Circular No. 99/2025/TT-BTC dated October 27, 2025 of the Ministry of Finance guiding the enterprise accounting regime

MINISTRY OF FINANCE ——-	SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom – Happiness —————
Number: 99/2025/TT-BTC	Hanoi, October 27, 2025

 

CIRCULAR

GUIDELINES FOR BUSINESS ACCOUNTING REGIME

Pursuant to the Law on Accounting dated November 20, 2015;

Pursuant to the Law amending and supplementing a number of articles of the Law on Securities, the Law on Accounting, the Law on Independent Auditing, the Law on State Budget, the Law on Management and Use of Public Assets, the Law on Tax Administration, the Law on Personal Income Tax, the Law on National Reserves, the Law on Handling of Administrative Violations dated November 29, 2024;

Pursuant to Decree No. 29/2025/ND-CP dated February 24, 2025 of the Government stipulating the functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 166/2025/ND-CP dated June 30, 2025 of the Government on amending and supplementing a number of articles of Decree No. 29/2025/ND-CP dated February 24, 2025 of the Government stipulating the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the request of the Director of the Department of Accounting and Auditing Management and Supervision;

The Minister of Finance issued a Circular guiding the Enterprise Accounting Regime.

Chapter I

GENERAL PROVISIONS 

Article 1. Scope of regulation

This Circular provides guidance on accounting documents, accounting accounts, accounting bookkeeping, preparation and presentation of financial statements of enterprises. Determination of tax obligations of enterprises to the State Budget is carried out in accordance with the provisions of the law on tax.

Article 2. Subjects of application

1. This Circular provides accounting guidance applicable to enterprises in all fields and economic sectors.
2. Credit institutions and foreign bank branches shall implement accounting regimes or legal documents on accounting according to the guidance of the State Bank of Vietnam.

Article 3. Internal management and control

1. The creation, implementation, management and control of economic transactions arising from enterprises must comply with the provisions of law and relevant policies and mechanisms.
2. Enterprises are responsible for developing their own internal governance regulations (or equivalent documents) and organizing internal controls to clearly define the rights, obligations and responsibilities of departments and individuals involved in creating, implementing, managing and controlling economic transactions arising at the enterprise, ensuring compliance with the provisions of the law on enterprises and relevant laws.

Article 4. Currency in accounting

1. “Accounting currency unit” is Vietnamese Dong (national symbol is “đ”; international symbol is “VND”) used for accounting entries, preparation and presentation of the enterprise’s Financial Statements. In case an enterprise mainly receives and spends in foreign currency, and meets the factors specified in Clauses 2, 3, 4 of this Article, it may choose a foreign currency as the accounting currency unit for accounting entries and shall be responsible for that choice before the law.
2. Enterprises base on the following factors to determine the currency unit in accounting:
3. a) The currency that primarily affects the selling price of goods and services and is usually the currency used to list the selling price of goods and services and for payment;
4. b) The currency that primarily affects labor costs, raw material costs, production and other business costs and is often the currency used to pay for those costs.
5. In case, based on the factors in Clause 2 of this Article, the enterprise has not yet determined the accounting currency, the following factors shall also be considered as the basis for determining the accounting currency of the enterprise:
6. a) Currency used to mobilize financial resources (currency used when issuing debt instruments, equity instruments, etc.);
7. b) Currency unit regularly obtained from business activities and used for storage.
8. The accounting currency reflects the transactions, events, and conditions related to the business’s operations. Once the accounting currency is determined, the business must not change it, unless there is a major change in management and business operations leading to a material change in those transactions, events, and conditions.

Article 5. Changing currency units in accounting

1. Principles when changing currency units in accounting

When there is a major change in management and business activities leading to the accounting currency used by the enterprise no longer satisfying the factors stated in Clauses 2, 3, 4, Article 4 of this Circular , the enterprise is allowed to change the accounting currency and this change can only be made at the beginning of a new accounting year.

2. Principles for preparing Financial Statements when changing currency units in accounting
3. a) In the first accounting period since the change, the enterprise shall convert the balances of items in the accounting books and the Financial Position Statement to the new accounting currency at the average transfer buying and selling exchange rate (the average between the transfer buying and selling exchange rate) of the commercial bank where the enterprise regularly conducts transactions (the commercial bank where the enterprise has a higher frequency or value of transactions than other parties) on the date of change of accounting currency.
4. b) For comparative information (previous period column) on the Income Statement and Cash Flow Statement, the enterprise applies the average transfer exchange rate of the commercial bank where the enterprise regularly conducts transactions of the previous period adjacent to the period of change.
5. c) Enterprises must present in the Notes to the Financial Statements the reasons for changing the accounting currency and when there are impacts on the Financial Statements due to the change in accounting currency.

Article 6. Accounting work when an enterprise chooses an accounting currency other than Vietnamese Dong

1. The legal financial statements for enterprises to publicly announce and submit to competent authorities in Vietnam are financial statements presented in Vietnamese Dong. Therefore, enterprises must convert financial statements from accounting currency to Vietnamese Dong according to the instructions in Clause 3 of this Article, unless otherwise provided by law.
2. In cases where the law stipulates that the Financial Statements of an enterprise must be audited by an independent auditing organization, the audited Financial Statements are the Financial Statements presented in Vietnamese Dong.
3. Method of converting Financial Statements prepared in foreign currency into Vietnamese Dong
4. a) When converting Financial Statements prepared in foreign currency to Vietnamese Dong, enterprises must convert the indicators of the Financial Statements according to the following principles:

– Assets and liabilities are converted into Vietnamese Dong at the average transfer exchange rate of the commercial bank where the enterprise regularly conducts transactions at the end of the accounting period;

– Owner’s equity (owner’s contributed capital, capital surplus, other capital, bond conversion options) is converted into Vietnamese Dong at the actual transaction exchange rate on the date of capital contribution;

– The difference in revaluation of assets is converted into Vietnamese Dong at the actual transaction exchange rate on the valuation date;

– Undistributed profit after tax and funds allocated from undistributed profit after tax arising in each period are converted into Vietnamese Dong by calculating according to the items of the Business Performance Report. The remaining undistributed profit after tax must be converted into Vietnamese Dong at the book exchange rate of the undistributed profit after tax item;

– Items in the Income Statement and Cash Flow Statement are converted into Vietnamese Dong at the actual exchange rate at the time of the transaction. In case the average exchange rate of the accounting period is approximately the actual exchange rate at the time of the transaction (the difference does not exceed the spot exchange rate margin as prescribed by the State Bank of Vietnam), the average exchange rate of the accounting period can be applied (if selected).

1. b) Method of accounting for exchange rate differences due to conversion of Financial Statements prepared in foreign currencies into Vietnamese Dong.

Exchange rate differences arising when converting Financial Statements prepared in foreign currencies into Vietnamese Dong are recorded in the “Exchange rate differences” item in the equity section of the Financial Position Statement.

1. c) When converting Financial Statements prepared in foreign currency to Vietnamese Dong, enterprises must clearly present in the Notes to the Financial Statements the impacts arising on the Financial Statements due to the conversion of Financial Statements from foreign currency to Vietnamese Dong.

Article 7. Organization of accounting apparatus and accounting work at units affiliated to enterprises

1. Affiliated unit is a dependent unit according to the provisions of enterprise law.
2. Enterprises are responsible for organizing the accounting apparatus and deciding on accounting work for affiliated units in accordance with the characteristics of production and business activities, management requirements of their units and not contrary to the provisions of law.
3. The organization of the accounting apparatus and accounting work at the enterprise’s affiliated units is carried out as follows:
4. a) Enterprises are entitled to delegate to their affiliated units the right to record the capital that the enterprise provides to its affiliated units as liabilities or equity, to record or not to record revenue and cost of goods when circulating products, goods and services between internal stages without depending on the form of accounting documents (invoices or internal circulation documents) in accordance with the model and requirements for managing the enterprise’s production and business activities;
5. b) Enterprises have the right to delegate to their affiliated units to prepare Financial Statements or not to prepare Financial Statements. However, the Financial Statements of enterprises when submitted to competent authorities or made public as prescribed must include financial information of both the head office and the affiliated units of the enterprise regardless of whether the enterprise delegated or not to its affiliated units to prepare Financial Statements.

Chapter II

ACCOUNTING DOCUMENTS 

Article 8. General provisions on accounting documents

Accounting documents of enterprises must be made in accordance with the provisions of the Law on Accounting, documents guiding the Law on Accounting and documents amending, supplementing or replacing them.

Article 9. Accounting document form system

1. Enterprises refer to the accounting voucher system form in Appendix I issued with this Circular to apply.
2. In order to suit the characteristics of production and business activities and management requirements, enterprises are allowed to design additional or modify and supplement accounting voucher forms compared to the guidance forms in Appendix I issued with this Circular. When designing additional or modifying and supplementing accounting voucher forms of enterprises, they must ensure compliance with the provisions of Article 16 of the Law on Accounting and must fully, promptly, honestly, transparently, easily check, control and compare the assets and capital sources of the enterprise.

When designing additional or amending and supplementing accounting voucher forms, enterprises are responsible for issuing accounting regulations (or equivalent documents) on the amended and supplemented contents to serve as a basis for implementation. The regulations must clearly state the necessity of such amendments and supplements and the enterprise’s responsibility before the law for the amended and supplemented contents.

In case the enterprise does not design additional or modify or supplement the accounting voucher form, it shall apply the accounting voucher system guided in Appendix I issued with this Circular.

3. If an enterprise generates documents that are subject to regulation by other laws, the accounting documents must comply with the provisions of that law.

Article 10. Preparation, signing and control of accounting documents

1. All economic and financial transactions arising in relation to the business activities must have accounting documents. Accounting documents are only made once for each economic and financial transaction arising.
2. The preparation and signing of accounting documents shall be carried out in accordance with the provisions of the Law on Accounting, documents guiding the Law on Accounting, instructions in this Circular and amendments, supplements and replacements.
3. The delegation of authority to sign on an enterprise’s accounting documents must comply with legal regulations, management requirements, and internal governance regulations to ensure strict control and safety of the enterprise’s assets and capital and to determine the responsibilities of relevant individuals.
4. The chief accountant (or the person authorized by the chief accountant) is not allowed to sign “on behalf of” the title of the enterprise’s manager or executive on accounting documents, unless otherwise provided by law.

Chapter III 

ACCOUNTING ACCOUNT

Article 11. Accounting account system

1. Enterprises shall apply the accounting system in Appendix II issued with this Circular to serve the purpose of recording accounting for economic transactions arising at the enterprise.
2. In order to conform to the characteristics of production and business activities and management requirements of the unit, the enterprise may amend or supplement the name, code, structure and reflection content of the accounting accounts as guided in Appendix II issued with this Circular. The amendment or supplementation must ensure the classification and systematization of arising transactions according to economic content, no duplication of subjects, compliance with accounting principles as prescribed and must not change or affect the indicators and information presented in the Financial Statements.

When amending or supplementing the names, numbers, structures and contents of accounting accounts, enterprises are responsible for issuing accounting regulations (or equivalent documents) on the amended or supplemented contents to serve as a basis for implementation. The regulations must clearly state the necessity of such amendments or supplements and the enterprise’s responsibility before the law for the amended or supplemented contents.

In case the enterprise does not modify or supplement the name, number, structure and reflection content of the accounting accounts, it shall apply the accounting account system guided in Appendix II issued with this Circular.

3. This Circular only provides guidance on the content and methods of accounting for some major economic transactions. In case an enterprise has economic transactions that have not been guided by accounting in this Circular, the enterprise shall base on the content and nature of the economic transactions, the provisions of the Law on Accounting, documents guiding the Law on Accounting, Vietnamese Accounting Standards and the guiding principles in this Circular to implement.

Chapter IV

ACCOUNTING BOOKS 

Article 12. Accounting books

1. The accounting books of an enterprise must be made in accordance with the provisions of the Law on Accounting, documents guiding the Law on Accounting and documents amending, supplementing or replacing them.
2. Enterprises shall refer to and apply the accounting book form in Appendix III issued with this Circular.

In order to suit the characteristics of production and business activities and management requirements, enterprises are allowed to design additional or amend and supplement accounting book forms compared to the guidance forms in Appendix III issued with this Circular. When designing additional or amending and supplementing accounting book forms of enterprises, they must ensure compliance with the provisions in Clauses 1, 2, 3, 4, Article 24 of the Law on Accounting and must fully, promptly, honestly, transparently, easily checked, controlled and compared with the assets and capital sources of the enterprise.

When designing additional or amending and supplementing accounting forms, enterprises are responsible for issuing accounting regulations (or equivalent documents) on the amended and supplemented contents to serve as a basis for implementation. The regulations must clearly state the necessity of such amendments and supplements and the enterprise’s responsibility before the law for the amended and supplemented contents.

In case the enterprise does not design or modify or supplement the accounting book form, it shall apply the accounting book form as instructed in Appendix III issued with this Circular.

Article 13. Opening, recording and closing accounting books

1. Opening the books: The accounting books must be opened at the beginning of the accounting year. For newly established enterprises, the accounting books must be opened from the date of establishment.
2. Bookkeeping: Enterprises must base on accounting documents to keep accounting books according to the provisions of the Law on Accounting and documents amending, supplementing or replacing them. Accounting books must be recorded promptly, clearly and completely according to the contents of the books. Information and data recorded in accounting books must be accurate and truthful in accordance with accounting documents.
3. Closing the books: Enterprises must close their accounting books at the end of the accounting period to prepare financial statements and in other cases as prescribed by law.

Chapter V

FINANCIAL REPORT 

Article 14. Purpose of Financial Statements

1. Financial statements are used to provide information on the financial situation, business results and cash flows of an enterprise, meeting the management requirements of business owners, competent authorities and the needs of users of financial statements in making economic decisions. Financial statements must provide information of an enterprise on:
2. a) Assets;
3. b) Liabilities;
4. c) Equity;
5. d) Revenue, other income, production and business costs and other expenses;
6. d) Profit, loss and division of business results;
7. e) Cash flows.
8. In addition to the information in Clause 1 of this Article, enterprises must also provide other information in the “Notes to Financial Statements” to further explain the indicators reflected in the Financial Statements and the accounting policies applied to record economic transactions arising, prepare and present the Financial Statements of the enterprise.

Article 15. Financial Statement preparation period

1. Period for preparing annual financial statements: Enterprises must prepare annual financial statements according to the provisions of the Accounting Law.
2. Period for preparing Interim Financial Reports: Interim Financial Reports include Quarterly Financial Reports (including the fourth quarter) and Semi-Annual Financial Reports (6-month Financial Reports).
3. Other Financial Statement preparation period
4. a) Enterprises prepare Financial Statements according to other accounting periods (for example, monthly Financial Statements,…) as required by law, by the parent company or by the owner.
5. b) Enterprises that are divided, consolidated, merged, converted into business types, dissolved, or bankrupt must prepare financial statements at the time of division, consolidation, merger, conversion into business types, dissolution, or bankruptcy in accordance with the provisions of law.

Article 16. Subjects and responsibilities for preparing Financial Statements

1. Subjects of financial reporting

Enterprises in all fields and economic sectors must prepare full annual financial statements in accordance with the provisions of Appendix IV issued with this Circular. Preparation of interim financial statements and financial statements for other accounting periods shall comply with relevant laws or the management requirements of the unit. In cases where, according to relevant laws, an enterprise is required to prepare interim financial statements but such laws do not have specific provisions on the type of interim financial statements, the enterprise may choose to prepare interim financial statements in full or summary form.

2. Enterprises with affiliated units must consolidate both the financial information of the head office and the affiliated units into the enterprise’s Financial Statements on the basis of excluding all internal transactions between the head office and the affiliated units or between the affiliated units with each other. In this case, the head office and the affiliated units of the enterprise are not required to
   prepare the Financial Statements of their units, unless otherwise required by law.
3. The preparation and presentation of the annual consolidated financial statements and the interim consolidated financial statements shall comply with the provisions of law on consolidated financial statements.
4. The preparation and signing of Financial Statements shall be carried out in accordance with the provisions of the Law on Accounting, documents guiding the Law on Accounting and documents amending, supplementing or replacing them. In case an enterprise hires an accounting service business unit to perform the service of preparing and presenting Financial Statements, or the service of acting as chief accountant, the section of the preparer and chief accountant on the Financial Statement of the enterprise must clearly state the number of the practitioner’s Accounting Service Practice License and the name of the accounting service provider as prescribed.

Article 17. Enterprise Financial Reporting System

1. The Financial Reporting System includes:

– Financial report;

– Business performance report;

– Cash flow statement;

– Notes to the Financial Statements;

2. Annual financial report:
3. a) Annual financial statements for enterprises meeting the going concern assumption, including:

– Financial status report – Business performance report – Cash flow statement – Notes to the Financial Statements

Form No. B 01 – DN Form No. B 02 – DN Form B 0 3 – DN Form No. B 09 – DN

1. b) Annual financial statements for enterprises that do not meet the going concern assumption, including:

– Financial status report – Business performance report – Cash flow statement – Notes to the Financial Statements

Form No. B 01 – DNKLT Form No. B 02 – DNKLT Form No. B 03 – DNKLT Form No. B 09 – DNKLT

3. Interim financial reports include:
4. a) Full interim financial report, including:

– Mid-year financial report – Mid-year business performance report – Interim cash flow statement – Notes to Selected Financial Statements

Form No. B 01a – DN Form No. B 02a – DN Form No. B 03a – DN Form No. B 09a – DN

1. b) Summary interim financial report, including:

– Mid-year financial report – Mid-year business performance report – Interim cash flow statement – Notes to Selected Financial Statements

Form No. B 01b – DN Form No. B 02b – DN Form No. B 03b – DN Form No. B 09a – DN

4. The form of the Annual Financial Report and Interim Financial Report (full and summary form) is guided in Appendix IV issued with this Circular. For indicators without figures, which are exempted from presentation in the Financial Report, the enterprise shall proactively renumber them in order according to the principle of continuity in each section, but shall not renumber the indicator “Code”.

