Core Viewpoint - Jiangxi Hongcheng Environment Co., Ltd. is undergoing a change in accounting estimates related to the depreciation of fixed assets, specifically the service life and residual value of its pipeline network, to better reflect the actual usage and comply with updated national standards [2][3]. Summary by Sections Management and Governance Responsibilities - The management is responsible for accurately preparing and disclosing the accounting estimate changes, ensuring no false records or misleading statements exist [2]. - The governance layer oversees the preparation process of the accounting estimate change [2]. Auditor's Responsibilities - The auditor's role is to provide a review opinion on the accounting estimate change based on the audit procedures performed [2][3]. Details of the Accounting Estimate Change - The change is based on the review of fixed asset service life and residual value, adhering to the principles of prudence and relevant accounting standards [3]. - New national standards require that the design service life of urban water supply structures should not be less than 50 years [4]. Comparison of Accounting Estimates - The depreciation period for the pipeline network has been adjusted from 15 years to 35 years, with a residual value of 3% remaining unchanged [6][7]. Impact of the Accounting Estimate Change - The change is expected to reduce the fixed asset depreciation expense by approximately 38.64 million yuan for the fiscal year 2025, with no retrospective adjustments required for prior financial reports [5][6]. - The change will also affect future depreciation amounts and total profits [6].