiaries of WFOEs applied for and obtained the VATS Licenses to conduct E-commerce in 2015 and 2016, and they operated the 2B and 2C online platforms since then. After the Divestiture Transactions, current business is operated by the Company’s subsidiaries.

In March 2022, in order to streamline the corporate structure and considering the changing regulatory environment and the Group’s current business does not require the use of VIE structure, the Company terminated the historical contractual arrangements with its former VIEs (“Restructuring”). Pursuant to the Restructuring, the wholly owned subsidiaries that previously had contractual arrangements with the former VIEs and their respective shareholders purchased all equity interests held by such shareholders in the former VIEs. Accordingly, all contractual arrangements that enabled such shareholders to exercise effective control over the former VIEs, receive substantially all of the economic benefits of the former VIEs and have exclusive options to purchase all or part of the equity interests in the former VIEs, were effectively terminated.

As a result of the Restructuring, the former VIEs have become wholly owned subsidiaries as of March 31, 2022. The Group currently operates its business in China directly through subsidiaries, and the Restructuring does not have significant impact on the Group’s current business. For the year ended December 31, 2019, the three months ended March 31, 2020, and the fiscal years ended March 31, 2021 and 2022, financial position, result of operations and cash flow activities of former VIEs were immaterial to the consolidated financial statements. In all periods presented, no service fee was accrued or paid by the former VIEs as the services provided were not material and no mandatory fee was provided for under prior VIE service arrangements.

Liquidity

The Company has incurred net losses from continuing operations since the inception. The Company incurred net losses from continuing operations of RMB1,327.7 million, RMB2,034.4 million, RMB717.0 million and RMB143.2 million for the year ended December 31, 2019, for the three months ended March 31, 2020 and for the fiscal years ended March 31, 2021 and 2022, respectively. Accumulated deficit amounted to RMB15,910.0 million and RMB16,053.3 million as of March 31, 2021 and 2022, respectively. Net current liabilities amounted to RMB314.3 million and RMB424.3 million as of March 31, 2021 and 2022, respectively.

As of the issuance date of the annual consolidated financial statements for the fiscal year ended March 31, 2022, the Company believes the rental commitment for the new inspection and reconditioning center (“IRC”) in Hefei will not commence in the next 12 months, and despite projected ongoing negative operating cash flows, its cash and cash equivalents, and cash proceeds received or expected to be received from its recent financing transactions are sufficient to fund its operating expenses, capital requirements and other contractual obligations for the next 12 months. The Company is entitled to an investment amount of US$100 million for the subscription of its senior convertible preferred shares, of which US$71.4 thousand for par value of the issued shares was received upon the closing. The remaining US$9.9 million, US$30 million, US$20 million and US$40 million will be received in September, December 2022, March and June 2023, respectively (Note 26). Concurrently, in order to settle a long-term borrowing due in December 2022, the Company has entered into a loan agreement (which pledges an equity interest in an investment) for a total of RMB290 million with a third party in July 2022 (Note 8). The Company also issued Class A ordinary shares to 58.com Holdings Inc. (“58.com”) in exchange for the full release of the Company's obligations of US$63 million under the 2024 Notes which was further modified in July 2021 (Note 12). Meanwhile, the Company continues to optimize its cost and expense structure to improve the capital and operating efficiency of its business process.

Considering all the actions mentioned above, which have alleviated the substantial doubt of the ability to continue as a going concern, the Company believes that its current cash and cash equivalents, cash proceeds received (or to be received) from recent financing transactions and the anticipated cash flows from operations will be sufficient to meet its anticipated working capital requirements and contractual obligations for the next twelve months and the consolidated financial statements of the Company have been prepared on a going concern basis.

Additionally, as discussed in Note 10 and Note 12, the Company has a total of RMB173.4 million consideration payable to WeBank and US$81.9 million (equivalent to RMB519.2 million) long-term debt, among which RMB83.4 million in consideration payable to WeBank and US$72.8 million (equivalent to RMB461.5 million) in long-term debt will mature after twelve months following the issuance of the consolidated financial statements. In these obligations, the payments of RMB30 million in consideration payable to WeBank and US$27.3 million (equivalent to RMB173.1 million) in long-term debt will be due in December 2023. These obligations, the rental commitment post completion of the Hefei IRC as disclosed in Note 25, and the probability that the Company will continue to incur, for the foreseeable future, net losses and negative cash flows from operations will significantly impact the Company’s liquidity at such time in the future. Concurrently, as part of the shares subscription agreement the Company entered into with NIO Capital and Joy Capital in June 2021, both investors retain their rights to exercise the warrants to purchase senior convertible preferred shares of up to US$165 million. Management’s plan to address liquidity matters relating to the maturity of these obligations and expected negative operating cash flows include: 1) negotiating with the warrants holders to exercise their warrants; 2) restructuring existing obligations to reduce cash payments; and 3) working on several other initiatives to further improve its working capital efficiency.

PRINCIPAL ACCOUNTING POLICIES

12 Months Ended

Mar. 31, 2022

PRINCIPAL ACCOUNTING POLICIES

PRINCIPAL ACCOUNTING POLICIES

2. PRINCIPAL ACCOUNTING POLICIES

2.1 Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

Significant accounting policies followed by the Group in the preparation of its accompanying consolidated financial statements are summarized below.