Article 18. Amendment and supplementation of Financial Statements

1. Enterprises shall apply the Financial Reporting system in Appendix IV issued with this Circular to prepare and present the unit’s Financial Statements.

In order to be consistent with the characteristics of production and business activities and management requirements, enterprises may supplement the indicators of the Financial Report as guided in Appendix IV issued with this Circular. Such supplementation must ensure the provisions in Clauses 1 and 2, Article 29 of the Law on Accounting and comply with the principles of preparing and presenting Financial Reports as guided in this Circular. Enterprises must explain in the Financial Report the supplemented contents compared to the Financial Report form as guided in Appendix IV issued with this Circular.

When adding additional indicators to the Financial Report, the enterprise is responsible for issuing the Accounting Regulations (or equivalent documents) on such additional contents to serve as a basis for implementation. The Regulations must clearly state the necessity of such addition and the enterprise’s responsibility before the law for the added contents.

In case the enterprise does not add additional indicators to the Financial Report, the Financial Report form as instructed in Appendix IV issued with this Circular shall apply.

2. In case an enterprise has special characteristics that make it impossible to supplement or need to amend the indicators of the Financial Report as guided in Appendix IV issued with this Circular, it must report to the Ministry of Finance for guidance on preparing and presenting the Financial Report.

Article 19. Requirements for information presented in Financial Statements

1. The information presented in the Financial Statements must truthfully and reasonably reflect the financial situation, business results, cash flow and other financial information of the enterprise. The information in the Financial Statements must be complete, objective and error-free.

– Information is considered complete when the Financial Statements include all the information necessary to help users of the Financial Statements understand the nature, form and risks of transactions and events. For some items, the complete presentation must also describe additional information about the quality, factors and circumstances that may affect the quality and nature of the item.

– Objective information is information that is presented in a financial report without bias, must be neutral, true to reality, not distorted, not falsified, and must not change the level of influence of financial information in a direction that is beneficial or unfavorable to the users of the financial report.

– Error-free means that the Financial Statements do not contain any omissions, mistakes, or fraud in describing the phenomena, selecting, applying, and providing the reported information. Error-free does not mean being completely accurate in all aspects. The presentation of an estimate is considered error-free if the nature and limitations of the estimation process are clearly explained and described, and there are no errors in selecting appropriate figures during the estimation process.

2. Financial information must be relevant to help users of Financial Statements predict, analyze and make economic decisions.
3. Financial information must be presented in all material respects. Information is considered material if its omission or misstatement could significantly distort the financial statements and influence the economic decisions of users taken on the basis of the financial statements. Materiality depends on the size or nature or both of the omission or misstatement judged in the particular circumstances.
4. Information must be verifiable, timely and understandable.
5. Financial information must be presented consistently and comparable between accounting periods and between enterprises. When an enterprise changes the principles of preparing and presenting financial statements from meeting the going concern assumption to not meeting the going concern assumption or vice versa, the enterprise must present in the Notes to the Financial Statements the nature, figures and reasons for reclassifying comparative figures of the indicators and items of the Financial Statements to ensure comparability with the current period (unless this cannot be done).

Article 20. Principles for preparing and presenting financial statements of enterprises meeting the going concern assumption

1. The preparation and presentation of Financial Statements must comply with the provisions of Vietnamese Accounting Standard No. 21 – Presentation of Financial Statements and other relevant Vietnamese Accounting Standards. Important information must be explained to help readers understand the true financial situation of the enterprise.
2. Financial statements must reflect the economic substance of transactions and events rather than their legal form (substance over form).
3. Assets are not recorded at a value higher than their recoverable amount; Liabilities are not recorded at a value lower than their payment obligations.
4. Classification of assets and liabilities: Assets and liabilities on the Financial Statement must be presented as short-term and long-term, with indicators arranged in descending order of liquidity.
5. a) An asset is classified as short-term when it falls into one of the following cases:

(i) The enterprise expects to recover the asset or expects to sell or use the asset in a normal business cycle;

(ii) The enterprise holds such assets primarily for commercial purposes;

(iii) The enterprise expects to recover the assets within 12 months or less from the end of the accounting period;

(iv) Assets are cash or cash equivalents, unless the asset is prohibited from being exchanged or used to pay a liability that is due more than 12 months from the end of the accounting period.

Assets that are not classified as current under the above guidance are classified as long-term assets.

1. b) A liability is classified as short-term when it falls into one of the following cases:

(i) The enterprise expects to settle this liability within a normal business cycle;

(ii) The enterprise holds the liability primarily for business purposes;

(iii) Liabilities due for payment within 12 months or less from the end of the accounting period;

(iv) The enterprise has no right to refuse the obligation to pay the debt payable (loans, borrowings, financial leasing debts due, including cases where the debt payable will be paid by the enterprise by issuing capital instruments at the option of the partner) at any time within 12 months or less from the end of the accounting period.

Liabilities (such as payables to suppliers, employee expenses and other operating expenses) that are part of working capital used in the normal operating cycle of a business must be classified as current liabilities even if the business is obliged to pay these liabilities within a period of more than 12 months from the end of the accounting period.

Liabilities that are not classified as short-term according to the above guidance are classified as long-term liabilities.

For liabilities classified as short-term, if the following events occur between the balance sheet date and the date the financial statements are issued, these events are non-adjusting events:

– Agreement to extend short-term debt to long-term;

– Remedy breaches in the agreement for long-term liabilities; and

– The creditor shall allow a grace period to cure the breach of the agreement for long-term liabilities at least 12 months after the end of the accounting period.

At the same time, enterprises must explain in the Notes to the Financial Statements the events that arise later according to regulations.

1. c) In case an enterprise chooses to classify assets and liabilities when presenting the Financial Position Statement according to the normal business cycle, the enterprise must explain the value expected to be recovered or paid within a period of more than 12 months for each line of asset and liability indicators when these indicators include the value expected to be recovered or paid:

(i) 12 months or less from the end of the accounting period, and

(ii) more than 12 months from the end of the accounting period.

At the same time, the normal business cycle is applied to classify the assets and liabilities of the enterprise is the same. For enterprises whose normal business cycle cannot be clearly determined, the business cycle of that enterprise is still considered to be 12 months.

1. d) When preparing the Financial Statements, enterprises must reclassify long-term assets and liabilities in the previous period into short-term assets and liabilities in the current period if, from the end of the accounting period, such assets or liabilities satisfy the conditions of being short-term assets or short-term liabilities as prescribed in Point a and Point b of this Clause, except for cases that are not reclassified according to the instructions in this Circular.
2. Assets and liabilities must be presented separately. Enterprises may only offset assets and liabilities when assets and liabilities relate to the same entity, have a quick turnover, short maturity, and arise from transactions and events of the same type.
3. Revenue, income and expenses items directly related to the generation of such revenue and income must be presented in accordance with the principle of conformity and ensure the principle of prudence. The business performance report and the cash flow report reflect the revenue, income, expense and cash flow items of the reporting period. In case the Financial Statements of previous periods are found to have material errors, they must be adjusted retrospectively according to regulations.
4. In case an enterprise has affiliated units, the enterprise’s Financial Statement must summarize both the financial information of the head office and the affiliated units. The balance of internal items of the Financial Status Report, unrealized revenues, expenses, profits and losses arising from internal transactions must all be excluded.

Article 21. Principles for preparing and presenting Financial Statements when changing accounting periods

When changing the accounting period, for example, a business changes the accounting period from a calendar year to a different accounting period than a calendar year, the business must close the accounting books and prepare the Financial Statement according to the following principles:

1. Changing the accounting period must comply with the provisions of the Accounting Law. When changing the annual accounting period, the enterprise must prepare separate Financial Statements for the period between the two accounting periods of the old fiscal year and the new fiscal year.
2. For the Financial Position Statement: All balances of assets, liabilities and equity at the end of the accounting period before conversion are recorded as the opening balance of the new accounting period and presented in the “Beginning Balance” column.
3. For the Business Performance Report and Cash Flow Report for the accounting period from the end of the previous accounting period to the time of changing the accounting period: the figures from the end of the previous accounting period to the time of changing the accounting period are presented in the column “This period”. The column “Previous period” presents the corresponding figures in the previous accounting period or figures of 12 months on the Financial Statement of the previous fiscal year.
4. Enterprises must clearly explain:
5. a) Reasons for changing the year-end date;
6. b) The corresponding figures for comparison are presented in the Income Statement, Cash Flow Statement and related Notes to the Financial Statements. In case the “Previous Period” figures in the Income Statement and Cash Flow Statement of this period are from the 12 months of the previous fiscal year, the enterprise must explain the incomparability between the information of the reporting period and the information of the comparison period according to the provisions of Vietnamese Accounting Standard No. 21 – Presentation of Financial Statements.

Article 22. Principles for preparing and presenting Financial Statements when converting business types

When converting the type of business, the enterprise must close the accounting books and prepare the Financial Statement according to the provisions of law. In the first accounting period after converting the type of business, the enterprise must record the accounting books and present the Financial Statement according to the following principles:

1. For accounting books reflecting assets, liabilities and equity: All balances of assets, liabilities and equity in the accounting books of the old enterprise before conversion are recorded as the opening balance in the accounting books of the new enterprise.
2. For the Financial Position Statement: All assets, liabilities and equity inherited from the old enterprise before conversion are recorded as the opening balance of the new enterprise and presented in the “Beginning balance” column.
3. For the Business Performance Report and Cash Flow Statement: Data from the time of conversion to the end of the first reporting period is presented in the column “This period”. The column “Previous period” presents cumulative data from the beginning of the reporting year to the time of conversion of the business type and the enterprise must clearly explain the reasons when it is not possible to compare the information of the reporting period and the information of the comparison period according to the provisions of Vietnamese Accounting Standard No. 21 – Presentation of Financial Statements.

Article 23. Principles for preparing and presenting Financial Statements when dividing, separating, consolidating or merging enterprises

1. General principles
2. a) In case of business merger

a1) When merging enterprises, enterprises (merging enterprises and merged enterprises) must comply with the provisions of the law on enterprises and other relevant laws.

a2) The determination of the net asset value that the acquiring enterprise receives from the merged enterprise is carried out as follows:

(i) In case the business merger transaction satisfies the business activities as defined in Vietnamese Accounting Standard No. 11 – Business consolidation and the business merger is carried out between enterprises under common control, the acquiring enterprise shall record in its accounting books the assets and liabilities received from the merged enterprise at the book value on the separate financial statements of the merged enterprise at the time of merger.

(ii) In case the business merger transaction satisfies the business activities as defined in Vietnamese Accounting Standard No. 11 – Business Consolidation and the business merger is carried out between enterprises not under common control, the acquiring enterprise shall record the assets and liabilities received from the merged enterprise according to the purchase method as in Vietnamese Accounting Standard No. 11 – Business Consolidation.

(iii) In case the business merger transaction does not satisfy the business activities as defined in Vietnamese Accounting Standard No. 11 – Business combination, the acquiring enterprise shall record the assets and liabilities received from the merged enterprise as purchasing a group of assets or net assets.

a3) Determine the cost to carry out a business merger transaction

(i) In case the acquiring enterprise uses investments in subsidiaries, joint ventures, associates, other investments or pays additional money or uses non-monetary assets such as inventories, fixed assets, investment real estate, etc. or issues capital instruments to pay other investors when carrying out a business merger transaction, the determination of the value of investments, non-monetary assets or capital instruments issued by the acquiring enterprise is carried out as follows:

– In case the business merger transaction satisfies the business activities as defined in Vietnamese Accounting Standard No. 11 – Business Consolidation: The determination of the value of non-monetary assets exchanged, liabilities incurred and capital instruments issued to carry out the merger transaction is carried out as guided in Vietnamese Accounting Standard No. 11 – Business Consolidation.

– In case the business merger transaction does not satisfy the business activities as defined in Vietnamese Accounting Standard No. 11 – Business combination: The receiving enterprise uses the fair value of the assets and liabilities received at the exchange date as the priority value to determine the value paid for the non-monetary assets taken away or the capital instruments issued for the business merger transaction. In case the fair value of the assets and liabilities received at the exchange date cannot be determined or is not reliable, the basis for the fair value of the assets taken away to carry out the business merger transaction or the value that other evidence and calculation methods prove to be more reliable. The difference (if any) between the value of the issued shares and the par value of the shares is reflected in capital surplus. The difference (if any) between the fair value and the book value of inventories, fixed assets, investment properties, etc. is recorded in the business results of the period similar to the sale or exchange of these assets.

In case the price to be paid is determined jointly for many non-monetary assets to be exchanged, with the understanding of the parties at the transaction date, the acquiring enterprise determines the selling price for each asset to be exchanged in a systematic manner (such as allocation according to book value, fair value of the assets to be exchanged at the exchange date, etc.).

The parties must comply with the provisions of relevant laws in determining the value of non-monetary assets taken away to carry out the business merger transaction. The revaluation of the book value of non-monetary assets taken away to carry out the business merger transaction shall only be carried out when there is solid and reliable evidence proving that the market value of such non-monetary assets at the time of exchange is different from the accounting book value of such assets. The parties participating in the business merger transaction and related parties shall be responsible before the law for intentionally valuing or incorrectly determining the value of non-monetary assets taken away to carry out the business merger transaction.

(ii) The acquiring enterprise must stop recording assets that the unit must carry out or spend to carry out the merger transaction such as investments in subsidiaries, joint ventures, associates, other investments, issuance of capital instruments, cash, non-monetary assets or other benefits, etc. according to the book value of these assets on the separate financial statements of the acquiring enterprise. This book value is determined by the original price minus the provisions for asset losses or by the original price minus the accumulated depreciation value of fixed assets and investment real estate.

a4) Accounting principles for the difference between the cost of implementing a merger transaction (the value of assets or benefits that the acquiring enterprise must pay or reduce) compared with the value of net assets received from the merged enterprise in the case of a merger transaction that satisfies business operations as defined in Vietnamese Accounting Standard No. 11 – Business consolidation:

(i) In case a business merger transaction is carried out between parties under common control, the difference between the cost of implementing the merger transaction and the book value of net assets on the separate financial statements of the merged enterprise shall be fully accounted for in Account 4118 – Other capital and periodically transferred to Account 421 – Undistributed profit after tax on the accounting books of the receiving enterprise for a period of no more than 10 years, starting from the date of business merger by the straight-line method or other more reasonable methods.

(ii) In case a business merger transaction is carried out between parties not under common control, the difference between the cost to carry out the merger transaction and the fair value of the net assets identifiable on the separate financial statements of the merged enterprise shall be accounted for as commercial advantages or commercial disadvantages arising in the business merger transaction according to the guidance of Vietnamese Accounting Standard No. 11 – Business merger.

a5) In case of business mergers that involve internal transactions in the purchase and sale of goods, services, fixed assets, etc., after receiving the handover of the subsidiary’s net assets, the parent company must eliminate internal transactions before preparing and presenting the parent company’s separate financial statements for the accounting period in which the business merger is carried out.

a6) Determination of tax obligations related to internal transactions on purchase and sale of goods, services, fixed assets, etc. when merging enterprises is carried out in accordance with the provisions of tax law. Deferred corporate income tax related to temporary differences between the value of net assets and the tax base of net assets (which may arise due to unrealized profits/losses from internal transactions) is accounted for by the merging enterprise in accordance with Vietnamese Accounting Standard No. 17 – Corporate Income Tax.

a7) In cases of business mergers that do not fall under the above cases, enterprises shall base on the principles prescribed in the Vietnamese Accounting Standards system, the instructions in this Circular and the nature of the merger transaction to perform appropriate accounting.

1. b) In case of division, separation or merger of enterprises

b1) When dividing, separating or merging enterprises, enterprises (new enterprises and enterprises being divided, separated or merged) must comply with the provisions of the Enterprise Law and other relevant laws.

b2) The determination of the net asset value that the new enterprise receives from the divided, separated or merged enterprise is carried out as follows:

(i) In case of business merger:

– In case the business consolidation transaction satisfies the business activities as defined in Vietnamese Accounting Standard No. 11 – Business consolidation and the business consolidation is carried out between enterprises under common control, then the enterprise is allowed to record in its accounting books the assets and liabilities received from the merged enterprise according to the book value on the separate financial statements of the merged enterprise at the time of business consolidation.

– In case the business consolidation transaction satisfies the business activities as defined in Vietnamese Accounting Standard No. 11 – Business consolidation and the business consolidation is carried out between enterprises not under common control, the enterprise shall record the assets and liabilities received from the merged enterprise according to the purchase method as in Vietnamese Accounting Standard No. 11 – Business consolidation.

– In case the business consolidation transaction does not satisfy the business activities as defined in Vietnamese Accounting Standard No. 11 – Business consolidation, the enterprise shall record the assets and liabilities received from the merged enterprise as purchasing a group of assets or net assets.

(ii) In case of division or separation of an enterprise: The new enterprise shall record in its accounting books the value of net assets received from the divided or separated enterprise according to the book value on the separate financial statements of the divided or separated enterprise at the time of division or separation of the enterprise.

b3) In case a new enterprise issues capital instruments to carry out a division, separation or merger transaction, the new enterprise shall use the fair value of the assets and liabilities received on the exchange date as the priority value to be used first to determine the fair value of the capital instruments, except in the case of determining the value of the issued capital instruments when calculating the business consolidation cost, the enterprise shall follow the guidance in Vietnamese Accounting Standard No. 11 – Business consolidation. In case the fair value of the assets and liabilities received on the exchange date cannot be determined or is not reliable, the fair value of the capital instrument shall be the listed price on the stock market. In case the capital instrument does not have a listed price, the value that other evidence and calculation methods prove to be more reliable shall be used. The difference between the value of the issued shares and the par value of the shares shall be reflected in capital surplus.

b4) In cases of division, separation or merger of enterprises that do not fall under the above cases, enterprises shall base on the principles prescribed in the Vietnamese Accounting Standards system, the instructions in this Circular and the nature of the division, separation or merger of enterprises to perform appropriate accounting.