2.2 Discontinued operations

A component of a reporting entity or a group of components of a reporting entity that are disposed or meet all of the criteria to be classified as held for sale in accordance with ASC 205-20-45-1E Initial Criteria for Classification of Held for Sale, such as the management, having the authority to approve the action, commits to a plan to sell the disposal group, should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Discontinued operations are reported when a component of an entity comprising operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity is classified as held for disposal or has been disposed of, if the component either (1) represents a strategic shift or (2) have a major impact on an entity’s financial results and operations. Examples include a disposal of a major geographical location, line of business, or other significant part of the entity, or disposal of a major equity method investment.

Non-current assets or disposal groups are classified as assets held for sale when the carrying amount is to be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the asset or disposal group must be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such asset.

Once a disposed business meets the criteria of held for sales and be reported as a discontinued operation, according to ASC 205-20-45-10, in the period(s) that a discontinued operation is classified as held for sale and for all prior periods presented, the assets and liabilities of the discontinued operation shall be presented separately in the asset and liability sections, respectively, of the Consolidated Balance Sheets.

In the consolidated statements of comprehensive loss, results from discontinued operations are reported separately from the income and expenses from continuing operations and prior periods are presented on a comparative basis. Cash flows for discontinuing operations are presented separately (Note 3).

The following accounting policies support the basis of presentation of the Divestiture Transactions disclosed in Note 1.

Divestiture of 2C intra-regional business and loan-facilitation related service

On July 12, 2019 and September 30, 2019, the Company entered into a binding term sheet and definitive agreements with Golden Pacer relating to the divestiture of its entire 2C intra-regional business and loan facilitation related service, respectively. On April 23, 2020, the Company entered into supplemental agreements with Golden Pacer to modify and supplement certain terms and conditions in connection with the divestiture. Pursuant to the series of agreements, the Company has divested its entire 2C intra-regional business to Golden Pacer and ceased to provide loan facilitation related guarantees starting from the three months ended December 31, 2019 (Note 3). Results of operations related to the discontinued operations have been recorded in “loss from discontinued operations” in the Consolidated Statements of Comprehensive Loss.

Divestiture of 2B business

On March 24, 2020, the Company entered into definitive agreements with 58.com to sell its 2B online used car auction business. The transaction contemplated under the definitive agreements was closed in April 2020 (Note 3). Results of operations related to discontinued operations have been recorded in “loss from discontinued operations” in the Consolidated Statements of Comprehensive Loss.

2.3 Basis of consolidation

The Group’s consolidated financial statements include the financial statements of the Company, its subsidiaries and its former VIEs for which the Company is the primary beneficiary.

A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; has the power to appoint or remove the majority of the members of the board of directors; to cast a majority of votes at the meeting of the board of directors or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.

A VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, bears the risks of, and enjoys the rewards normally associated with, ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity.

All transactions and balances among the Company, its subsidiaries, and its former VIEs have been eliminated upon consolidation.

2.4 Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets, long-lived assets and liabilities at the dates of the financial statements and the reported amount of revenues and expenses during the reporting periods. On an ongoing basis, the Company’s management reviews these estimates based on information that is currently available. Changes in facts and circumstances may cause the Company to revise its estimates. Accounting estimates reflected in the Group’s consolidated financial statements include, but are not limited to, the fair value of senior convertible preferred shares, warrant liabilities, forward contracts, share-based compensation arrangements, fair value of the long-term investment, provision for credit losses for loans recognized as a result of payments under guarantees and other receivables, the useful lives of property, equipment and software, incremental borrowing rate applied in lease accounting, inventory provision and valuation allowances for deferred tax assets. Given that changes in circumstances, facts and experience may cause the Group to revise its estimates, actual results could differ from those estimates.

2.5 Fair value measurements

Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value:

Level 1 — Quoted prices (unadjusted) for identical assets or liabilities in active markets

Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data

Level 3 — Unobservable inputs which are supported by little or no market activity

Financial instruments of the Company are primarily comprised of cash and cash equivalents, accounts receivable, loans recognized as a result of payments under guarantees, current portion of long-term borrowings, accounts payable, guarantee liabilities, warrant liabilities and forward contracts. As of March 31, 2021 and 2022, except for warrant liabilities and forward contracts which are measured at fair value, the carrying values approximated the fair values of these instruments because of their generally short maturities. The warrant liabilities and forward contracts were recorded at the fair value at the inception date and classified as a Level 3 measurement.

2.6 Foreign currencies

The Group uses Renminbi (“RMB”) as its reporting currency. The USD (“US$”) is the functional currency of the Group’s entities incorporated in Cayman Islands, British Virgin Islands and Hong Kong, and the RMB is the functional currency of the Group’s PRC subsidiaries.

Transactions denominated in other than the functional currencies are translated into the functional currency of the entity at the exchange rates quoted by authoritative banks prevailing on the transaction dates. Exchange gains and losses resulting from those foreign currency transactions denominated in a currency other than the functional currency are recorded in the Consolidated Statements of Comprehensive Loss.

The financial statements of the Group are translated from the functional currency into RMB. Assets and liabilities denominated in foreign currencies are translated into RMB using the applicable exchange rates at the balance sheet date. Equity accounts other than earnings generated in current period are translated into RMB at the appropriate historical rates. Revenues, expenses, gain and loss are translated into RMB using the periodic average exchange rates. The resulting foreign currency translation adjustments are recorded in accumulated other comprehensive income as a component of shareholders’ deficit.

2.7 Convenience translation

Translations of Consolidated Balance Sheets, the Consolidated Statements of Comprehensive Loss and the Consolidated Statements of Cash Flows from RMB into US$ as of and for the fiscal year ended March 31, 2022 are solely for the convenience of the readers and were calculated at the rate of US$1.00=RMB6.3393 on March 31, 2022 as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on March 31, 2022, or at any other rate.

2.8 Cash and cash equivalents

Cash includes currency on hand and deposits held by financial institutions that can be added to or withdrawn without limitation. Cash equivalents represent short-term, highly liquid investments that are readily convertible to known amount of cash and with original maturities from the date of purchase of generally three months or less.

2.9 Restricted cash

Cash restricted as to withdrawal or for use or pledged as security is reported separately on the face of the Consolidated Balance Sheets. In the ordinary course of business, the third-party financing partners offer financing solutions to buyers (the “Borrowers”) and the Company is required to provide a guarantee (Note 2.11). As a result, the Company, as the guarantor, is required to maintain a separate guarantee fund, held as an escrow account with the third-party financing partners. This guarantee fund is required to be maintained at a fixed percentage of the balance of all loans outstanding. Beginning in the three months ended December 31, 2019, the Group no longer provided loan facilitation related services through its online platform.

As of March 31, 2022, restricted cash primarily represents cash reserved in relation to certain litigations.

2.10 Inventory

Inventory consists primarily of used vehicles and is stated at the lower of cost or net realizable value. Inventory cost is determined by specific identification and includes acquisition cost, direct and indirect reconditioning costs and inbound transportation expenses. Net realizable value represents the estimated selling price less costs to complete, dispose and transport the vehicles. Each reporting period the Company recognizes any necessary adjustments to reflect vehicle inventory at the lower of cost or net realizable value in the cost of revenues in the Consolidated Statements of Comprehensive Loss. Total carrying amount of used vehicles was RMB69.6 million and RMB426.3 million as of March 31, 2021 and 2022, respectively. Total amount of inventory provision recorded for used vehicles were nil for both the year ended December 31, 2019 and the three months ended March 31, 2020, and RMB4.7 million and RMB 14.2 million, the fiscal years ended March 31, 2021 and 2022, respectively.

2.11 Guarantee liabilities

Before the three months ended December 31, 2019, the third-party financing partners offered financing solutions to the Borrowers and the Company was required to provide a guarantee in the event of default.

Before January 1, 2020, the financial guarantee was within the scope of ASC Topic 460, Guarantees. The portion of the contract consideration that relates to ASC 460 must first be allocated to the guarantee, with the residual portion of the transaction price being recorded under ASC Topic 606, “Revenue from Contracts with Customers”. The liability was recognized at fair value at the inception of the guarantee.

Subsequent to the initial recognition of the guarantee liabilities, the Company’s guarantee obligations were measured in a combination of two components: (i) ASC 460 component and (ii) ASC 450 component. The liability recorded based on ASC 460 was determined on a contract-by-contract basis and was reduced as the Company was released from the underlying risk, meaning as the loan was repaid by the Borrower or when the financing partners were compensated in the event of a default. The liability was reduced only as the Company was released from the underlying risk. This component was a stand ready obligation which was not subject to the probable threshold used to record a contingent obligation. The other component was a contingent liability determined using historical experience of borrower defaults, representing the obligation to make future payments, measured using the guidance per ASC 450, Contingencies. Subsequent to the initial recognition, the guarantee obligation was measured at the greater of the amount determined per ASC 460 (guarantee liability) and the amount determined based on ASC 450 (contingent liability). As stated in ASC 460-10-35-1, the guarantee liability should generally be reduced by recording a credit to net income as the guarantor was released from the guaranteed risk. Accordingly, the guarantee liabilities were recognized in “losses from guarantee liabilities” in the Consolidated Statements of Comprehensive Loss by a systematic and rational amortization method, e.g. over the term of the loan.