1. c) The division, separation, consolidation and merger of enterprises in state-owned enterprises, if regulated differently from the principles prescribed in this Article, shall be implemented in accordance with the provisions of law on state-owned enterprises.
2. The accounting records and preparation of financial statements of related enterprises when dividing, separating, consolidating or merging enterprises shall be carried out according to the following principles:
3. a) For accounting books reflecting assets, liabilities and equity:

a1) The value of assets, liabilities and equity received from the merged enterprise is recorded by the acquiring enterprise as an amount arising during the period in the accounting books. The opening balance of assets, liabilities and equity in the accounting books of the acquiring enterprise remains unchanged.

a2) The value of assets, liabilities and equity received from the merged enterprise is recorded by the new enterprise as an amount arising during the period in the accounting books. The opening balance line of assets, liabilities and equity in the accounting books of the new enterprise has no figures.

a3) The value of assets, liabilities and equity in the accounting books of the enterprise being divided and transferred to the new enterprise is recorded as an arising amount in the accounting books of the new enterprise. The opening balance line of assets, liabilities and equity in the accounting books of the new enterprise has no figures.

a4) The value of assets, liabilities and equity of the separated enterprise transferred to the new enterprise is recorded as an amount arising in the accounting books of the new enterprise. The opening balance line of assets, liabilities and equity in the accounting books of the new enterprise has no figures. The opening balance line of assets, liabilities and equity in the accounting books of the separated enterprise remains unchanged.

1. b) For the Financial Statement:

b1) The value of assets, liabilities and equity received from the merged enterprise will be summarized by the acquiring enterprise to present in the “End of year balance” column on the Financial Position Statement. The “Beginning of year balance” column of the acquiring enterprise remains unchanged.

b2) The value of assets, liabilities and equity received from the merged enterprise is summarized by the new enterprise to present in the “End of year balance” column on the Financial Position Statement. The “Beginning of year balance” column of the new enterprise has no data.

b3) The value of assets, liabilities and equity inherited from the divided or separated enterprise shall be summarized by the new enterprise to be presented in the “End of year number” column on the Financial Status Report. The “Beginning of year number” column of the new enterprise has no data. The “Beginning of year number” column of the separated enterprise remains unchanged.

1. c) For the Business Performance Report and Cash Flow Statement:

c1) The acquiring enterprise only records and presents the data of the merged enterprise in its Business Performance Report and Cash Flow Report from the time of merger to the end of the reporting period in the “This year” column. The “Previous year” column of the acquiring enterprise remains unchanged.

c2) The new enterprise only presents data from the time of division, separation, or merger of the enterprise to the end of the first reporting period in the “This year” column. The “Previous year” column of the new enterprise has no data. The separated enterprise no longer records and presents data of the separated enterprise from the time of separation to the end of the reporting period.

Article 24. Principles for preparing and presenting Financial Statements when an enterprise does not meet the going concern assumption

1. When preparing and presenting the Financial Statements, enterprises must consider signs that the entity does not meet the assumption of continuous operation. An enterprise is considered not a going concern if it is expected to be dissolved or bankrupt or to stop production and business or significantly reduce the scale of operations as prescribed within a period of 12 months or less from the end of the accounting period. Enterprises must explain the business’s continuing operation situation when there are material uncertainties that may cause significant doubts about the ability to continue operating.
2. In the following cases, an enterprise is still considered to be a going concern and therefore does not have to prepare and present financial statements on the basis of not meeting the going concern assumption:

– Conversion of enterprise types, including equitization of a State-owned enterprise into a joint stock company;

– Enterprise division, separation, merger or consolidation;

– Converting an enterprise (subsidiary) into a affiliated unit (branch) or vice versa.

3. When not meeting the going concern assumption, the enterprise must still prepare the following complete Financial Statements:

– Financial statement applicable to enterprises that do not meet the going concern assumption	Form B 01 – DNKLT and presented in a separate form
– Income statement applicable to enterprises that do not meet the going concern assumption	Form B 02 – DNKLT and is presented in a similar general form to the enterprise meeting the going concern assumption.
– Cash flow statement applicable to enterprises that do not meet the going concern assumption	Form B 03 – DNKLT and presented in the same general form as the enterprise meeting the going concern assumption
– Notes to the Financial Statements applicable to enterprises that do not meet the going concern assumption	Form B 09 – DNKLT and presented in a separate form

4. In case the assumption of continuous operation is no longer appropriate at the end of the accounting period, the enterprise must reclassify long-term assets and long-term liabilities into short-term assets and short-term liabilities and the enterprise must re-evaluate all assets and liabilities, except in cases where a third party inherits the rights to assets or obligations to liabilities at book value. The enterprise must record in the accounting books at the re-evaluated price before preparing the Financial Position Statement.
5. Enterprises do not have to revalue assets and liabilities if a third party inherits rights to assets or obligations to liabilities in the following specific cases:
6. a) Each specific asset item is committed and guaranteed by another party to be recovered for the dissolved or bankrupt unit at book value and the recovery takes place before the unit officially ceases operations;
7. b) Each specific liability item is committed and guaranteed by a third party for payment to the dissolved or bankrupt unit, and the dissolved or bankrupt unit is only obligated to pay back to that third party at book value.
8. Revaluation is performed for each type of asset and liability at the end of the accounting period according to the following principles:
9. a) For assets:

– Inventories, biological assets, long-term work in progress, equipment, supplies, and long-term spare parts are valued and recorded at the lower of cost and net realizable value;

– Tangible fixed assets, intangible fixed assets, investment real estate, and construction in progress are evaluated and recorded at the lower of the residual value and the recoverable value (liquidation price minus estimated liquidation costs). For financial leased fixed assets, if there is a mandatory repurchase clause, they are re-evaluated and recorded similarly to the enterprise’s fixed assets. If they are returned to the lessor, they are re-evaluated and recorded according to the financial lease debt still payable to the lessor;

– Trading securities are valued and recorded at fair value;

– Held-to-maturity investments, receivables, investments in subsidiaries, joint ventures, associates and other entities are valued and recorded at the lower of book value and recoverable value (sale price less estimated costs to sell).

1. b) For payables: In case there is a written agreement between the parties on the payable amount, the revaluation shall be based on the agreed amount. In case there is no specific agreement, the following shall be done:

– Cash payables are revalued and recorded at the higher value between the book value of the payable and the value of the debt paid before maturity according to the provisions of the contract;

– Liabilities in the form of financial assets are revalued and recorded at the higher price between the carrying amount of the liability and the fair value of that financial asset;

– Liabilities in the form of inventories are revalued and recorded at the higher of the carrying amount of the liability and the purchase price (plus directly attributable costs) or cost of production of the inventories;

– Liabilities in the form of fixed assets are revalued and recorded at the higher of the carrying amount of the liability and the purchase price (plus directly attributable costs) or the carrying amount of the fixed asset.

1. c) Foreign currency items are revalued at the average transfer exchange rate of the commercial bank where the enterprise regularly conducts transactions at the end of the accounting period as usual. As for the balance of non-term deposits in foreign currency, the enterprise must revalue at the average transfer exchange rate of the commercial bank where the enterprise opens a non-term deposit account.
2. Accounting method for some asset items when the enterprise does not meet the going concern assumption:
3. a) The provision or assessment of asset losses is recorded directly in the book value of the asset, without making provision in Account 229 – Asset Loss Provision;
4. b) The depreciation or loss recognition of fixed assets and investment real estate is recorded directly in the book value of the assets, without using Account 214 – Depreciation of fixed assets to reflect accumulated depreciation.
5. When the going concern assumption is no longer appropriate, a business must address the following financial issues:

– Make provision in advance for expenses to determine business results for losses expected to arise in the future if the possibility of loss arising is relatively certain and the value of the loss can be reliably estimated; Record current obligations for payables even in cases where there are not yet complete documents (such as minutes of acceptance of contractor’s volume,…) but payment is certain;

– The difference in revaluation of accumulated assets belonging to the equity portion is transferred to other income (if profit) or other expenses (if loss);

– For the exchange rate difference that is cumulatively reflected on the Financial Statement, the enterprise transfers the entire amount to financial revenue (if profit) or financial expenses (if loss);

– Unallocated pending expenses are fully recorded as a reduction to be included in related production and business expenses in the period depending on each specific transaction, similar to the recording of continuously operating enterprises in the period;

– The parent company stops recording commercial advantages on the Consolidated Financial Statements, the unallocated commercial advantages are immediately included in the business management expenses;

– The difference between profits and losses when revaluing assets and liabilities after offsetting against the provision made is recorded in financial revenue, other income or financial expenses, other expenses depending on each specific item, similar to the recording of a continuously operating enterprise.

9. When preparing the Financial Statements, in case the assumption of continuous operation is no longer appropriate, the enterprise must explain in detail the ability to generate cash and pay debts and equity to shareholders and must reclassify the comparative figures on the Financial Statements of the first period in which the enterprise does not meet the assumption of continuous operation (unless this cannot be done) to ensure comparability with the reporting period as well as must present the nature, figures and reasons for the reclassification. If it is not possible to reclassify the corresponding comparative figures, the enterprise must clearly explain and explain the reasons for the incomparability between the information of the reporting period and the information of the comparative period, specifically as follows:

– Amount recoverable from liquidation, sale of assets, collection of receivables;

– Ability to pay debts in order of priority, such as ability to pay debts to the State Budget, pay debts to employees, pay loans, debt to suppliers,…;

– Ability to pay owners, for joint stock companies it is necessary to clearly state how much money each share will receive;

– Time to pay off liabilities and equity;

– Reason for not being able to compare information between the reporting period and the comparison period: Because in the previous period, the enterprise prepared the Financial Statements according to the principle of meeting the assumption of continuous operation, but for the reporting period, the enterprise is expected to be dissolved or bankrupt or stop production and business or significantly reduce the scale of operations, so the Financial Statements are presented according to the principle of not meeting the assumption of continuous operation.

Article 25. Deadline for submitting Financial Reports

Enterprises must submit annual financial reports to competent authorities no later than 90 days from the end of the annual accounting period.

Enterprises that are parent companies or corporations shall stipulate the deadline for submitting Financial Reports of subsidiaries and affiliated units to consolidate or summarize Financial Reports in accordance with current legal regulations and the management requirements of the unit.

For enterprises whose relevant laws have provisions on submitting Financial Reports according to other accounting periods (Quarterly, semi-annual Financial Reports…), the deadline for submitting these Financial Reports shall comply with the provisions of such relevant laws.

Article 26. Place of receipt of Financial Reports

1. The submission of the enterprise’s Financial Report to the competent authority must be carried out in accordance with the provisions of relevant laws.
2. For enterprises that are required by law to have their Financial Statements audited, when submitting their Financial Statements to competent authorities, they must attach an audit report as prescribed.
3. In case the Financial Report of an enterprise is kept in the National Information System on Business Registration, the agencies receiving the Financial Report of the enterprise are required to provide information on the Financial Report of the enterprise according to the provisions of law.

Article 27. Disclosure of Financial Statements

1. Financial Statement Disclosure is the act of an enterprise announcing information about its Financial Statements in one or several forms of disclosure prescribed in Clause 3 of this Article so that users such as owners, creditors, suppliers, investors, etc. can obtain information on the enterprise’s Financial Statements.
2. Publicly disclosed objects

The subjects of public disclosure of Financial Statements are the subjects that receive information published on the Financial Statements of enterprises according to the provisions of the Law on Enterprises and other relevant laws.

3. Public form

– Publication: is the form of the enterprise’s Financial Report printed in books to provide information to the subjects receiving the published information according to the provisions of the Enterprise Law and other relevant laws. The enterprise must store this publication as an accounting document of the enterprise.

– Written notice: is a form in which an enterprise sends a written notice with the enterprise’s Financial Report attached to it to the subjects receiving information on the publication of the enterprise’s Financial Report according to the provisions of the Enterprise Law and other relevant laws.

– Listing: is a form of financial statements of an enterprise that are publicly posted at the enterprise’s headquarters to provide information to the subjects that receive information about the enterprise’s financial statements according to the provisions of the Enterprise Law and other relevant laws.

– Posting on the website: is the form of the enterprise’s Financial Report posted on the enterprise’s website, which clearly states the link to the enterprise’s Financial Report.

– Other forms as prescribed by relevant laws.

4. The content and deadline for public disclosure of Financial Reports shall comply with the provisions of the Law on Accounting and its amendments, supplements and replacements.
5. For enterprises that are required by law to have their Financial Statements audited, when publicizing their Financial Statements, they must attach an audit report as prescribed.

Chapter VI

IMPLEMENTING ORGANIZATION 

Article 28. Regulations on the use of accounting software

1. Enterprises may use accounting software to perform accounting work according to the provisions of this Circular. The accounting software that enterprises choose to use must ensure at least the following professional and technical requirements on accounting:
2. a) The accounting processes and operations established on the software must ensure compliance with the provisions of accounting law, tax law and other relevant laws, and must not change the nature, principles, accounting methods and information and data presented in accounting books and financial statements as prescribed.
3. b) The processing of accounting procedures, information and related data must ensure accuracy, consistency and no duplication. When making corrections, traces of the recorded accounting contents must be kept in chronological order.
4. c) Information and data on accounting software must ensure confidentiality, security and must comply with legal regulations on information security and safety. The information system must be set up to be able to warn or prevent intentional interference that changes information and data recorded in accounting books.
5. d) Provide complete and timely information and output data as required by competent authorities and data and information users.
6. d) Able to connect or ready to connect with relevant software when performing accounting work (electronic invoice software, digital signature,…).
7. e) Capable of upgrading, amending and supplementing in accordance with changes in accounting, tax and other relevant laws.
8. Business managers, chief accountants/accounting managers and relevant persons must be responsible for the accuracy and truthfulness of accounting information and data provided from accounting software.

Article 29. Conversion of balances in accounting books

1. Enterprises shall convert the balances of the following accounts:

– Enterprises base on the balance of detailed accounts 111, 112, 113, 121, 153, 154, 156, 211, 212, 213 to transfer details to suit the management requirements of the enterprise (if any).

– Enterprises that are capital contributors but are not accounting parties for business cooperation contracts, if by the time this Circular takes effect the business cooperation contract has not ended, shall base on the detailed balance of Account 138 – Other receivables (details of capital value contributed to non-jointly controlled business cooperation contracts) to convert the balance to Account 2281 – Capital contribution to other units in accordance with the nature and status of the enterprise in the business cooperation contract according to the instructions in this Circular.

– The enterprise bases on the detail number of Account 2413 – Major repairs of fixed assets to transfer the cost of upgrading and renovating unfinished fixed assets to Account 2414 – Upgrading and renovating fixed assets.

– Enterprises base on the detailed Credit balance of Account 338 – Other payables and payables on the amount payable for dividends and profits to transfer to Account 332 – Dividends and profits payable.

– The enterprise bases on the balance of Account 441 – Capital for basic construction investment and the balance of Account 466 – Funds for forming fixed assets to transfer to Account 4118 – Other capital.

2. Other contents currently reflected in detail on related accounts, if different from this Circular, must be adjusted according to the provisions of this Circular.

Article 30. Transitional provisions

1. Enterprises apply the following principles when there is a change in accounting policy:
2. a) In case an enterprise has to change its accounting policy due to the first application of legal provisions or Vietnamese Accounting Standards, accounting regimes that have specific conversion instructions (applying retroactive, simple retroactive or non-retroactive adjustment methods), it must follow those instructions. In which:

– Retroactive or non-retroactive adjustment method is implemented according to the provisions of Vietnamese Accounting Standard No. 29 – Changes in accounting policies, accounting estimates and errors.

– The simple retrospective adjustment method is a method that does not restate comparative figures from the first affected period but calculates the cumulative impact at the first day of the accounting period in which the new accounting policy is first applied and adjusts the corresponding asset and liability items to undistributed earnings after tax or other items in equity at the first day of the accounting period in which the new accounting policy is applied.

1. b) In case an enterprise has to change its accounting policy due to the first application of legal provisions or Vietnamese Accounting Standards, an accounting regime that does not require retroactive or simple retroactive adjustment, the method of non-retroactive adjustment of that accounting policy may be applied.
2. c) In case an enterprise voluntarily changes its accounting policy, it must apply the change in accounting policy retrospectively.
3. Enterprises that are investors in bonds that incur bond discounts or premiums, if by the time this Circular takes effect the bonds have not reached the payment deadline, the enterprises may choose to apply the retroactive adjustment method or simple retroactive adjustment according to the guidance in Clause 1 of this Article to account for the discounts and premiums arising when purchasing bonds for the first period’s Financial Statements applying this Circular.
4. In case an enterprise has an exchange rate difference arising when converting the accounting currency unit of Vietnamese Dong to another accounting currency unit and vice versa, which has been reflected in the Credit balance or Debit balance of Account 412 – Difference in revaluation of assets and presented on the Balance Sheet, the Credit balance or Debit balance of Account 412 – Difference in revaluation of assets must be transferred to Account 421 – Undistributed profit after tax (Account 4211) and must clearly present the reasons and impacts on the Financial Statements in the Notes to the Financial Statements.
5. In case an enterprise is making provision for major repair costs of fixed assets, but when this Circular takes effect, the major repair of fixed assets has not been carried out, the enterprise shall not continue to make provision for major repair costs of fixed assets. When major repair of fixed assets is carried out, the enterprise shall transfer the actual major repair costs of fixed assets to the amount made in advance, the difference between the amount of major repair costs made in advance and the amount actually incurred shall be gradually allocated to production and business expenses of each period.

Article 31. Implementation provisions

1. This Circular takes effect from January 1, 2026 and applies to fiscal years starting on or after January 1, 2026. 2014/TT-BTC dated December 22, 2014 of the Ministry of Finance guiding the enterprise accounting regime (except for the case specified in Clause 2 of this Article), Circular No. 75/2015/TT-BTC dated May 18, 2015 of the Ministry of Finance on amending and supplementing Article 128 of Circular No. 200/2014/ TT-BTC dated December 22, 2014 of the Ministry of Finance, Circular No. 53/2016/TT-BTC dated March 21, 2016 on amending and supplementing a number of Articles of Circular No. 200/2014/TT-BTC dated December 22, 2014 of the Ministry of Finance and Circular No. 195/2012/TT-BTC dated November 15, 2012 guiding accounting applicable to investor units.
2. The contents related to accounting for equitization of State-owned enterprises are guided in Clauses 3.11 and 3.12, Article 21; Clause 3.3, Article 35; Points h and i, Clause 3, Article 38 ; Point c, Clause 5, Article 40; Point c, Clause 3.1, Point d, Clause 3.2, Point e, Clause 3.3, Point d, Clause 3.4, Article 45 ; Points k, l, m, Clause 3, Article 47; Point l, Clause 3, Article 54; Clause 3.2, Clause 3.9, Article 57 ; Point d, Clause 3, Article 62; Point p, Clause 3, Article 63; Clause 3.13, Article 67 ; Article 71; Point g, Clause 3, Article 74; Point d, Clause 3, Article 77; Clause 3.15, Clause 3.16, Article 92 ; Point m, Clause 3, Article 93; Point d, Clause 3, Article 94 of Circular No. 200/2014/TT-BTC dated December 22, 2014 of the Ministry of Finance guiding the enterprise accounting regime will continue to be implemented until there is a replacement document.

Small and medium-sized enterprises, non-public establishments, and other accounting units are allowed to apply this Circular to account for the characteristics of their production and business activities and their management requirements. When applying this Circular, units must implement it consistently for at least one accounting year. When an enterprise changes its applied accounting regime, it must re-present data and comparative information similar to when changing its accounting policy and explain the reasons and impacts of such changes in the explanatory notes to the Financial Statements as prescribed.

4. Ministries, branches, People’s Committees, Departments of Finance and Tax of provinces and centrally run cities are responsible for guiding enterprises to implement this Circular. In the process of implementation, if there are any problems, please report them to the Ministry of Finance for research and resolution./.

 

Recipients: – Central Party Secretariat; – Prime Minister and Deputy Prime Ministers; – Central Office and Party Committees; – Office of the General Secretary; – Office of the National Assembly; – Council of Nationalities and Committees of the National Assembly; – Office of the President ; – Supreme People’s Procuracy; – Supreme People’s Court; – State Audit ; – Central Committee of the Vietnam Fatherland Front; – Vietnam Confederation of Commerce and Industry; – Ministries, ministerial-level agencies, agencies under the Government; – People’s Councils, People’s Committees of provinces and centrally run cities ; – Departments of Finance of provinces and centrally run cities; – Taxes of provinces and centrally run cities; – Department of Document Inspection and Management of Handling of Administrative Violations (Ministry of Justice); – Vietnam Association of Accountants and Auditors; – Vietnam Association of Certified Public Accountants; – Official Gazette; Electronic information portals: Government, Ministry of Finance; – Units under and directly under the Ministry of Finance; – Save: VT, QLKT (copy).

KT. MINISTER DEPUTY MINISTER Nguyen Duc Tam

 

APPENDIX II

ENTERPRISE ACCOUNTING SYSTEM
(Attached to Circular No. 99/2025/TT-BTC dated October 27, 2025 of the Minister of Finance)

A – LIST OF ACCOUNTING ACCOUNTS

TT number	TT ACCOUNT NUMBER		ACCOUNT NAME
	Level 1	Level 2
1	2	3	4
			ASSET ACCOUNT TYPE
01	111		Cash
02	112		Non-term deposits
03	113		Money in transit
04	121		Trading securities
05	128		Held-to-maturity investments
		1281	Term deposits
		1282	Bonds
		1283	Loan
		1288	Other investments held to maturity
06	131		Accounts receivable from customers
07	133		Deductible VAT
		1331	Deductible VAT of goods and services
		1332	Deductible VAT of fixed assets
08	136		Internal receivables
		1361	Working capital in affiliated units
		1362	Internal receivables on exchange rate differences
		1363	Internal receivables on borrowing costs eligible for capitalization
		1368	Other internal receivables
09	138		Other receivables
		1381	Assets missing pending resolution
		1383	Special consumption tax on imported goods
		1388	Other receivables
10	141		Advance
11	151		Goods in transit
12	152		Raw materials
13	153		Tools, instruments
14	154		Cost of production and unfinished business
15	155		Product
16	156		Goods
17	157		Goods sent for sale
18	158		Raw materials and supplies at bonded warehouses
19	171		Government bond repurchase and resale transactions
20	211		Tangible fixed assets
21	212		Financial leased fixed assets
22	213		Intangible fixed assets
23	214		Depreciation of fixed assets
		2141	Depreciation of tangible fixed assets
		2142	Depreciation of leased fixed assets
		2143	Depreciation of intangible assets
		2147	Real estate depreciation
24	215		Biological assets
		2151	Livestock for periodic production
		21511	Livestock for periodic production that have not yet reached maturity
		21512	Livestock for production periodically reach maturity
		215121	Original price
		215122	Accumulated depreciation value
		2152	Livestock that takes products once
		2153	Seasonal or one-time crop
25	217		Investment real estate
26	221		Investment in subsidiaries
27	222		Investment in joint ventures and associates
28	228		Other investments
		2281	Investing in other entities
		2288	Other investments
29	229		Provision for property losses
		2291	Provision for impairment of trading securities
		2292	Provision for loss on investments in other entities
		2293	Provision for doubtful debts
		2294	Provision for inventory write-downs
		2295	Provision for loss of biological assets
30	241		Construction in progress
		2411	Purchase of fixed assets
		2412	Basic construction
		2413	Repair and periodic maintenance of fixed assets
		2414	Upgrading and renovating fixed assets
31	242		Costs awaiting allocation
32	243		Deferred income tax assets
33	244		Deposit, bet
			TYPE OF LIABILITY ACCOUNT
34	331		Payable to seller
35	332		Must pay dividends, profits
36	333		Taxes and other payments to the State
		3331	Value added tax payable
		33311	Output VAT
		33312	VAT on imported goods
		3332	Special consumption tax
		3333	Import and export taxes
		3334	Corporate income tax
		3335	Personal income tax
		3336	Resource tax
		3337	Real estate tax, land rent
		3338	Environmental protection tax and other taxes
		33381	Environmental protection tax
		33382	Other taxes
		3339	Fees, charges and other amounts payable
37	334		Must pay workers
38	335		Costs payable
39	336		Internal payables
		3361	Internal payable on working capital
		3362	Internal payable on exchange rate difference
		3363	Internal payables on borrowing costs eligible for capitalization
		3368	Other internal payables
40	337		Payment according to construction contract progress
41	338		Other payables
		3381	Surplus assets awaiting resolution
		3382	Union fees
		3383	Social insurance
		3384	Health insurance
		3386	Unemployment insurance
		3387	Revenue awaiting allocation
		3388	Other payables
42	341		Loans and financial leases
		3411	Loans
		3412	Financial leasing debt
43	343		Bonds issued
		3431	Regular bonds
		3432	Convertible bonds
44	344		Receive deposits and bets
45	347		Deferred income tax payable
46	352		Provisions for payables
		3521	Product and goods warranty reserve
		3522	Construction warranty reserve
		3523	Provision for business restructuring
		3525	Other payables
47	353		Bonus and welfare fund
		3531	Reward fund
		3532	Welfare fund
		3533	Welfare fund has formed fixed assets
		3534	Company executive management bonus fund
48	356		Science and Technology Development Fund
		3561	Science and Technology Development Fund
		3562	The Science and Technology Development Fund has formed assets.
49	357		Price stabilization fund
			TYPE OF OWNER’S EQUITY ACCOUNT
50	411		Owner’s equity
		4111	Owner’s equity
		41111	Common shares with voting rights
		41112	Preferred stock
		4112	Capital surplus
		4113	Bond conversion option
		4118	Other capital
51	412		Asset revaluation difference
52	413		Exchange rate difference
53	414		Development investment fund
54	418		Other equity funds
55	419		Buyback of own shares
56	421		Undistributed profit after tax
		4211	Accumulated undistributed profit after tax up to the end of the previous year
		4212	Undistributed profit after tax this year
			REVENUE ACCOUNT TYPE
57	511		Sales and service revenue
58	515		Financial operating revenue
59	521		Revenue deductions
			PRODUCTION AND BUSINESS COST ACCOUNT TYPE
60	621		Direct material costs
61	622		Direct labor costs
62	623		Cost of using construction machinery
		6231	Labor costs
		6232	Material costs
		6233	Cost of production tools
		6234	Depreciation costs of construction machinery
		6237	Outsourcing service costs
		6238	Other cash expenses
63	627		General manufacturing costs
		6271	Factory staff costs
		6272	Material costs
		6273	Cost of production tools
		6274	Fixed asset depreciation costs
		6275	Taxes, fees, charges
		6277	Outsourcing service costs
		6278	Other cash expenses
64	632		Cost of goods sold
65	635		Financial costs
66	641		Cost of sales
		6411	Employee costs
		6412	Cost of materials and packaging
		6413	Cost of tools and supplies
		6414	Fixed asset depreciation costs
		6415	Taxes, fees, charges
		6417	Outsourcing service costs
		6418	Other cash expenses
67	642		Business management costs
		6421	Management staff costs
		6422	Material cost management
		6423	Office supplies costs
		6424	Fixed asset depreciation costs
		6425	Taxes, fees and charges
		6426	Contingency costs
		6427	Outsourcing service costs
		6428	Other cash expenses
			OTHER INCOME ACCOUNT TYPES
68	711		Other income
			OTHER EXPENSE ACCOUNT TYPES
69	811		Other expenses
70	821		Corporate income tax expense
		8211	Current corporate income tax expense
		82111	Current corporate income tax expenses according to the provisions of the Law on Corporate Income Tax
		82112	Additional corporate income tax expense under the global minimum tax rules
		8212	Deferred corporate income tax expense
			ACCOUNT DETERMINING BUSINESS RESULTS
71	911		Determine business results

 

B – CONTENT AND METHODS OF ACCOUNTING PRINCIPLES
OF CASH ACCOUNTING

1. The enterprise’s money includes cash; demand deposits at banks and other organizations where the enterprise is allowed to deposit money without a term, payment according to the provisions of law; money in transit. These amounts may include Vietnamese currency, foreign currency, monetary gold, etc. In which, monetary gold reflected in the cash account is gold used for the function of storing value, not including gold classified as inventory used for the purpose of raw materials to produce products or goods for sale. The management and use of monetary gold must comply with the provisions of current law.
2. Enterprises must open detailed accounting books to continuously record daily in chronological order the occurrence of revenues, expenditures, imports and exports of money to calculate the remaining fund balance and each account at banks and other organizations where the enterprise is allowed to deposit money without term, and make payments according to the provisions of law at all times to facilitate inspection and reconciliation according to management requirements.
3. Amounts deposited or wagered by other enterprises and individuals at the enterprise are managed and accounted for as the enterprise’s money.
4. Principles of accounting for foreign currency:
5. a) Enterprises must track money in detail in the original currency. When foreign currency transactions arise, enterprises must convert them into accounting currency units according to the following principles:

– Debit side of cash accounts applies actual transaction exchange rate;

– The Credit side of cash accounts applies the actual transaction exchange rate or the book exchange rate.

1. b) At the end of the accounting period, the enterprise must re-evaluate the balance of foreign currency items at the average transfer exchange rate of the commercial bank where the enterprise regularly conducts transactions. As for the balance of non-term deposits in foreign currency, the enterprise must re-evaluate at the average transfer exchange rate of the commercial bank where the enterprise opens a non-term deposit account.
2. c) Enterprises must clearly explain the choice of applying exchange rates in the notes to the Financial Statements and the choice of applying exchange rates must ensure consistency according to the provisions of Vietnamese accounting standards.
3. d) The determination and application of actual transaction exchange rates, recording exchange rates for arising transactions and revaluation rates for foreign currency-based monetary items are guided in Account 413 – Exchange rate differences.
4. At the end of the accounting period, the enterprise must revalue monetary gold according to the domestic market purchase price. The domestic market purchase price is the purchase price announced by the State Bank. In case the State Bank does not announce the gold purchase price, it shall be calculated according to the purchase price announced by the units licensed to trade in gold according to the law and the enterprise shall clearly explain in the Financial Statement Notes which unit the enterprise refers to the gold purchase price announced by.

 

ACCOUNT 111 – CASH

1. Accounting principles
2. a) This account is used to reflect the revenue, expenditure, and cash balance of the enterprise, including: Vietnamese currency, foreign currency, and monetary gold…
3. b) When importing or disbursing cash, there must be a receipt, payment voucher and the signature or confirmation of the recipient, the deliverer, and the person authorized to import or disburse funds according to the provisions of the accounting voucher regime, the internal control and management regulations of the enterprise. In some special cases, there must be an attached order for importing or disbursing funds.
4. c) The cash fund accountant must be responsible for opening the cash fund accounting book, continuously recording daily in order of receipts, expenditures, cash and foreign currency receipts and payments, and calculating the fund balance at all times.
5. d) The cashier is responsible for managing and receiving and disbursing cash funds, regularly checking the actual cash balance and comparing the figures in the cash book with the cash accounting book according to the management requirements and internal control procedures of the enterprise. If there is a difference, the accountant and the cashier must re-examine to determine the cause and propose timely measures to handle the difference.
6. d) When conducting economic transactions arising in cash, enterprises must comply with relevant legal provisions (for example, capital contribution transactions and purchase and sale, transfer of capital contributions to other enterprises, etc.).
7. Structure and content of Account 111 – Cash

Debit:

– Cash receipts;

– Excess cash in the fund discovered during inventory;

– Exchange rate difference due to revaluation of cash balance in foreign currency at the end of the accounting period (in case the foreign currency exchange rate increases compared to the accounting currency);

– The difference in revaluation of monetary gold in the fund increased at the end of the accounting period.

Creditor:

– Cash withdrawals;

– Cash shortage detected during inventory;

– Exchange rate difference due to revaluation of cash balance in foreign currency at the end of the accounting period (in case the foreign currency exchange rate decreases compared to the accounting currency);

– Difference in revaluation of monetary gold in the fund decreased at the end of the accounting period.

Debit Balance:

Amounts of Vietnamese currency, foreign currency, and monetary gold remaining in cash fund at the end of the accounting period.

Enterprises can open additional detailed accounts of Account 111 – Cash to track different types of cash (such as Vietnamese currency, foreign currency, monetary gold…) to suit the characteristics of production and business activities and management requirements of their unit.

3. Accounting methods for some major economic transactions

3.1. When selling products, goods, or providing services for immediate cash collection, the enterprise records revenue and records:

1. a) In case the products, goods, services,… that the enterprise sells are subject to VAT, special consumption tax, export tax,… (indirect taxes), the enterprise reflects the sales revenue and service provision at the selling price excluding tax, the indirect taxes payable are separated by type immediately upon recording the revenue, recording:

Debit account 111 – Cash (total payment amount)

Credit account 511 – Sales revenue and service provision (price excluding tax)

Credit account 333 – Taxes and amounts payable to the State.

1. b) In case the taxes payable are not separated for each type of tax at the time of transaction, the enterprise records revenue including taxes payable. Periodically, the enterprise determines the tax liability and reduces revenue, recording:

Debit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and amounts payable to the State.

3.2. When receiving payment from the State for subsidies and cash subsidies, record:

Debit account 111 – Cash

Credit account 333 – Taxes and amounts payable to the State (3339).

3.3. Amounts arising from financial activity revenue and other cash income, record:

Debit account 111 – Cash (total payment amount)

Credit account 515 – Financial activity revenue (price excluding VAT)

Credit account 711 – Other income (price excluding VAT)

Credit account 3331 – VAT payable (33311) (if any).

3.4. Withdraw non-term deposits from banks,… to cash fund, record:

Debit account 111 – Cash

Credit account 112 – Demand deposits.

3.5. Collecting receivables, loans, advances, deposits, and bets in cash; Receiving deposits and bets from other businesses in cash, record:

Debit account 111 – Cash

There are accounts 128, 131, 136, 138, 141, 244, 344,…

3.6. When selling short-term and long-term investments for cash, the enterprise records the difference between the amount received and the original cost of the investment in financial revenue or financial expenses, recording:

Debit account 111 – Cash

Debit account 229 – Provision for asset losses (if any)

Debit account 635 – Financial expenses (if loss)

There are accounts 121, 221, 222, 228 (cost price)

Credit account 515 – Financial activity revenue (if profit).

The reversal of provisions made for investments may be recorded immediately for each transaction at the time of sale of the investment or when determining the amount of provisions made for investments at the end of each accounting period but must be consistent with the provisions of Vietnamese accounting standards.

3.7. When receiving capital contributions from owners in cash, record:

Debit account 111 – Cash

Debit account 4112 – Capital surplus (difference between actual received capital contribution value less than par value of shares for joint stock companies or charter capital contribution value for other types of enterprises) (if any)

Credit account 4111 – Owner’s equity

Credit account 4112 – Capital surplus (difference between actual received capital contribution value greater than par value of shares for joint stock companies or charter capital contribution value for other types of enterprises) (if any).