Effective on January 1, 2020, the Company adopted ASU 2016-13 using the modified retrospective transition approach (Note 2.26). The initial adoption resulted in a recognition of a separate contingent liability in the full amount, in addition to financial guarantee liabilities measured under ASC 460. Subsequent to the initial adoption, the Company’s guarantee obligations are measured in separated two components (i) ASC 460 component and (ii) ASC 326 component. In accordance with ASC 460-10-30-5, both guarantee obligations and an allowance for credit losses (calculating using the current expected credit losses – CECL - impairment model) are recorded for financial guarantees in the scope of ASC 326. The liability recorded based on ASC 460 is determined on a contract-by-contract basis and is reduced as the Company is released from the underlying risk, meaning as the loan is repaid by the Borrower or when the financing partners are compensated in the event of a default. The liability is reduced only as the Company is released from the underlying risk. This component is a stand ready obligation which is not subject to the probable threshold used to record a contingent obligation. The other component is a contingent liability determined using the CECL model per ASC 326 Financial Instruments – Credit Losses. Subsequent to the initial recognition, ASC 460 component is recorded in “other operating income” in the Consolidated Statements of Comprehensive Loss as the guarantor is released from the guaranteed risk by a systematic and rational amortization method, e.g. over the term of the loan. ASC 326 component is re-measured at each period end and recognized in provision for credit loss in Consolidated Statements of Comprehensive Loss.

2.12 Property, equipment and software, net

Property, equipment and software are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the following estimated useful lives, taking into account any estimated residual value:


Electronic equipment	3 years
Furniture	5 years
Vehicles and motors	4 years
Software	5 years
Leasehold improvement	lesser of the term of the lease or the estimated useful lives of the assets

The Company recognizes the gain or loss on the disposal of property, equipment and software in the Consolidated Statements of Comprehensive Loss.

2.13 Intangible assets, net

Intangible assets mainly represent acquired software copyrights. These intangible assets are carried at acquisition cost less accumulated amortization and amortized on a straight-line basis over their estimated useful lives of the respective assets, which is usually 5 years.

2.14 Long-term investments

In accordance with ASC 323 Investment—Equity Method and Joint Ventures, the Company accounts for an equity investment over which it has significant influence but does not own a majority of the equity interest or otherwise controls and the investments are either common stock or in substance common stock using the equity method. The Company’s share of the investee’s profit and loss is recognized in the earnings of the period.

The Company holds investments in privately held companies in the form of equity securities without readily determinable fair values and in which the Company does not have a controlling interest or significant influence. In accordance with ASC 321 Investment- Equity Securities, investments in equity securities without readily determinable fair values are initially recorded at cost and are subsequently adjusted to fair value for impairments and price changes from observable transactions in the same or a similar security from the same issuer.

Pursuant to ASC 321, for equity investments measured at fair value with changes in fair value recorded in earnings, the Company does not assess whether those securities are impaired. For equity investments without readily determinable fair value for which the Company has elected to use the measurement alternative, at each reporting period, the Company makes a qualitative assessment of whether the investment is impaired at each reporting date, applying significant judgement in considering various factors and events including a) adverse performance of investees, credit rating, asset quality, or business prospects of the investee; b) adverse industry developments affecting investees; and c) adverse regulatory, social, economic or other developments affecting investees. If a qualitative assessment indicates that the investment is impaired, the Company estimates the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Company recognizes an impairment loss in earnings equal to the difference between the carrying value and fair value.

2.15 Impairment of long-lived assets

Long-lived assets including property, equipment and software with definite lives are assessed for impairment, whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable in accordance with ASC 360, Property, Plant and Equipment. When these events occur, the Group will assess whether an impairment of the long-lived assets in question exists by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the asset and its eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the asset, the Group recognizes an impairment loss based on the excess of the carrying value of the asset over the fair value of the asset. No impairment of long-lived assets was recognized for the year ended December 31, 2019, the three months ended March 31, 2020, or the fiscal years ended March 31, 2021 and 2022.

2.16 Revenue recognition

Prior to the Divestiture Transactions during 2019 and 2020 disclosed in Note 1, the Group used to primarily engage in operating used car e-commerce platforms through its mobile applications (Uxin Used Car / Uxin Auction) and websites (www.xin.com / www.youxinpai.com), facilitating used car transaction services (2B / 2C) and facilitating financing solutions offered by third-party financing partners to buyers for their used car purchases (2C). Revenues generated from these businesses were presented as three revenue streams as Transaction facilitation revenue and Loan facilitation revenue to consumers (2C), and Transaction facilitation revenue to business (2B). Meanwhile, the Group has been focusing more on the 2C cross-regional service business since second half of 2018. The cross-regional transactions mean transactions completed on the Company’s platform where the buyer completes the purchase of a car without having physically inspected the car on-site, which primarily comprise transactions where the buyer is located in a different city from which the car purchased. Whereas the 2C intra-regional transactions mainly include similar transactions when the consumers are located in the same city as where the cars are located.

Starting from the three months ended September 30, 2019, given the divestiture of 2C intra-regional business and loan facilitation service to Golden Pacer (Note 1), the Group modified its existing/ surviving cross-regional service contract and no longer provides loan guarantee services. Therefore, the cross-regional business was renamed as the Online used car transaction business. Accordingly, the revenues generated from the Online used car transaction business were renamed as Commission revenue, and Value-added service revenue starting in the three months ended September 30, 2019 and beyond. Since September 2020, the Group started to shift to “inventory-owning” model where the Group sells its own inventory of used vehicles, and this model was further updated since March 2021 as the Group started to acquire used vehicles directly from individuals. Since then, used vehicles sold directly to customers have been presented as Retail vehicle sales revenue, while used vehicles sold to wholesalers have been presented as Wholesale vehicle sales revenue.