3.8. Cash withdrawal to deposit into non-term account at bank or deposit, bet, record:

Debit account 112 – Demand deposits

Debit account 244 – Deposit, bet

Credit account 111 – Cash.

3.9. Cash withdrawal to purchase trading securities, make term deposits, purchase bonds, lend or invest in subsidiaries, invest in joint ventures, associates…, record:

Debit accounts 121, 128, 221, 222, 228,…

Credit account 111 – Cash.

3.10. Cash disbursement to purchase inventory, purchase fixed assets, spend on construction investment activities,…, record:

Debit accounts 151, 152, 153, 156, 211, 213, 241,…

Debit account 133 – Deductible VAT (1331) (if any)

Credit account 111 – Cash.

3.11. When purchasing raw materials paid in cash for immediate use in production and business, record:

Debit accounts 621, 623, 627, 641, 642,…

Debit account 133 – Deductible VAT (1331) (if any)

Credit account 111 – Cash.

3.12. Cash disbursement to pay payables, loans and financial lease debts,…, record:

Debit accounts 331, 333, 334, 335, 336, 338, 341,…

Credit account 111 – Cash.

3.13. Cash disbursement for financial and other activities, record:

Debit accounts 635, 811,…

Debit account 133 – Deductible VAT (1331) (if any)

Credit account 111 – Cash.

3.14. Cash fund shortage discovered during inventory but cause not yet determined, record:

Debit account 138 – Other receivables (1381)

Credit account 111 – Cash.

3.15. Cash fund amount found to be in surplus during inventory but the cause is not yet determined, record:

Debit account 111 – Cash

Credit account 338 – Other payables (3381).

3.16. Accounting for revaluation of monetary gold

– In case of profit, record:

Debit account 111 – Cash (at domestic purchase price)

Credit account 515 – Financial activity revenue.

– In case of loss, record:

Debit account 635 – Financial expenses

Credit account 111 – Cash (at domestic purchase price).

 

ACCOUNT 112 – DEMAND DEPOSITS

1. Accounting principles

This account is used to reflect the current amount and the increase and decrease in demand deposits at banks and other organizations where enterprises are allowed to deposit demand deposits according to the provisions of law, including Vietnamese currency, foreign currency,…

1. a) The basis for accounting on Account 112 – Non-term deposits is the Credit notice, Debit notice or statement of the bank or other organization where the enterprise is allowed to deposit non-term money according to the provisions of law, along with original documents (payment order, collection order, transfer check, guaranteed check, etc.).
2. b) Upon receiving documents from banks or other organizations where the enterprise deposits money without a term, the enterprise must check and compare them with the original documents attached. If there is a difference between the data in the enterprise’s accounting books, the data in the original documents and the data on the bank’s documents, etc., the enterprise must notify those units to compare, verify and handle it promptly. At the end of the month, if the cause of the difference has not been determined, the enterprise will record the books according to the data on the Debit notice, Credit notice or bank statement, etc., and the difference will be recorded in the Debit side of Account 138 – Other receivables (if the accountant’s data is larger than the bank’s data, etc.) or recorded in the Credit side of Account 338 – Other payables (if the accountant’s data is smaller than the bank’s data, etc.). In the following month, continue to check, compare and determine the cause to adjust the recorded data.
3. c) It is necessary to organize detailed accounting of demand deposits for each account at each bank or other organization where the enterprise is allowed to deposit demand deposits according to the provisions of law for convenience in checking and reconciliation.
4. d) Bank overdrafts are not recorded on the demand deposit account but are reflected similarly to bank loans,…
5. d) Depositing monetary gold in banks is carried out in accordance with relevant legal provisions and accounting for monetary gold deposited in banks (if any) is carried out similarly to Account 111 – Cash.
6. Structure and reflection content of Account 112 – Demand deposits

Debit:

– Vietnamese currency, foreign currency,… deposited in banks and other organizations where enterprises are allowed to deposit money without term according to the provisions of law;

– Exchange rate difference due to revaluation of demand deposit balance in foreign currency at the end of the accounting period (in case the foreign currency exchange rate increases compared to the accounting currency).

Creditor:

– Vietnamese currency, foreign currency,… withdrawn from banks and other organizations where enterprises are allowed to deposit money without term according to the provisions of law;

– Exchange rate difference due to revaluation of demand deposit balance in foreign currency at the end of the accounting period (in case the foreign currency exchange rate decreases compared to the accounting currency).

Debit Balance:

The amount of Vietnamese currency, foreign currency,… currently deposited at banks and other organizations where the enterprise is allowed to deposit money without a term, payable according to the provisions of law at the end of the accounting period.

Enterprises can open additional detailed accounts of account 112 to track non-term deposits (such as Vietnamese currency, foreign currency, etc.) to suit the characteristics of production and business activities and management requirements of their unit.

3. Accounting methods for some major economic transactions

3.1. When selling products, goods, providing services and collecting immediately by non-term deposit, record:

1. a) For products, goods, services, and investment real estate subject to tax (VAT, special consumption tax, export tax, etc.), enterprises reflect sales revenue and service provision at pre-tax selling prices. Indirect taxes payable are separated for each type of tax immediately upon revenue recognition, recording:

Debit account 112 – Demand deposits (total payment amount)

Credit account 511 – Sales revenue and service provision (price excluding tax)

Credit account 333 – Taxes and amounts payable to the State.

1. b) In case the taxes payable are not separated for each type of tax at the time of transaction, the enterprise records revenue including taxes payable. Periodically, the enterprise determines the tax liability and reduces revenue, recording:

Debit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and amounts payable to the State.

3.2. When receiving payment from the State for subsidies and subsidies in non-term deposits, record:

Debit account 112 – Demand deposits

Credit account 333 – Taxes and amounts payable to the State (3339).

3.3. Amounts arising from financial activities revenue, other income from demand deposits, record:

Debit account 112 – Demand deposits (total payment amount)

Credit account 515 – Financial activity revenue (price excluding VAT)

Credit account 711 – Other income (price excluding VAT)

Credit account 3331 – VAT payable (33311).

3.4. Cash withdrawal to deposit into non-term account at bank:

Debit account 112 – Demand deposits

Credit account 111 – Cash.

3.5. Receive payment from customer by bank transfer, based on bank’s credit notice,…, record:

Debit account 112 – Demand deposits

Credit account 131 – Accounts receivable from customers

Credit account 113 – Money in transit.

3.6. Collection of receivables, loans, advances, deposits, and bets using demand deposits; Receiving deposits and bets from other enterprises using demand deposits, record:

Debit account 112 – Demand deposits

There are accounts 128, 131, 136, 141, 244, 344,…

3.7. When selling short-term and long-term investments collected through demand deposits, the enterprise records the difference between the amount received and the original cost of the investment in financial revenue or financial expenses, recording:

Debit account 112 – Demand deposits

Debit account 635 – Financial expenses (if loss)

Debit account 229 – Provision for asset losses (if any)

There are accounts 121, 221, 222, 228 (cost price)

Credit account 515 – Financial activity revenue (if profit).

The reversal of provisions made for investments may be recorded immediately for each transaction at the time of sale of the investment or when determining the amount of provisions made for investments at the end of each accounting period but must be consistent with the provisions of Vietnamese accounting standards.

3.8. When receiving capital contributions from owners in the form of demand deposits, record:

Debit account 112 – Demand deposits

Debit account 4112 – Capital surplus (difference between actual received capital contribution value less than par value of shares for joint stock companies or charter capital contribution value for other types of enterprises) (if any)

Credit account 4111 – Owner’s equity

Credit account 4112 – Capital surplus (difference between actual received capital contribution value greater than par value of shares for joint stock companies or charter capital contribution value for other types of enterprises) (if any).

3.9. Withdraw deposits to cash fund, transfer non-term deposits to collateral, bet, record:

Debit account 111 – Cash

Debit account 244 – Deposit, bet.

Credit account 112 – Demand deposits.

3.10. Purchase of trading securities, term deposits, purchase of bonds, lending or investing in subsidiaries, joint ventures, associates… using non-term deposits, record:

Debit accounts 121, 128, 221, 222, 228,…

Credit account 112 – Demand deposits.

3.11. Purchase of inventory, purchase of fixed assets, expenditure for construction investment activities,… using demand deposits, record:

Debit accounts 151, 152, 153, 156, 211, 213, 241,…

Debit account 133 – Deductible VAT (1331) (if any)

Credit account 112 – Demand deposits.

3.12. Purchase of raw materials paid by demand deposits for immediate use in production and business, record:

Debit accounts 621, 623, 627, 641, 642,…

Debit account 133 – Deductible VAT (1331) (if any)

Credit account 112 – Demand deposits.

3.13. Payment of payables, loans and financial lease debts,… by non-term deposits, record:

Debit accounts 331, 333, 334, 335, 336, 338, 341,…

Credit account 112 – Demand deposits.

3.14. Financial expenses and other expenses incurred by non-term deposits, record:

Debit accounts 635, 811,…

Debit account 133 – Deductible VAT (if any)

Credit account 112 – Demand deposits.

3.15. Paying capital contributions or dividends, profits to shareholders or capital contributors, paying reward and welfare funds with non-term deposits, record:

Debit account 411 – Owner’s investment capital (capital contribution payment)

Debit account 332 – Dividends and profits payable (dividends and profits payable)

Debit account 353 – Reward and welfare fund (reward and welfare fund expenditure)

Credit account 112 – Demand deposits.

 

ACCOUNT 113 – CASH IN TRANSIT

1. Accounting principles

This account is used to reflect the amount of money that a business has deposited in the bank, sent by post,… to transfer to the bank,… but has not received a credit notice or has transferred to another business but that business has not received the payment.

2. Structure and content of Account 113 – Cash in transit

Debit:

– Amounts that have been deposited in the bank or sent by post,… to be transferred to the bank,… but have not received a receipt or have been transferred to another enterprise but that enterprise has not received the payment;

– Exchange rate difference due to revaluation of foreign currency transfer balance at reporting time.

Creditor:

– Amount transferred to Account 112 – Demand deposits or related accounts;

– Exchange rate difference due to revaluation of foreign currency transfer balance at the end of the accounting period.

Debit Balance:

Amounts in transit at the end of the accounting period.

Enterprises can open additional detailed accounts of Account 113 – Cash in transit to track types of cash in transit (for example, Vietnamese currency, foreign currency, etc.) to suit the characteristics of production and business activities and management requirements of their unit.

3. Accounting methods for some major economic transactions

3.1. Collect sales proceeds, customer debts or other income in cash or check deposited directly into the bank,… (not through the fund) but have not received a credit notice, record:

Debit account 113 – Money in transit

There are accounts 131, 511, 515, 711,…

Credit account 3331 – VAT payable (33311) (if any).

3.2. Cash withdrawal to deposit in bank,… but have not received the credit notice, record:

Debit account 113 – Money in transit

Credit account 111 – Cash.

3.3. Make a procedure to transfer money from a bank account,… to pay the creditor but the creditor has not received the payment, record:

Debit account 113 – Money in transit

Credit account 112 – Demand deposits.

3.4. The customer prepaid for the purchase by check, the business deposited the check in the bank,… but has not received the credit notice, record:

Debit account 113 – Money in transit

Credit account 131 – Accounts receivable from customers.

3.5. The bank reports that the money is being transferred to the business’s deposit account, recording:

Debit account 112 – Demand deposits

Credit account 113 – Money in transit.

3.6. When the seller, service provider,… receives the money in transit, record:

Debit accounts 331, 341,…

Credit account 113 – Money in transit.

 

ACCOUNT 121 – TRADING SECURITIES

1. Accounting principles

1.1. This account is used to reflect the current value and the purchase and sale of securities held for business purposes in accordance with the provisions of law (including securities with a maturity of more than 12 months but bought and sold by enterprises to make a profit). Business securities include: Stocks, bonds, other types of securities and financial instruments (fund certificates, stock purchase rights, warrants, call options, put options, futures contracts, commercial papers, bills of exchange, debts/loans, etc.) bought and sold by enterprises to make a profit.

account does not reflect investments held to maturity, such as: Loans under contracts between two parties, term deposits, bonds, commercial papers, treasury bills, promissory notes,… held to maturity.

1.2. Trading securities are initially recorded at the fair value of payments at the time the transaction occurs. The costs of purchasing trading securities (if any) such as brokerage, transaction, information provision, tax, bank fees, etc. are accounted for in financial expenses in the period. The time of recording trading securities is the time when the investor has ownership, specifically as follows:

– Listed securities are recorded at the time of order matching (T+0);

– Unlisted securities are recorded at the time of official ownership as prescribed by law.

1.3. Enterprises must fully and promptly account for income from securities investment activities.

1. a) Enterprises are only allowed to record cash dividends from trading securities in financial operating revenue for the period after the investment date. Cash dividends or interest received in cash for the period before the investment date are recorded as a reduction in the value of the investment.
2. b) In case an investor receives additional shares due to the investee being a joint stock company using capital surplus, equity funds and undistributed profits after tax to issue additional shares (dividends in shares), the investor only monitors the number of additional shares on the Financial Statements notes, does not record the value of the shares received, does not record financial activity revenue and does not record an increase in trading securities.

1.4. Enterprises must open books to track in detail the types of business securities that the enterprise is holding (by each type of securities; by each subject, face value, actual purchase price, each type of original currency used for investment…).

1.5. When liquidating, transferring or exchanging trading securities (calculated by each type of securities), the cost price is determined by the weighted average or first-in, first-out method. Enterprises must consistently apply the chosen method to calculate the cost price of trading securities over accounting periods. In case of changing the method of calculating the cost price of trading securities, enterprises must present and explain as a change in accounting policy in accordance with the provisions of Vietnamese accounting standards.

1.6. At the end of the accounting period, if the market value of trading securities falls below the original price, the enterprise must set up a provision for losses on those trading securities according to the instructions in Account 229 – Provision for asset losses.

1.7. During the holding period, enterprises are not allowed to reclassify trading securities into investments held to maturity and vice versa.

1.8. Determining actual transaction exchange rates, recorded exchange rates, arising transactions and revaluation of trading securities which are foreign currency items (if any) are guided in Account 413 – Exchange rate differences.

2. Structure and content of Account 121 – Trading securities

Debit:

The value of trading securities increased.

Creditor:

The value of trading securities decreased.

Debit Balance:

Value of trading securities at the end of the accounting period.

Enterprises can open additional detailed accounts of Account 121 – Trading securities to track each type of trading securities (e.g. stocks, bonds, etc.) to suit the characteristics of production and business activities and management requirements of their unit.

3. Accounting methods for some major economic transactions

3.1. When purchasing trading securities, based on the actual purchase price, record:

Debit account 121 – Trading securities

There are accounts 111, 112, 141, 244, 331,…

3.2. Costs of purchasing trading securities such as brokerage costs, transaction costs, information costs, bank fees, etc. are accounted for in financial expenses, recorded as:

Debit account 635 – Financial expenses

There are accounts 111, 112, 331,…

3.3. Periodic collection of interest on trading securities such as bonds and other securities:

– In case of receiving bond interest and using the interest to continue buying additional bonds and treasury bills (not bringing money back to the business but using the interest to immediately buy bonds), record:

Debit account 121 – Trading securities

Credit account 515 – Financial activity revenue.

– In case dividends, profits or bond interest are distributed in cash:

Debit accounts 111, 112, 138,… (total interest earned)

Credit account 121 – Trading securities (accumulated investment interest before the enterprise repurchases the investment)

Credit account 515 – Financial activity revenue (interest portion of periods after the enterprise repurchases the investment).

3.4. When selling or transferring trading securities:

– In case of profit, record:

Debit accounts 111, 112, 131,… (Total amount received)

Debit account 229 – Asset loss provision (amount of provision set up corresponding to sold trading securities) (if any)

Credit account 121 – Trading securities (book value)

Credit account 515 – Financial activity revenue (difference).

– In case of loss, record:

Debit accounts 111, 112,… (Total amount collected)

Debit account 229 – Provision for asset losses (2291) (amount of provision set up corresponding to sold trading securities) (if any)

Debit account 635 – Financial expenses (Difference between actual loss and provision amount)

Credit account 121 – Trading securities (book value).

The reversal of provisions for impairment of trading securities may be recorded immediately for each transaction at the time of sale or transfer of trading securities or when determining the amount of provisions for impairment of trading securities at the end of each accounting period, but must be consistent with the provisions of Vietnamese accounting standards.

3.5. Expenses on selling trading securities (if any), record:

Debit account 635 – Financial expenses

There are accounts 111, 112, 331,…

3.6. In case an enterprise buys or sells trading securities in the form of stock exchange, the enterprise must determine the fair value of the shares received at the time of exchange. The difference (if any) between the fair value of the shares received and the book value of the shares exchanged is recorded as financial income (if profit) or financial expenses (if loss).

Debit account 121 – Trading securities (fair value of received shares)

Debit account 635 – Financial expenses (if loss)

Credit account 121 – Trading securities (book value of shares exchanged)

Credit account 515 – Financial activity revenue (if profit).

 

ACCOUNT 128 – INVESTMENTS HELD TO MATURITY

1. Accounting principles

1.1. This account is used to reflect the current amount and the increase or decrease in investments held to maturity such as: Term deposits at banks,… valuable papers (including bills, promissory notes, deposit certificates), bonds, preferred shares classified as liabilities, loans held to maturity for the purpose of collecting periodic interest, other investments held to maturity or of a similar nature and excluding derivative instruments.

This account does not reflect bonds and other debt instruments held for trading purposes for profit (reflected in Account 121 – Trading securities).

1.2. Enterprises must open detailed books to track each investment held to maturity by term, by subject, by currency, by quantity, etc. When preparing financial statements, enterprises must base on the remaining term of the investment held to maturity (from 12 months or less or more than 12 months from the end of the accounting period) to present it as a short-term or long-term asset.

1.3. Enterprises must fully and promptly account for financial revenue arising from investments, such as term deposit interest, loan interest, bond interest, etc., when liquidating or selling investments held to maturity, etc.

1.4. At the end of the accounting period, if there is any sign or evidence that the enterprise’s held-to-maturity investment may be lost, the enterprise must make a provision for losses on held-to-maturity investments according to the instructions in Account 229 – Provision for losses on assets.

1.5. In case an enterprise’s investment held to maturity incurs a discount (the bond issuance price is less than the face value of the bond) or a premium (the bond issuance price is greater than the face value of the bond), the discount or premium shall be gradually allocated to financial operating revenue using the straight-line method or the effective interest rate method in accordance with the term of the investment. However, if the premium of the investment held to maturity allocated periodically is greater than the interest at the nominal interest rate of the investment held to maturity (if any), the difference shall be accounted for in financial expenses.

In case an enterprise purchases a held-to-maturity investment with a floating interest rate that is periodically re-determined according to the market, and the update of the floating interest rate will eliminate the discount or premium related to the advantage/disadvantage of the instrument, the discount or premium will be allocated to the period from the date of purchase to the next interest rate closing date (the date on which the nominal interest rate of the bond is determined according to interest rate fluctuations in the market).

In case an enterprise purchases a held-to-maturity investment with a floating interest rate that is periodically re-determined according to the market and at the same time the discount or premium related to the advantage/disadvantage of the instrument that cannot be eliminated by updating the floating interest rate, the discount or premium is allocated over the entire life of the instrument.

Enterprises may choose to allocate discounts or premiums of held-to-maturity investments over the life of the instrument using the straight-line method or the effective interest rate method, but must be consistent with the provisions of Vietnamese accounting standards.

1.6. Determining the actual transaction exchange rate, the recorded exchange rate, the transactions that arise and the revaluation of investments held to maturity are foreign currency-denominated monetary items as guided in Account 413 – Exchange rate differences.

2. Structure and content of Account 128 – Investments held to maturity

Debit:

The value of investments held to maturity increases.

Creditor:

The value of investments held to maturity decreases.

Debit Balance:

The value of investments held to maturity existing at the end of the accounting period.

Account 128 – Investments held to maturity has 4 sub-accounts:

– Account 1281 – Term deposits: Reflects the current amount and the increase and decrease of term deposits and other financial instruments with similar characteristics to term deposits.

– Account 1282 – Bonds: Reflects the current number and increase and decrease of bonds that the enterprise is able and intends to hold until maturity and other financial instruments with similar characteristics to bonds.

– Account 1283 – Loans: Reflects the current amount and the increase and decrease of loans under contracts between parties in accordance with the provisions of law. Depending on each contract, loans under contracts can be recovered once at maturity or gradually recovered each period.

– Account 1288 – Other investments held to maturity: Reflects the current amount and increase and decrease of other investments held to maturity (other than term deposits, bonds and loans), such as preferred stocks classified as liabilities, commercial papers, etc.

3. Accounting methods for some major economic transactions

3.1. Accounting for purchased investments held to maturity and amortizing discounts or premiums (if any) using the straight-line method

3.1.1 Accounting for investments held to maturity at par value

1. a) When spending money to buy investments to be held until maturity (term deposits, buying bonds, loans…), record:

Debit account 128 – Investments held to maturity

There are accounts 111, 112,… (actual amount spent to purchase the investment).

– In case the investment is held until maturity and interest is received in advance, the actual amount paid to purchase the investment = face value – interest received in advance for many periods.

– In case the investment is held until maturity and receives periodic interest or interest later, the actual amount spent to purchase the investment is at par value.

1. b) Periodically, the enterprise records interest on investments held to maturity in financial revenue of each period, recording:

– For receiving interest in advance or receiving interest later (including maturity), record:

Debit account 128 – Investment held to maturity (in case of receiving interest before or after)

Credit account 515 – Financial activity revenue.

– In case of receiving periodic interest (except maturity date), record:

Debit accounts 111, 112,… (in case of receiving periodic interest)

Credit account 515 – Financial activity revenue

1. c) At the end of the term of the investment held to maturity:

– In case of receiving interest before or after, record:

Debit accounts 111, 112,… (actual amount collected)

Credit account 128 – Investments held to maturity.

– In case of receiving periodic interest, record:

Debit accounts 111, 112,… (actual amount collected)

Credit account 128 – Investments held to maturity

Credit account 515 – Financial activity revenue.

3.1.2. Accounting for investments held to maturity with discount

1. a) When spending money to buy investments to be held until maturity (term deposits, buying bonds, loans…), record:

Debit account 128 – Investments held to maturity

There are accounts 111, 112,… (actual amount spent to purchase the investment).

– In case the investment is held until maturity and interest is received in advance, the actual amount paid to purchase the investment = face value – interest received in advance for many periods – discount amount.

– In case the investment is held until maturity and receives periodic interest or interest later, the actual amount paid to purchase the investment = face value – discount amount.

1. b) Periodically, the enterprise records the interest amount of each period and the investment discount amount allocated for each period in the financial operating revenue of each period, recording:

– In case of receiving interest in advance or receiving interest later (including maturity period), record:

Debit account 128 – Investments held to maturity (interest and discount amount of investment allocated for each period)

Credit account 515 – Financial activity revenue.

– In case of receiving periodic interest:

+ Allocate the discount amount of the investment (including maturity), record:

Debit account 128 – Investments held to maturity (discount amount of investment allocated for each period)

Credit account 515 – Financial activity revenue.

+ Reflects the amount of interest received for each period (except maturity period)

Debit accounts 111, 112,… (interest received for each period)

Credit account 515 – Financial activity revenue.

1. c) At the end of the term of the investment held to maturity:

– In case of receiving interest before or after, record:

Debit accounts 111, 112,… (actual amount collected)

Credit account 128 – Investments held to maturity.

– In case of receiving periodic interest, record:

Debit accounts 111, 112,… (actual amount collected)

Credit account 128 – Investments held to maturity.

Credit account 515 – Financial activity revenue (interest on maturity date)

3.1.3. Accounting for held-to-maturity investments with premium

1. a) When spending money to buy investments to be held until maturity (term deposits, buying bonds, loans…), record:

Debit account 128 – Investments held to maturity

There are accounts 111, 112,… (actual amount spent to purchase the investment).

– In case the investment is held until maturity and interest is received in advance, the actual amount paid to purchase the investment = face value – interest received in advance for many periods + additional amount.

– In case the investment is held until maturity and receives periodic interest or interest later, the actual amount paid to purchase the investment = par value + premium.

1. b) Periodically, the enterprise records the difference between the interest amount of each period and the excess amount of the investment allocated for each period in the financial operating revenue of each period, recording:

– In case of receiving interest in advance or receiving interest later (including maturity period), record:

Debit account 128 – Investments held to maturity (interest amount of each period minus (-) the excess amount of the investment allocated for each period)

Credit account 515 – Financial activity revenue.

– In case of receiving periodic interest:

+ Allocate the excess amount of the investment (including maturity), record:

Debit account 515 – Financial activity revenue

Credit account 128 – Investments held to maturity (the excess amount of the investment allocated to each period).

+ Interest received for each period (except maturity period), record:

Debit accounts 111, 112,… (interest received for each period)

Credit account 515 – Financial activity revenue.

1. c) At the end of the term of the investment held to maturity:

– In case of receiving interest before or after, record:

Debit accounts 111, 112,… (actual amount collected)

Credit account 128 – Investments held to maturity.

– In case of receiving periodic interest, record:

Debit accounts 111, 112,… (actual amount collected)

Credit account 128 – Investments held to maturity.

Credit account 515 – Financial activity revenue (interest on maturity date)

3.2. Accounting for the purchase of held-to-maturity investments and the allocation of bond discounts or premiums (if any) using the effective interest rate method

1. a) When purchasing an investment to be held until maturity (term deposit, bond purchase, loan…), record:

Debit account 128 – Investments held to maturity

There are accounts 111, 112,… (actual amount spent)

– In case the investment is held until maturity and interest is received in advance, the actual amount paid to purchase the investment = par value minus (-) the interest received in advance for many periods plus (+) the premium or minus (-) the discount.

– In case the investment is held until maturity and receives periodic interest or interest later, the actual amount paid to purchase the investment = par value plus (+) premium or minus (-) discount.

1. b) After initial recognition, the enterprise shall base on the nominal interest rate, discount or premium, and investment purchase cost to determine the real interest rate of the investment as the basis for calculating and allocating the interest amount for each period (including maturity period) according to regulations.

– In case of receiving interest before or after, record:

Debit account 128 – Investments held to maturity

Credit account 515 – Financial activity revenue (interest amount each period according to actual interest rate).

– In case of receiving periodic interest, record:

Debit accounts 111, 112 (interest received each period at nominal interest rate)

Debit account 128 – Investment held to maturity (Difference between nominal interest rate and real interest rate of investment held to maturity) (if any)

Credit account 515 – Financial activity revenue (interest amount each period according to actual interest rate)

Credit account 128 – Investments held to maturity (Difference between nominal interest rate and actual interest rate of investments held to maturity) (if any).

1. c) At the end of the term of the investment held to maturity:

Debit accounts 111, 112,… (actual amount collected)

Credit account 128 – Investments held to maturity.

– In case the investment is held until maturity and interest is received early, the actual amount received = par value.

– In case the investment is held until maturity to receive periodic interest, the actual amount received = par value + interest amount of the maturity period at the nominal interest rate.

– In case the investment is held until maturity and interest is received later, the actual amount received = par value + total interest of the investment at the nominal interest rate.

3.3. In case of early liquidation of investments held to maturity, record:

Debit accounts 111, 112,…

Debit account 229 – Provision for asset losses (2291) (amount of provision set up corresponding to investments held to maturity that have been liquidated) (if any)

Debit account 635 – Financial expenses (if loss)

Credit account 128 – Investments held to maturity (book value)

Credit account 515 – Financial activity revenue (if profit).

 

PRINCIPLES OF ACCOUNTING FOR RECEIVABLES

1. Enterprises must monitor in detail the receivables according to each receivable period, receivable subject, original receivable currency and other factors in accordance with the characteristics of production and business activities and management requirements of the enterprise.
2. The classification of receivables as customer receivables, internal receivables, and other receivables is carried out according to the following principles:
3. a) Receivables from customers include commercial receivables arising from purchase-sale transactions, such as: Receivables from sales of goods, provision of services; receivables from liquidation and transfer of assets (fixed assets, investment real estate, financial investments) between the enterprise and the buyer (an independent unit of the seller and not a affiliated unit of the enterprise). This receivable includes receivables from export sales of the consignor through the consignee;
4. b) Internal receivables include receivables between an enterprise and its affiliated units or between affiliated units;
5. c) Other receivables include non-commercial receivables not related to purchase and sale transactions, such as: receivables for dividends and profits distributed in cash, amounts paid on behalf of third parties, amounts paid by the import-export trustee on behalf of the trustee, non-monetary asset loans, fines, compensation, missing assets awaiting resolution, etc.
6. Accounting principles for receivables in foreign currency:

3.1. Enterprises must monitor in detail the receivables in the original currency. When transactions related to receivables in foreign currency arise, enterprises must convert them into the accounting currency according to the following principles:

1. a) The debit side of receivables applies the actual transaction exchange rate.
2. b) The Credit side of receivable accounts applies the actual transaction exchange rate or the book exchange rate.
3. c) In case an enterprise has a transaction of prepaying money to the seller to purchase goods or services, when receiving the goods or services,… the value of the goods or services received corresponding to the foreign currency prepaid will be applied at the actual transaction exchange rate at the time of prepayment.

3.2. At the end of the accounting period, the enterprise must re-evaluate the balance of receivables which are foreign currency items at the average transfer exchange rate of the commercial bank where the enterprise regularly conducts transactions.

3.3. Determining actual transaction exchange rates, recorded exchange rates, arising transactions and revaluation of receivables in foreign currencies are guided in Account 413 – Exchange rate differences.

4. When preparing the Financial Statement, the enterprise bases on the remaining term of the receivables (from 12 months or less or more than 12 months from the end of the accounting period) to present them as short-term or long-term assets. The receivables indicators of the Financial Status Report may include items reflected in accounts other than receivables, such as: Deposits, escrows reflected in Account 244 – Deposits, escrows, advances in Account 141 – Advances,… When there is any sign or evidence that the enterprise is unable to recover or is unlikely to recover the receivables of the enterprise, it must set up a provision for bad debts according to the instructions in Account 229 – Provision for asset losses.

 

ACCOUNT 131 – CUSTOMER RECEIVABLES

1. Accounting principles
2. a) This account is used to reflect the receivables of customers (receivables whose right to collect money depends only on the time factor) and the payment status of receivables of the enterprise to customers for the sale of products, goods, real estate, fixed assets, financial investments, and service provision. This account is also used to reflect the receivables of the construction contractor to the contractor for the completed construction work volume.
3. b) Customer receivables must be accounted for in detail for each subject, each receivable content, tracking the collection period in detail (from 12 months or less or more than 12 months from the end of the accounting period) and recording each payment. Receivable subjects are customers who have economic relations with the enterprise regarding the purchase of products, goods, receiving the provision of services, including fixed assets, investment real estate, and financial investments.
4. c) The export trustee records in this account the receivables from the export trustee for export sales proceeds as normal sales and service provision transactions.
5. d) When preparing Financial Statements, enterprises must classify receivables, receivables that can be paid on time, overdue or not overdue but cannot be recovered or are difficult to recover… to have measures to handle bad debts and set up provisions for bad debts according to regulations.
6. Structure and content of Account 131 – Customer receivables

Debit:

– Amounts receivable from customers arising during the period when selling products, goods, investment real estate, fixed assets, services, and financial investments;

– Excess money returned to the customer;

– Revaluation of customer receivables as foreign currency items (in case the foreign currency exchange rate increases compared to the accounting currency).

Creditor:

– Amount of money the customer has paid;

– Amount received in advance, prepaid by customers;

– Revenue from goods sold returned by buyers (with or without VAT);

– Payment discounts, trade discounts, sales discounts for buyers;

– Revaluation of customer receivables which are foreign currency items (in case the foreign currency exchange rate decreases compared to the accounting currency).

Debit Balance:

Amounts receivable from customers at the end of the accounting period.

This account may have a credit balance. The credit balance reflects the amount received in advance or the amount collected is more than the amount receivable from customers detailed by each specific object. When preparing the Financial Status Report, the enterprise takes the detailed balance by each object receivable of this account to record in both the “Assets” and “Capital” indicators.

3. Accounting methods for some major economic transactions

3.1. When selling products, goods, or providing services that are not yet immediately collected in cash (including receivables from export sales of the consignor), the enterprise records revenue and records:

1. a) For products, goods, services, and investment real estate subject to indirect taxes (VAT, special consumption tax, export tax, environmental protection tax), enterprises reflect sales revenue and service provision at pre-tax selling prices. Indirect taxes payable are separated for each type of tax immediately upon revenue recognition, recording:

Debit account 131 – Accounts receivable from customers (total payment amount)

Credit account 511 – Sales revenue and service provision (price excluding tax)

Credit account 333 – Taxes and amounts payable to the State.

1. b) In case indirect taxes payable are not immediately separated by type, the enterprise records revenue including taxes payable. Periodically, the enterprise determines tax obligations payable and reduces revenue, recording:

Debit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and amounts payable to the State.

3.2. Accounting for goods returned by customers:

Debit account 521 – Revenue deductions

Debit account 333 – Taxes and amounts payable to the State (VAT amount of returned goods, details for each type of tax) (if any)

Credit account 131 – Accounts receivable from customers.

3.3. Accounting for trade discounts and sales allowances

1. a) In case the amount of trade discounts and sales discounts is recorded on the sales invoice, the accountant reflects the revenue according to the price minus the discount (recorded according to net revenue) and does not separately reflect the discount or sale discount;
2. b) In case the sales invoice does not show the amount of trade discount or sales price reduction because the customer is not eligible for it or the amount of discount or price reduction has not been determined, the revenue is recorded at the price before deducting the discount (gross revenue). After the time of revenue recognition, if the customer is eligible for the discount or price reduction, the enterprise must record the discount separately to periodically adjust the revenue reduction, recording:

Debit account 521 – Revenue deductions

Debit account 333 – Taxes and amounts payable to the State (tax amount of discounted goods, trade discounts) (if any)

Credit account 131 – Accounts receivable from customers (total discount amount).

3.4. The payment discount payable to the buyer due to the buyer paying for the purchase before the prescribed deadline, deducted from the customer’s receivable, recorded:

Debit accounts 111, 112,…

Debit account 635 – Financial expenses (Payment discount amount)

Credit account 131 – Accounts receivable from customers.

3.5. Receive money paid by customers (including interest on the debt – if any), receive advance payment from customers according to sales or service contracts, record:

Debit accounts 111, 112,…

Credit account 131 – Accounts receivable from customers

Credit account 515 – Financial revenue (interest portion).

3.6. Method of accounting for receivables of contractors to customers related to construction contracts:

1. a) In case the construction contract stipulates that the contractor is paid according to the planned progress:

– When the results of construction contract performance are reliably estimated, the contractor, based on documents reflecting revenue corresponding to the completed work (not invoices) determined by the contractor, records:

Debit account 337 – Payment according to construction contract progress plan

Credit account 511 – Sales revenue and service provision.