For the divestiture of 2B and 2C business, the Group presented the results as discontinued operations for all the related periods presented (Note 3).

Besides these four main revenue streams, the Group has other revenue generated from the other services and businesses throughout all periods.

The Group adopted ASC Topic 606, “Revenue from Contracts with Customers” for all periods presented. Consistent with the criteria of Topic 606, the Group recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. To achieve that core principle, an entity should apply five steps defined under Topic 606. The Group assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent. Revenue arrangements with multiple performance obligations are divided into separate units of accounting. The Company considered appropriate method to allocate the transaction price to each performance obligations, based on the relative standalone selling prices of the services provided. In estimating the standalone selling price for the services that are not directly observable, the Company considered the suitable methods included in ASC 606-10-21-34, and determined the adjusted market assessment approach is the most appropriate method. When estimating the relative standalone selling prices, the Group considers selling prices of similar services. Revenue is recognized upon transfer of control of these promised services to a customer.

The Group, from time to time, provides incentives to consumers. These incentives are given in the form of discount coupon to consumers. As these incentives were provided without any distinct good or service in return, these incentives have been recorded as reduction of revenue, pursuant to the guidance under ASC 606.

Revenue is recorded net off cash incentives and value-added-tax collected from customers.

Online used car transaction services (formerly known as “2C cross-regional business”) after the divestiture of intra-regional business and loan facilitation business

The Company uses www.xin.com as its 2C online platform, which assists in publishing the used cars of car dealers (the “Dealer”) for consumers (the “Consumer”). The online used car business mainly includes three services as follows:

Broker transaction (or commission-related service): The Company provides used car purchase assistance, used car inspection services, title transfer and title registration service, as well as logistics service during the purchase process. The Company charges the Consumer the commission fees based on agreed percentage of final car sales price;

Value-added service: For the Consumers that have financing needs, the Company provides additional services to Consumers based on agreed amount or agreed percentages, including but not limited to the following:

1. Channel service:

- Uxin provides advice on financial solutions and refer Consumers to financing platforms

- Uxin helps check the documents in relation to application of financial products prepared by Consumers

2. Safety-guaranteed service:

- Uxin provides GPS purchase and installation service

- Uxin provides other assistances to Consumers if necessary, such as sharing the GPS trajectory when there is a car theft, etc.

3. Mortgage service:

- Uxin assists in mortgage registration process if needed

- Uxin assists on the purchase of insurance policy offered by insurance company

Warranty service: is provided for selected cars sold with Uxin’s certificate program to provide certain warranty service, including 1-year or 20,000-kilometer warranty covering repair of 15 major structural components.

The Company determined the Consumer as customer of the online used car business in accordance with ASC 606, the Company collects the fees for both of the Broker transaction service and Value-added service from the Consumer. The Company may sell the Broker transaction service alone but does not sell the Value-added service or warranty service individually. Value-added service and warranty service are sold together with the Commission-related service. Each of these services is identified as a separate performance obligation. The Company allocates the transaction price to each of these performance obligations on a relative standalone selling price basis or market price, based on different type of the contract or combined contracts.

The Company recognizes both the Commission revenue from the Broker transaction service and the Value-added services upon the closing of car sale; For warranty service (6-month and 1-year types only), since the Consumer receives, consumes and benefits the warranty service simultaneously when the Company performs the service, therefore the Company recognizes the warranty revenue over the warranty period, i.e. 6-month or 1-year period. Revenue derives from value-added service and warranty service were collectively reported as Value-added service revenue on the Company’s Consolidated Statement of Comprehensive Loss.

Vehicle sales business since September 2020

Retail vehicle sales business

The Company sells used vehicles directly to its customers through its ecommerce platform (www.xin.com). The Company procures used cars by analyzing the extensive user behavioral, used car and transactional data aggregated on its platform over the years. This enables the Company to selectively build its inventory of used cars with value-for-money performance and have greater flexibility in offering more competitive pricing to individual consumer (the “Consumer”).

The prices of used vehicles are set forth in the customer contracts at stand-alone selling prices which are agreed upon prior to delivery. The Company satisfies its performance obligation for used vehicles sales upon the delivery when the Consumer obtains control of the underlying vehicles. The Company receives payment for used vehicle sales directly from the Consumer at the time of sale. Payments received prior to delivery or pick-up of used vehicles are recorded as “Other payables and other current liabilities” within the Consolidated Balance Sheets.

Wholesale vehicle sales business

The Company sells vehicles to wholesalers through offline dealership. These vehicles sold to wholesalers are primarily acquired from individuals that do not meet the Company’s retail standards to list and sell through its e-commerce platform, and therefore, sold through offline dealership. The Company satisfies its performance obligation and recognizes revenue for wholesale vehicle sales at the point in time when the wholesale purchasers obtain control of the underlying vehicles. The payments are received when the vehicles are sold.

Others

Other revenue is mainly comprised of commissions earned from the Group’s financing and insurance partners as well as revenue from advertising and vehicle transportation revenue earned from the Group’s vehicle logistics business. Since September 2020, warranty service revenue is recorded in the “Others”.