– Based on the invoice prepared according to the planned progress to reflect the amount the customer must pay according to the planned progress stated in the contract, record:

Debit account 131 – Accounts receivable from customers

Credit account 337 – Payment according to construction contract progress plan

Credit account 3331 – VAT payable (33311) (if any).

1. b) In case the construction contract stipulates that the contractor is paid according to the value of the performed volume, when the results of the construction contract performance are reliably determined and confirmed by the customer, the enterprise must record revenue based on the completed work confirmed by the customer, recording:

Debit account 131 – Accounts receivable from customers

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (33311) (if any).

1. c) Bonus received from customers paying extra to contractors when performing contracts that meet or exceed certain specific targets stated in the contract, recorded:

Debit account 131 – Accounts receivable from customers

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (33311) (if any).

1. d) Compensation received from customers or other parties to compensate for costs not included in the contract value (such as delays, customer failures and disputes over changes in contract performance), recorded:

Debit account 131 – Accounts receivable from customers

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (33311) (if any).

1. d) When receiving payment for completed work volume from customers, record:

Debit accounts 111, 112,…

Credit account 131 – Accounts receivable from customers.

3.7. In case the customer does not pay in cash but pays in goods (by barter method), based on the value of materials and goods received in exchange (calculated according to the reasonable value recorded in the VAT Invoice or Sales Invoice of the customer) deducted from the customer’s receivable debt, record:

Debit accounts 152, 153, 156,…

Debit account 133 – Deductible VAT (if any)

Credit account 131 – Accounts receivable from customers.

3.8. In case of an irrecoverable receivable, it must be financially handled according to regulations. Based on the decision of the competent authority on handling the write-off of the receivable, record:

Debit account 229 – Provision for asset loss (2293) (amount of provision made)

Debit account 642 – Business management expenses (amount not yet provisioned)

Credit account 131 – Accounts receivable from customers.

At the same time, open a book to track the bad debt that has been handled to continue monitoring within the prescribed time limit to be able to collect the debtor for that amount.

3.9. The import-export consignee reflects the receivable for import-export consignment fees received from the consignor, based on the invoice, and records:

Debit account 131 – Accounts receivable from customers

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (33311).

 

ACCOUNT 133 – DEDUCTIBLE VALUE ADDED TAX

1. Accounting principles
2. a) This account is used to reflect the deductible, deducted and remaining deductible input VAT of the enterprise.
3. b) Enterprises must account separately for deductible input VAT and non-deductible input VAT. In case separate accounting is not possible, the input VAT amount shall be recorded in Account 133. At the end of the period, enterprises must determine the deductible and non-deductible VAT amount according to the provisions of the law on VAT.
4. c) The non-deductible input VAT amount is calculated into the value of purchased assets, cost of goods sold or production and business costs depending on each specific case.
5. d) Determining the amount of deductible input VAT, declaring, settling and paying tax must comply with the provisions of the law on VAT.
6. Structure and content of Account 133 – Deductible VAT

Debit:

Deductible input VAT.

Creditor:

– Deducted input VAT;

– Carry forward non-deductible input VAT;

– Input VAT of materials, goods and services purchased but returned or discounted;

– Input VAT has been refunded.

Debit Balance:

Remaining deductible input VAT, refundable input VAT but not yet refunded by the State budget at the end of the accounting period.

Account 133 – Deductible VAT, has 2 sub-accounts:

– Account 1331 – Deductible VAT of goods and services: Reflects deductible input VAT of materials, goods and services purchased from outside for use in production and trading of goods and services subject to VAT calculated by the tax deduction method.

– Account 1332 – Deductible VAT of fixed assets: Reflects input VAT of investment activities, purchasing fixed assets, investment real estate used for production and trading of goods and services subject to VAT calculated by the tax deduction method.

3. Accounting methods for some major economic transactions

3.1. When purchasing inventory, fixed assets, and investment real estate, record:

Debit accounts 152, 153, 156, 211, 213, 217,…

Debit account 133 – Deductible VAT (1331, 1332) (if any)

There are accounts 111, 112, 331,… (total payment amount).

3.2. When purchasing materials, goods, and services for immediate use in production and business, record:

Debit accounts 241, 242, 621, 623, 627, 641, 642,…

Debit account 133 – Deductible VAT (1331) (if any)

There are accounts 111, 112, 331,… (total payment amount).

3.3. When purchasing goods for immediate sale to customers (without going through the warehouse), record:

Debit account 632 – Cost of goods sold

Debit account 133 – Deductible VAT (1331) (if any)

There are accounts 111, 112, 331,… (total payment amount).

3.4. When importing materials, goods, and fixed assets:

– Enterprises reflect the value of imported materials, goods, and fixed assets including the total amount payable to the seller (according to the actual transaction exchange rate), import tax, special consumption tax, environmental protection tax payable, and transportation costs (if any), recording:

Debit accounts 152, 153, 156, 211,…

Credit account 3331 – VAT payable (33312) (if input VAT of imported goods is not deductible)

Credit account 3332 – Special consumption tax (if any)

Credit account 3333 – Import and export tax (import tax details)

Credit account 33381 – Environmental Protection Tax (if any)

There are accounts 111, 112, 331,…

– If input VAT of imported goods is deductible, record:

Debit account 133 – Deductible VAT (1331, 1332)

Credit account 333 – Taxes and amounts payable to the State (33312).

3.5. In case of purchased goods returned to the seller or purchased goods discounted due to poor quality: Based on the return documents to the seller and related documents, the enterprise reflects the value of purchased goods returned to the seller or purchased goods discounted, input VAT is not deductible, recording:

Debit accounts 111, 112, 331 (total payment amount)

Credit account 133 – Deductible VAT (input VAT of returned or discounted purchased goods)

There are accounts 152, 153, 156, 211,… (purchase price does not include VAT).

3.6. Cases where deductible and non-deductible input VAT cannot be accounted for separately:

1. a) When purchasing materials, goods, and fixed assets, record:

Debit accounts 152, 153, 156, 211, 213 (purchase price excluding VAT)

Debit account 133 – Deductible VAT (input VAT)

There are accounts 111, 112, 331,…

1. b) At the end of the period, the enterprise calculates and determines deductible and non-deductible input VAT according to the provisions of the law on VAT. Non-deductible input VAT is calculated into the value of purchased assets, cost of goods sold or production and business costs depending on each specific case, recorded as follows:

Debit accounts 152, 156, 211, 627, 632, 641, 642,…

Credit account 133 – Deductible VAT (1331).

3.7. For purchased materials, goods, and fixed assets that are damaged due to natural disasters, fires, or are lost, input VAT deductions shall be made in accordance with tax laws. If input VAT on these assets is not deductible:

+ If the cause is not yet determined and is pending processing, record:

Debit account 138 – Other receivables (1381)

Credit account 133 – Deductible VAT (1331, 1332).

+ When there is a decision by the competent authority on the compensation collected from organizations and individuals, record:

Debit accounts 111, 112, 334,… (compensation revenue)

Debit account 632 – Cost of goods sold (if included in expenses)

Credit account 138 – Other receivables (1381)

There is account 133 – Deductible VAT (if the cause is determined and there is an immediate decision to handle it).

3.8. At the end of the period, the enterprise determines the input VAT amount deductible from the output VAT amount when determining the VAT payable in the period, recording:

Debit account 3331 – VAT payable (33311)

There is account 133 – Deductible VAT.

3.9. When receiving a refund of input VAT on goods and services, record:

Debit accounts 111, 112,….

Credit account 133 – Deductible VAT (1331).

 

ACCOUNT 136 – INTERNAL RECEIVABLES

1. Accounting principles
2. a) This account is used to reflect the receivables and the payment status of receivables of an enterprise with its affiliated units or between affiliated units of an enterprise.
3. b) The contents of internal receivables reflected in Account 136 – Internal receivables include:

– In business:

+ Capital and funds assigned and granted to affiliated units;

+ Amounts that affiliated units must pay to the enterprise according to regulations;

+ Amounts collected by affiliated units;

+ Amounts spent and paid on behalf of affiliated units;

+ Amounts assigned to affiliated units to perform internal contracted volume and receive internal contracted value;

+ Other current receivables.

– At affiliated units:

+ Capital and funds that the enterprise has assigned or granted but not yet received;

+ Revenue from sales of goods and provision of services between the head office and affiliated units or between affiliated units;

+ Amounts collected by other businesses or affiliated units;

+ Amounts spent and paid on behalf of enterprises and other affiliated units;

+ Other current internal receivables.

1. c) Account 136 – Internal receivables must be accounted for in detail for each affiliated unit with payment relationships and each internal receivable must be monitored separately. Enterprises need to have measures to urge the settlement of internal receivables within the accounting period.
2. d) At the end of the accounting period, the enterprise must check, compare and confirm the arising amount, balance of Account 136 – Internal receivables, Account 336 – Internal payables with related affiliated units according to each payment content. Make offsetting payments for each item with each affiliated unit, and simultaneously offset on 2 Accounts 136 – Internal receivables and Account 336 – Internal payables (according to details of each subject). When comparing, if there is a difference, the cause must be found and adjusted promptly.
3. Structure and content of Account 136 – Internal receivables

Debit:

– Capital that the enterprise has assigned or granted to its affiliated units;

– Funds assigned by the investor to the Project Management Board; Other amounts are recorded as an increase in the investor’s receivables from the Project Management Board;

– Amounts paid by affiliated units on behalf of enterprises or other affiliated units;

– Amount of money the enterprise must collect, amounts that affiliated units must pay to the enterprise;

– Amount of money that the affiliated unit must collect, amount of money that the enterprise must pay down;

– Amount receivable for products, goods and services between affiliated units.

– Other internal receivables.

Creditor:

– Capital and fund recovery at affiliated units;

– Value of completed fixed assets transferred from the Project Management Board; Other amounts are recorded as reductions in the investor’s receivables from the Project Management Board;

– Amount collected from internal receivables;

– Offset receivables with payables within the same entity.

Debit Balance:

Amount of debt receivable from affiliated units at the end of the accounting period.

Account 136 – Internal receivables, has 4 sub-accounts:

– Account 1361 – Working capital at affiliated units: This account is only opened at the enterprise to reflect the existing working capital provided by the enterprise to affiliated units.

This account does not reflect the capital invested by the parent company in subsidiaries because it is reflected in Account 221 – Investment in subsidiaries.

– Account 1362 – Internal receivables for exchange rate differences: This account is only opened in enterprises that are Investors and have established Project Management Boards, used to reflect the exchange rate differences arising from the Project Management Boards transferred up.

– Account 1363 – Internal receivables on borrowing costs eligible for capitalization: This account is only opened in enterprises that are Investors and have established Project Management Boards, used to reflect the capitalized borrowing costs arising at the Project Management Board.

– Account 1368 – Other internal receivables: Reflects all other receivables between the head office and affiliated units or between affiliated units.

3. Accounting methods for some major economic transactions

3.1. At affiliated units

1. a) When paying on behalf of enterprises and other affiliated units, record:

Debit account 136 – Internal receivables (1368)

There are accounts 111 and 112.

1. b) Based on the enterprise’s announcement of the number of bonus and welfare funds allocated by the enterprise, record:

Debit account 136 – Internal receivables (1368)

Credit account 353 – Reward and welfare fund.

1. c) When selling products, goods, and providing services to other units within the enterprise, depending on the operational characteristics and hierarchy of each unit:

– In case the affiliated unit is decentralized to record revenue, record:

Debit account 136 – Internal receivables (1368)

Credit account 511 – Sales revenue and service provision (details of internal sales transactions)

Credit account 333 – Taxes and amounts payable to the State (3331).

At the same time, record the cost price, record:

Debit account 632 – Cost of goods sold

There are accounts 154, 155, 156,…

– In case the affiliated unit is not authorized to record revenue, the value of internally provided products, goods and services is reflected as internal receivables, recorded:

Debit account 136 – Internal receivables (1368)

There are accounts 154, 155, 156,…

Credit account 333 – Taxes and amounts payable to the State (if any).

1. d) The warehouse receives money or materials, assets from the enterprise or other affiliated unit to pay for receivables, record:

Debit accounts 111, 112, 152, 153,…

Credit account 136 – Internal receivables (1368).

1. d) Offset internal receivables with internal payables of the same entity, record:

Debit account 336 – Internal payables (3368)

Credit account 136 – Internal receivables (1368).

3.2. Accounting in enterprises

1. a) When an enterprise assigns or provides capital to a affiliated unit:

– In case of capital transfer in cash or inventory, record:

Debit account 1361 – Business capital at affiliated units

There are accounts 111, 112, 156,…

– In case of capital transfer by fixed assets, record:

Debit account 136 – Internal receivables (remaining value of fixed assets) (1361)

Debit account 214 – Depreciation of fixed assets (depreciation value of fixed assets)

Credit account 211 – Tangible fixed assets (original price).

1. b) In case the affiliated unit has to return capital to the enterprise, upon receiving the money submitted by the affiliated unit, record:

Debit accounts 111, 112,…

Credit account 136 – Internal receivables (1361).

1. c) Based on the report of the affiliated unit on the business capital the affiliated unit has submitted to the State Budget under the authorization of the superior, record:

Debit account 411 – Owner’s investment capital

Credit account 136 – Internal receivables (1361).

1. d) When selling products, goods, and providing services to internal units of the enterprise, depending on the operational characteristics and hierarchy of each unit, the enterprise can record revenue at the time of transferring goods and services to affiliated units or at the time when the affiliated unit sells goods and provides services to the outside:

– In case an enterprise records revenue at the time of transferring goods and services to a affiliated unit, record:

Debit account 136 – Internal receivables (1368)

Credit account 511 – Sales revenue and service provision (details of internal sales transactions)

Credit account 333 – Taxes and amounts payable to the State (if any).

– In case the enterprise does not record revenue at the time of transferring goods and services to affiliated units:

+ When transferring goods and services, record:

Debit account 136 – Internal receivables (1368)

There are accounts 154, 155, 156,…

Credit account 333 – Taxes and amounts payable to the State (if any).

+ When a subsidiary announces that it has sold products, goods, or services to a third party outside the enterprise, the enterprise records revenue and records:

Debit account 136 – Internal receivables (1368)

Credit account 511 – Sales revenue and service provision.

At the same time, record the cost price, record:

Debit account 632 – Cost of goods sold

Credit account 136 – Internal receivables (1368).

1. d) Receivables from interest on production, business and other activities of affiliated units, record:

Debit account 136 – Internal receivables (1368)

Credit account 421 – Undistributed profit after tax.

1. e) When paying on behalf of affiliated units, record:

Debit account 136 – Internal receivables (1368)

There are accounts 111, 112,…

1. g) When receiving money submitted by a affiliated unit for business profits, paying for expenses paid on behalf of a affiliated unit, record:

Debit accounts 111, 112,…

Credit account 136 – Internal receivables (1368).

1. h) Offset internal receivables with internal payables of the same entity, record:

Debit account 336 – Internal payables (3368)

Credit account 136 – Internal receivables (1368).

3.3. Accountant at the Investor who has established the Project Management Board

1. a) When the investor decides to transfer investment capital in cash, materials, and fixed assets to the Investment Project Management Board, record:

Debit account 136 – Internal receivables (1361)

Debit account 214 – Depreciation of fixed assets

There are accounts 111, 112, 152,…

There is account 211 – Tangible fixed assets.

1. b) Interest on bank deposits due to temporarily unused investment capital transferred by the investment project management boards to the investors, investors, recorded:

Debit account 136 – Internal receivables (1368)

Credit account 515 – Financial activity revenue.

1. c) The investor transfers eligible borrowing costs that can be capitalized into the value of the project to the Project Management Board and includes them in construction investment costs, recording:

Debit account 136 – Internal receivables (1363)

There are accounts 111, 112, 335,…

1. d) Warehouse receives revenue, financial revenue, other income submitted by the Project Management Boards, records:

Debit account 136 – Internal receivables (1362, 1368)

There are accounts 511, 515, 711,…

1. d) When the Project Management Board transfers the input VAT when purchasing raw materials, tools, fixed assets, and services to implement the investment project to the Investor for deduction, record:

Debit account 133 – Deductible VAT

Credit account 136 – Internal receivables (1368).

1. e) The warehouse receives the cost of service provision, financial costs, and other costs transferred by the Project Management Boards, and records:

Debit accounts 632, 635, 811,…

Credit account 136 – Internal receivables (1362, 1368).

1. g) When the project is completed and the project is handed over, the investor shall record:

– In case of receiving the handover of a settled project, the investor records the value of the project as the settled price, recording:

Debit accounts 111, 112, 152, 153, 155, 211, 213, 217,…

Debit account 133 – Deductible VAT (if any)

Credit account 136 – Internal receivables (1361)

There are accounts 331, 333,… (receive payables if any).

– In case of receiving the handover of a project that has not been settled, the investor records the project value as a provisional price. When settling, the project value must be adjusted according to the settled price, and recorded:

+ If the final price is greater than the estimated price, record:

Debit accounts 155, 211, 213, 217,…

There are related accounts.

+ If the final price is less than the estimated price, record:

Debits to related accounts

There are accounts 155, 211, 213, 217,…

 

ACCOUNT 138 – OTHER RECEIVABLES

1. Accounting principles

This account is used to reflect receivables beyond the scope reflected in Accounts 131, 133, 136 and the payment status of these receivables, including the following main contents:

– The value of missing assets but the cause is not yet determined, pending processing;

– Receivables for material compensation caused by individuals and groups (inside and outside the enterprise) such as loss or damage to materials, goods, capital, etc. that have been processed for compensation;

– Loans to other parties using non-monetary assets (if loans are made in cash, they must be accounted for as loans in Account 1283);

– Amounts spent on construction investment, production and business costs… but not approved by competent authorities must be recovered;

– Recoverable expenses, such as expenses paid by the import-export trustee on behalf of the export trustee for bank fees, customs inspection fees, transportation and loading fees, taxes, etc.