Intra-regional and loan facilitation business prior to the Divestiture Transactions (formerly known as “2C business”) and 2B business

Given the divestiture of the Group’s 2C intra-regional business and loan-facilitation related service, the Group presented the results of these businesses as discontinued operation for the year of 2019 and all the prior comparable periods (Note 3) based on the following recognition policy:

The Company’s online platform and offline infrastructure facilitates used car dealers to list and sell its used cars to individual consumers via cross-regional service and intra-regional service. The Company started its cross-regional transaction facilitation service in the three months ended March 31, 2018. The cross-regional transaction facilitation services help individual consumers complete their purchases of cars without having the consumers physically inspect the cars on-site, which primarily apply for the transactions when the consumers are located in different cities from where the cars are located; whereas intra-regional transaction facilitation services cater to local individual consumers. For each used car sold through intra-regional 2C business with financing solutions and each used car sold through cross-regional 2C business with or without financing solutions, the Company charges a transaction facilitation service fee to the consumer that equals the higher of a certain percentage of the price of the car and a minimum fee. The Company used to charge transaction facilitation service fees to car dealers for each used car sold through its intra-regional 2C business without financing solutions. Starting in the second half of 2018, to further facilitate market expansion, the Company gradually discontinued charging car dealers transaction facilitation service fees in intra-regional transactions without financing solutions. The transaction facilitation service fee is for services provided through its platform in connecting consumers with used car sellers, facilitating car sales to consumers and providing after-sale warranty. The Company’s offline infrastructure provides consumers with vehicle inspection, payment and settlement, delivery and fulfilment services, and warranty services. The Company has identified two performance obligations for these transactions—warranty services and other transaction facilitation services. The revenue relating to warranty services is deferred and recognized over the warranty period as the Company stands ready to perform during that period. Other than the warranty services provided, the transaction facilitation revenue is recognized at a point in time when the service is rendered, which occurs upon the completion of the successful transaction.

Given the divestiture of the Group’s entire 2B online used car auction business occurred in the three months ended March 31, 2020, the Group presented the results of the 2B business as discontinued operation for all the periods presented (Note 3) based on the following revenue recognition policy:

Launched in 2011, the Company’s 2B business, Uxin Auction (“优信拍”), caters to business buyers with a comprehensive suite of solutions, connecting businesses with one another across China, helping them source vehicles, optimizing their turnover and facilitating cross-regional transactions. Cars are sold through online Uxin Auctions. The Group earns transaction facilitation income upon each successful close of an auction from buyers. Transaction facilitation income, which is a certain percentage of the selling price of the underlying car or a minimum amount is recognized at a point in time following the transfer of control of such services to the customer, which occurs upon the completion of a successful transaction. As the Company does not assume inventory risk for the used cars, it is considered to be an agent in accordance with ASC 606. Accordingly, the Company recognizes the transaction facilitation income when the performance obligation is satisfied.

Remaining performance obligations

Revenue allocated to remaining performance obligations represents that portion of the overall transaction price that has been received (or for which the Group has an unconditional right to payment) allocated to performance obligations that the Group has not yet fulfilled, which is presented as deferred revenue that has not yet been recognized. As of March 31, 2021 and 2022, the aggregate amount of the transaction price allocated to remaining performance obligations was RMB5.4 million and RMB4.1 million, respectively, reflecting the Group’s remaining obligations. The Group expects to recognize approximately 100% of the revenue over the next 12 months.

2.17 Value-added-tax (“VAT”) and surcharges

The Company’s subsidiaries and former VIEs are subject to value-added tax and related surcharges on the revenues earned for services provided in the PRC. The applicable value-added-tax rate for general VAT payers is set out in the following table.


Type of service		Applicable VAT rate (%)
Vehicle sales		0.5% - 6%
Commission		6%
Value-added service		6%
Other services		6%

The surcharges (i.e. urban construction and maintenance tax, educational surtax, local educational surtax), vary from 5% to 12% of the value-added-tax depending on the tax payer’s location. The surcharges are recorded in the “cost of revenue” in the Consolidated Statements of Comprehensive Loss.

2.18 Cost of revenues

Prior to September 2020, cost of revenues consists of salaries and benefits expenses, cost of title transfer and registration, delivery and logistics cost, rental for transaction centers, platform maintenance cost, GPS tracking device costs, cost of warranty services provided, etc.

Starting from September 2020, the Company started to build its own used vehicles inventory. After then, cost of revenues include the cost to acquire used vehicles and direct and indirect vehicle reconditioning costs associated with preparing the vehicles for resale. Cost of revenues also includes any necessary adjustments to reflect vehicle inventory at the lower of cost or net realizable value.

2.19 Sales and marketing expenses

Sales and marketing expenses primarily consist of salaries and benefits expenses for sales and marketing personnel, advertising and promotion expenses and warranty expenses. Advertising and promotion expenses primarily include branding advertisements, online traffic acquisition costs and costs incurred in other marketing activities. Due to the adoption of the inventory-owing model since September 2020, most salaries and benefits for employees engaged in aftersales services and costs relating to outbound logistics were classified as “sales and marketing expense” whereas before such costs were classified as “cost of revenues”.

Advertising costs are expensed as incurred and the total amounts charged to the Consolidated Statements of Comprehensive Loss amounted to approximately RMB443.6 million, RMB50.0 million, RMB128.9 million and RMB58.7 million for the year ended December 31, 2019, the three months ended March 31, 2020, the fiscal years ended March 31, 2021 and 2022, respectively.

2.20 Research and development expenses

Research and development expenses primarily consist of salaries and benefits expenses, fees for outsourced technical services and depreciation of servers and computers relating to research and development.

All research and development costs are expensed as incurred. Software development costs required to be capitalized under ASC 350-40, Internal-Use Software, were not material to the consolidated financial statements.

2.21 General and administrative expenses

General and administrative expenses primarily consist of salaries and benefits and share-based compensation for employees engaged in management and administration positions or involved in general corporate functions, office rental, professional service fees and depreciation.

2.22 Share-based compensation

The Company grants share options, restricted shares and restricted share units (“RSUs”) to eligible employees, director and execute officers. All share-based awards are measured at fair value on the grant date. The share-based compensation expenses have been categorized as either cost of revenues, sales and marketing expenses research and development expenses, or general and administrative expenses, depending on the job functions of the grantees.

Share Options Granted

The Company follows ASC 718 to determine whether a share option should be classified and accounted for as a liability award or equity award. All grants of share-based awards classified as equity awards are recognized in the financial statements based on their grant date fair values which are calculated using an option pricing model. The Company classifies the share-based awards granted to employees as equity award and has elected to recognize compensation expense on share-based awards with service condition on a graded vesting basis over the requisite service period, which is generally the vesting period.

The binomial option-pricing model is used to measure the value of share options. The determination of the fair value is affected by the fair value of the ordinary shares as well as assumptions regarding a number of complex and subjective variables, including the expected share price volatility, actual and projected employee and nonemployee share option exercise behavior, risk-free interest rates and expected dividend yield. Binomial option-pricing model incorporates the assumptions about grantees’ future exercise patterns. The fair value of these awards was determined by management with the assistance from an independent valuation firm using management’s estimates and assumptions.

Restricted Shares and RSUs

For the restricted shares, the awards are measured at fair value on the grant date. Share-based compensation expense is recognized using the straight-line method over the requisite service period or immediately at the grant date if no vesting conditions are required.

For grants of RSUs with certain market conditions, it is classified as equity awards and recognized in the financial statements based on their grant date fair values which are determined using the Monte Carlo valuation model, which incorporates various assumptions including expected stock price volatility, risk-free interest rates, and expected timing and proceeds received due to the exercise of warrants and settlement of forward contracts (Note 17). Related expenses are recognized over the derived service period determined based on valuation techniques that are used to estimate fair value, and is not adjusted if the market condition is not met, so long as the requisite service is provided.

The assumptions used in share-based compensation expense recognition represent management’s best estimates, but these estimates involve inherent uncertainties and application of management judgment. If factors change or different assumptions are used, the share-based compensation expenses could be materially different for any period. Moreover, the estimates of fair value of the awards are not intended to predict actual future events or the value that ultimately will be realized by grantees who receive share-based awards. In accordance with ASU 2016-09, the Group made an entity-wide accounting policy election to account for forfeitures when they occur.

2.23 Taxation

Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions.

Deferred income taxes are recognized for temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements, net operating loss carries forwards and credits. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in which temporary differences are expected to be received or settled. The effect on deferred tax assets and liabilities of changes in tax rates is recognized in the statements of comprehensive loss in the period of the enactment of the change.

The Group considers positive and negative evidence when determining whether a portion or all of its deferred tax assets will more likely than not be realized. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry-forward periods, its experience with tax attributes expiring unused, and its tax planning strategies. The ultimate realization of deferred tax assets is dependent upon its ability to generate sufficient future taxable income within the carry-forward periods provided for in the tax law and during the periods in which the temporary differences become deductible. When assessing the realization of deferred tax assets, the Group has considered possible sources of taxable income including (i) future reversals of existing taxable temporary differences, (ii) future taxable income exclusive of reversing temporary differences and carry-forwards, (iii) future taxable income arising from implementing tax planning strategies, and (iv) specific known trend of profits expected to be reflected within the industry.

The Group recognizes a tax benefit associated with an uncertain tax position when, in its judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority. For a tax position that meets the-more-likely-than-not recognition threshold, the Group initially and subsequently measures the tax benefit as the largest amount that the Group judges to have a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority. The Group’s liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances, such as the progress of tax audits, case law developments and new or emerging legislation. Such adjustments are recognized entirely in the period in which they are identified. The Group’s effective tax rate includes the net impact of changes in the liability for unrecognized tax benefits and subsequent adjustments as considered appropriate by management. The Group classifies interest and penalties recognized on the liability for unrecognized tax benefits as income tax expense. Undistributed earnings are expected to be indefinitely reinvested for the foreseeable future, if any.

2.24 Loss per share

Basic loss per share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, the net loss is allocated between ordinary shares and other participating securities, including senior convertible preferred shares, based on their participating rights. Net loss is not allocated to other participating securities if based on their contractual terms they are not obligated to share in the loss. The diluted loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted method based on the nature of such securities. Ordinary equivalent shares are not included in the denominator of the diluted loss per share calculation when inclusion of such shares would be anti-dilutive.

2.25 Operating leases

The Company applied ASC 842, Leases, on January 1, 2019 on modified retrospective basis and has elected not to recast comparative periods. The Company has elected the package of practical expedients on the adoption date, which allows the Company not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any expired or existing leases. The Company determines if an arrangement is or contains a lease at inception. Operating leases are primarily for offices and stores and are included in Right-of-use assets, net, Operating lease liabilities, current and Operating lease liabilities, non-current on its Consolidated Balance Sheets. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and Operating lease liabilities represent obligation to make lease payment arising from the lease. The operating lease right of use assets and liabilities are recognized at lease commencement date based on the present value of lease payment over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments. The right of use assets also includes any lease payments made. The Company’s lease term may include options to extend or terminate the lease. Renewal options are considered within the operating lease right of use assets and liabilities when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

For operating lease with a term of one year or less, the Company has elected to not recognize a lease liability or lease right of use asset on its Consolidated Balance Sheets. Instead, it recognizes the lease payment as expense on a straight-line basis over the lease term. Short-term lease costs are immaterial to its Consolidated Statements of Comprehensive Loss. The Company has operating lease agreements with insignificant non-lease components and has elected the practical expedient to combine and account for lease and non-lease components as a single lease component.

2.26 Provision for credit losses

The Company has several types of financial assets and liabilities that are subject to ASC 326’s new CECL model. The CECL reserves for credit loss represents the Company’s best estimate of the expected lifetime credit losses for accounts receivable, loans recognized as a result of payments under guarantees and other receivables as of the balance sheet dates. The adequacy of the reserves for credit losses is assessed quarterly; and the assumptions and models used in establishing the allowance are evaluated regularly. Because credit losses can vary substantially over time, estimating credit loss reserves requires us to estimate lifetime expected credit losses by incorporating historical loss experience, as well as current and future economic conditions over a reasonable and supportable period beyond the balance sheet date.

Measurement of CECL reserve

The Company estimates its CECL reserve for different financial instruments using various methods including the probability-of-default method, the loss rate method, the roll rate method and the discounted cash flow method.

•

For loans recognized as a result of payments under guarantees and financial lease receivables, the loss rate method is applied as the comprehensive product impact of Probability of Default ("PD") and Loss Given Default ("LGD").

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The roll rate model is adopted for accounts receivable; while for some other receivables which cannot be pooled with financial assets with similar risk characteristics, the reserve for credit losses is evaluated on an individual basis using the discounted cash flow method.

Note that to incorporate the forward-looking impacts based on the Company’s best macroeconomic forecasts, quantitative adjustments are applied to key parameters such as PD, LGD, loss rates, and roll rates on a collective basis. The Company groups its financial instruments into pools by credit status, product types, accounts receivable aging schedule, collateral types and other risk characteristics as appropriate in the calibration and adjustments of these parameters.

Loans recognized as a result of payments under guarantees

Assumptions Used: The credit loss allowance of Loans recognized as a result of payments under guarantees based on the Company’s assumptions regarding:

•

Loss rate: The loss percentage of the outstanding balance. It considers the historical loss information, the recent performance of this portfolio, categories of credit status (normal, attention and secondary), the collateral, and the Company’s forecasts of selected macroeconomic factors.

Sensitivity Analysis:

Changes in certain key assumptions would affect the provision for credit loss of Loans recognized as a result of payments under guarantees. The effect of the indicated change in the assumptions for the Company was as follows (in thousands) as of March 31, 2022:


Assumption	Basis Point Change	Increase/ (Decrease)
Loss rate	+/- 100	1,312/ (3,790)

2.27 Recent accounting pronouncements

New and Amended Standards Adopted by the Group

In January 2020, the FASB issued ASU 2020-01 Investments—Equity securities (Topic 321), Investments—Equity method and joint ventures (Topic 323), and Derivatives and hedging (Topic 815)—Clarifying the interactions between Topic 321, Topic 323, and Topic 815. The amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. The amendments also clarify that for the purpose of applying paragraph 815-10-15-141(a) an entity should not consider whether, upon the settlement of the forward contract or exercise of the purchased option, individually or with existing investments, the underlying securities would be accounted for under the equity method in Topic 323 or the fair value option in accordance with the financial instrument guidance in Topic 825. The standard is effective for the Company for fiscal years beginning after December 15, 2021, with early adoption permitted. The Group adopted the ASU prospectively on April 1, 2021. The impact of the adoption was not material.

New and Amended Standards not yet Adopted by the Group

In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity,”. For convertible instruments, the accounting update reduces the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current U.S. GAAP. The accounting update amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. The accounting update also simplifies the diluted earnings per share calculation in certain areas. For public business entities, the update is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. The ASU is currently not expected to have a material impact on the Group’s consolidated financial statements.