– Receivables from dividends, profits distributed in cash or non-cash assets from financial investment activities;

– Special consumption tax on imported goods (for example, imported gasoline according to tax law) has been paid, deducted or refunded according to tax law;

– Value of assets invested in business cooperation contracts;

– Other receivables other than the above.

2. Structure and content of Account 138 – Other receivables

Debit:

– Value of missing assets awaiting resolution;

– Receivables from individuals and groups (inside and outside the enterprise) for missing assets with clearly identified causes;

– The amount of special consumption tax on imported goods paid can be deducted or refunded according to the provisions of tax law;

– Value of corporate assets invested in business cooperation contracts;

– Must receive dividends and profits distributed in cash from financial investment activities;

– Third party receivables, other receivables;

– Revaluation of other receivables which are foreign currency items (in case the foreign currency exchange rate increases compared to the accounting currency).

Creditor:

– Transfer the missing asset value to related accounts according to the decision recorded in the handling minutes;

– The amount of special consumption tax on imported goods deducted or refunded according to the provisions of tax law;

– The value of assets or business benefits divided from the business cooperation contract to the related account;

– Amount collected on other receivables;

– Revaluation of other receivables which are foreign currency items (in case the foreign currency exchange rate decreases compared to the accounting currency).

Debit Balance:

Other outstanding receivables at the end of the accounting period.

Account 138 – Other receivables, has 3 sub-accounts:

– Account 1381 – Asset shortage awaiting resolution: Reflects the value of missing assets for which the cause is unknown and awaiting a resolution decision.

In principle, in all cases where a shortage of assets is detected, the enterprise must find the cause and the person at fault to take specific measures. Only account for assets with an undetermined cause of shortage, loss, or damage that are awaiting resolution in Account 1381 – Assets in short supply pending resolution. In cases where the cause of the shortage of assets has been determined and there is a record of resolution in the same period, it must be recorded in the relevant accounts and not accounted for in Account 1381 – Assets in short supply pending resolution.

In case when preparing financial statements, if there is no solid evidence that the missing assets awaiting resolution are recoverable, the enterprise must record the value of those missing assets in expenses to determine the business results of the period. At the same time, the enterprise must explain in the enterprise’s Financial Statement the value of the missing assets awaiting resolution that has been recorded in the business results of the period, the time limit in which the enterprise expects to clearly identify the cause of each type of missing assets awaiting resolution on the Financial Statement of this period, the results of handling the missing assets awaiting resolution that have been reflected in the Financial Statement of the previous period,…

– Account 1383 – Special consumption tax on imported goods: Reflects the amount of special consumption tax on imported goods (e.g. imported gasoline,…), (except for the case of special consumption tax on temporarily imported – re-exported goods that has been paid) deducted or refunded according to the provisions of tax law.

– Account 1388 – Other receivables: Reflects the enterprise’s receivables outside the scope of receivables reflected in Accounts 1381 and 1383, such as: Receivables from the enterprise’s investment activities in business cooperation contracts; Receivables from dividends and profits distributed in cash or non-cash assets; Receivables from interest; Receivables from compensation and special consumption tax on temporarily imported and re-exported goods that are not owned by the enterprise,…

3. Accounting methods for some major economic transactions

3.1. Tangible fixed assets used for production and business activities are found to be missing, the cause is not yet determined, waiting for handling, record:

Debit account 138 – Other receivables (1381) (remaining value of fixed assets)

Debit account 214 – Depreciation of fixed assets (depreciation value)

Credit account 211 – Tangible fixed assets (original price).

3.2. Tangible fixed assets used for welfare activities are found to be missing, the cause is not clearly determined, waiting for handling, reduce fixed assets, record:

Debit account 214 – Depreciation of fixed assets (depreciation value)

Debit account 3533 – Welfare fund has formed fixed assets (remaining value) (Fixed assets used for welfare activities)

Credit account 211 – Tangible fixed assets (original price).

At the same time, reflect the remaining value of the missing assets awaiting settlement, record:

Debit account 138 – Other receivables (1381)

Credit account 353 – Reward and welfare fund (3532).

3.3. For cash in hand, materials, goods,… found to be missing during inventory:

In all cases where cash, materials, goods, etc. in the fund, warehouse or at the management or storage place are found to be missing during inventory, a record must be made and the cause must be investigated and the offender identified. Based on the inventory record and the handling decision of the competent authority, the following accounting entries must be made:

1. a) In case of discovered missing assets, the cause is immediately determined:

– If there is a mistake or no recording, it is necessary to make additional entries or adjust the data in the accounting books;

– If the value of materials and goods lost is within the standard range, record:

Debit account 632 – Cost of goods sold

There are accounts 152, 153, 155, 156.

– If it is determined that someone is responsible, based on the cause or the person responsible for compensation, record:

Debit account 138 – Other receivables (1388) (amount to be compensated)

Debit account 334 – Payable to employees (compensation amount deducted from salary)

Debit account 632 – Cost of goods sold (value of loss or damage of inventory after deducting compensation collected according to the handling decision)

There are accounts 111, 112, 152, 153, 155, 156,…

1. b) If the loss or damage has not been clearly identified and is pending processing, based on the loss value, record:

Debit account 138 – Other receivables (1381)

There are accounts 111, 152, 153, 155, 156,…

– When there is a decision to handle, based on the decision, record:

Debit accounts 111, 112 (if the offender pays compensation)

Debit account 138 – Other receivables (1388) (if compensation must be collected from the offender)

Debit account 334 – Payable to employees (if deducted from the salary of the offender)

Debit account 632 – Cost of goods sold (loss and damage value of inventory after deducting compensation amount according to handling decision)

Debit account 811 – Other expenses (Cash, remaining value of fixed assets missing from inventory must be included in other expenses of the enterprise)

Credit account 138 – Other receivables (1381).

3.4. Loans of non-monetary assets, record:

Debit account 138 – Other receivables (1388)

There are accounts 152, 153, 155, 156,…

3.5. Third party payments that must be recovered, other receivables, record:

Debit account 138 – Other receivables (1388)

There are related accounts.

3.6. Accounting for import-export entrustment transactions at the consignee:

1. a) When the trustee pays on behalf of the trustor, record:

Debit account 138 – Other receivables (1388) (if the entrusting party has not advanced money)

Debit account 3388 – Other payables (deducted from money received from the entrusting party)

There are accounts 111, 112,…

1. b) When the export entrusting enterprise offsets the amounts paid on its behalf, the export entrusting enterprise records:

Debit account 338 – Other payables (3388)

Credit account 138 – Other receivables (1388).

1. c) Detailed accounting of import-export payment transactions is performed according to the instructions of Account 338 – Other payables; Accounting of VAT on imported goods, special consumption tax, import tax at the consignor and consignee is performed according to the instructions of Account 333 – Taxes and amounts payable to the State.

3.7. Reflecting dividends and profits distributed in cash or non-cash assets from financial investment activities, record:

Debit account 138 – Other receivables (1388)

Credit account 515 – Financial activity revenue.

3.8. When collecting money from other receivables, record:

Debit accounts 111, 112

Credit account 138 – Other receivables (1388).

3.9. Based on the decision to handle other receivables, record:

Debit accounts 111, 112 (if compensation is collected in cash)

Debit account 334 – Payable to employees (if compensation is deducted from salary)

Debit account 229 – Provision for asset losses (2293) (if offset by provision for doubtful debts)

Debit account 642 – Business management costs (if included in expenses)

Credit account 138 – Other receivables (1388).

The reversal of provisions made for doubtful debts may be recorded immediately for each transaction at the time of processing other receivables or when determining the amount of provisions for doubtful debts at the end of each accounting period but must be consistent with the provisions of Vietnamese accounting standards.

3.10. When enterprises complete the procedures for selling other receivables (currently reflected on the Financial Position Statement) to debt trading companies, record:

Debit accounts 111, 112,… (amounts received from selling receivables)

Debit account 229 – Provision for asset losses (2293) (the difference is offset by the provision for bad debts)

Debit related accounts (the difference between the original price of the receivable and the amount received from selling the debt and the amount offset by the provision for bad debts)

Credit account 138 – Other receivables (1388) (recorded value of other receivables).

The reversal of provisions for doubtful debts may be recorded immediately for each transaction at the time of sale of other receivables or when determining the amount of provisions for doubtful debts at the end of each accounting period but must be consistent with the provisions of Vietnamese accounting standards.

3.11. Expenditures for construction investment and production and business expenses that are not approved by competent authorities must be recovered and recorded:

Debit account 138 – Other receivables (1388)

There are accounts 241, 641, 642,….

3.12. Accounting for special consumption tax on imported goods

– For the amount of special consumption tax payable at the import stage of goods that will be deducted or refunded according to the provisions of tax law, enterprises shall base on the import purchase invoice and tax payment notice of the competent authority to determine the amount of special consumption tax payable on imported goods, and record:

Debit account 1383 – Special consumption tax of imported goods

Credit account 3332 – Special consumption tax.

– When paying special consumption tax on imported goods, based on related documents, record:

Debit account 3332 – Special consumption tax

There are accounts 111, 112,….

– During the period, reflect the amount of special consumption tax on imported goods (for example, bio-fuel) paid at the import stage deducted from the amount of special consumption tax payable at the sales stage, record:

Debit account 3332 – Special consumption tax (deductible portion)

Debit account 632 – Cost of goods sold {the difference between the deductible special consumption tax paid at the import stage is greater than the special consumption tax of imported goods payable at the sales stage (except for goods for which special consumption tax is refunded at the import stage, such as bio-fuel)}

Credit account 1383 – Special consumption tax of imported goods (special consumption tax deducted in the period for imported goods).

– In case during the period, the amount of special consumption tax on imported goods paid at the import stage is less than the amount of special consumption tax payable at the sales stage, the enterprise must pay the difference to the State budget, recording:

Debit account 3332 – Special consumption tax

There are accounts 111, 112

– In case the enterprise is refunded the special consumption tax of the item (for example, bio-fuel) paid at the import stage, record:

Debit accounts 111, 112,….

There is account 1383 – Special consumption tax of imported goods.

 

ACCOUNT 141 – ADVANCES

1. Accounting principles
2. a) This account is used to reflect the advances of the enterprise to the enterprise’s employees and the payment status of those advances.
3. b) Enterprises are responsible for developing regulations and organizing internal controls related to advances in accordance with relevant laws and internal management requirements, such as: objects eligible for advances; value, purpose, form, and duration of advances; authority to approve advances, etc.
4. c) Upon completion and conclusion of the assigned work, the advance recipient shall, based on the advance amount and the amount approved by the competent authority, prepare an advance payment table (with original documents). In case the advance payment is not fully used compared to the approved amount, the advance recipient shall be responsible and obligated to repay the enterprise according to the enterprise’s regulations. In case the approved advance payment value is greater than the advance received amount, the enterprise shall be responsible for paying the remaining amount to the advance recipient.
5. d) Enterprises must open detailed accounting books to track each advance recipient and fully record the receipt and payment of advances for each advance.
6. Structure and content of Account 141 – Advances

Debit:

Money and materials advanced to employees of the enterprise.

Creditor:

– Advances have been paid;

– The amount advanced but not used up will be returned to the fund or deducted from salary;

– Materials that have been advanced but not fully used are returned to the warehouse.

Debit Balance:

The amount of advances remaining at the end of the accounting period that have not been paid.

3. Accounting methods for some major economic transactions

3.1. When advancing money or materials to employees in the enterprise, based on relevant documents, record:

Debit account 141 – Advances

There are accounts 111, 112, 152,…

3.2. Upon completion of the assigned work, the advance recipient shall prepare an Advance Payment Table with the original approved documents to settle the advance payment, recording:

Debit accounts 152, 153, 156, 241, 331, 621, 623, 627, 642,…

Credit account 141 – Advances.

3.3. Based on the enterprise’s decision to handle unused advances, record:

Debit accounts 111, 112, 152, 334,…

Credit account 141 – Advances.

3.4. In case the approved actual payment is greater than the advance received, the enterprise shall make additional payment to the advance recipient, recording:

Debit accounts 152, 153, 156, 241, 621, 622, 627,…

There are accounts 111 and 112.

 

PRINCIPLES OF INVENTORY ACCOUNTING

1. The inventory account group is used to reflect the current value and inventory fluctuations of the enterprise (including cases where the value of goods sold is calculated each time it occurs or is calculated based on the inventory value at the end of the period).
2. An enterprise’s inventories are assets purchased for production or sale during the normal production and business period, including:

– Purchased goods are on the way;

– Raw materials;

– Tools, instruments;

– Unfinished products;

– Products (finished and semi-finished products);

– Goods;

– Goods sent for sale;

– Raw materials and supplies at the enterprise’s bonded warehouse.

For materials, equipment, and spare parts with a storage period of more than 12 months or more than a normal production or business cycle; unfinished products with a production or circulation period exceeding a normal production or business cycle are not presented as inventory on the Financial Statement but are presented as long-term assets.

3. Products, goods, materials, assets kept on behalf of others, consigned, entrusted for import and export, processed… that are not owned and controlled by the enterprise are not reflected as the enterprise’s inventory. Instead, a detailed book must be opened to track products, goods, materials, assets kept on behalf of others, consigned, entrusted for import and export, processed… and explained in the Financial Statements.
4. Inventory accounting (determining the original cost of inventory, determining the net realizable value, setting up provisions for inventory devaluation and recording costs related to inventory,…) must be performed according to the provisions of Vietnamese Accounting Standard No. 02 – Inventories.
5. The principles for determining inventory value are specifically prescribed for each inventory item, according to the source of formation and the time of calculating inventory value.
6. Taxes and fees (such as: non-deductible input VAT of inventories, special consumption tax, import tax, environmental protection tax, resource tax, etc.) payable when purchasing, exploiting, and producing inventories that are not refundable according to tax law provisions shall be included in the value of inventories.
7. When purchasing inventory, if additional products or goods are received, the enterprise must determine and record the products or goods separately at their fair value (market value of the assets received, value of similar assets, etc.), except in cases where the enterprise does not separate these additional products or goods for use, giving, presenting, donating or selling.
8. In case of exporting inventory for promotion or advertising, based on the nature of the transaction, account for it according to the following principles:
9. a) In case of releasing inventory for promotion or advertising without collecting money, without other conditions such as having to buy products, goods… or the nature of the business model, characteristics of products, goods, services of the enterprise is that the selling price of the main product does not change regardless of whether the customer receives or does not receive the accompanying product, the enterprise records the value of inventory used for promotion or advertising in the cost of sales (details of promotional and advertising goods);
10. b) In case of releasing inventory for promotion or advertising but customers can only receive promotional or advertising goods with other conditions such as having to buy products or goods (for example, buy 2 products and get 1 product free…), the enterprise must allocate the amount of money or benefits earned to calculate revenue for both the goods sold and the promotional goods. Accordingly, the value of the promotional goods is included in the cost of goods sold (in this case, the nature of the transaction is to reduce the price of goods sold).
11. When determining the value of goods sold and inventory, enterprises apply one of the following methods:
12. a) Specific cost method: This method is applied based on the actual value of each purchased material and goods and each manufactured product, so it is only applicable to businesses with few items or stable and identifiable items.
13. b) Weighted average method: According to this method, the value of each inventory item is calculated based on the average value of each inventory item at the beginning of the period and the value of each inventory item purchased or produced during the period. The average value can be calculated for each period or after each imported shipment, depending on the specific conditions of each enterprise.
14. c) First-in, first-out (FIFO) method: This method is applied based on the assumption that the value of inventory purchased or produced first is sold first, so the remaining inventory value at the end of the period is the value of inventory purchased or produced near the end of the period. According to this method, the value of goods issued is calculated according to the price of the imported goods at the beginning of the period or near the beginning of the period, the value of the inventory at the end of the period is calculated according to the price of the imported goods at the end of the period or near the end of the period.
15. d) The retail method is used in the retail industry (e.g., supermarket or similar businesses), which typically have large inventories, rapidly changing items, and many items have similar margins or cannot be priced using other methods. The cost of inventory is determined by subtracting (-) the appropriate percentage from the selling price of the inventory. The appropriate percentage used takes into account items marked down below their original selling price. Typically, each retail division will use its own average percentage.
16. d) The standard cost method (which can be applied to manufacturing enterprises) is calculated based on the normal usage of raw materials and tools, labor, efficiency and cost performance. These factors are regularly reviewed and, if necessary, adjusted according to current conditions.

Enterprises shall base on the characteristics, nature, quantity and type of each inventory item as well as the management requirements of the enterprise to choose the appropriate method of determining the value of the goods sold and the ending inventory of each inventory item and must apply it consistently between accounting periods, unless there is a change in accounting policy.

10. For inventories purchased in foreign currency, the purchase price must be based on the actual transaction exchange rate at the time of purchase to record the value of the inventory entered into the warehouse (except in cases where money is advanced to the seller, the inventory value corresponding to the amount of foreign currency advanced is recorded at the actual transaction exchange rate at the time of advance). Taxes related to inventories purchased in foreign currency are determined according to the tax exchange rate of tax and customs laws. Accounting for inventories purchased in foreign currency is carried out according to the instructions in Account 413 – Exchange rate differences.
11. At the end of the accounting period, if it is found that the value of inventory is not fully recovered due to damage, obsolescence, reduced selling price or increased finishing costs and selling costs, leading to the net realizable value being lower than the original price of inventory, the enterprise must set up a provision for inventory depreciation to adjust the inventory price down to the net realizable value. The setting up of a provision for inventory depreciation is carried out according to the instructions in Account 229 – Provision for asset losses.
12. Inventory accounting must simultaneously track in detail both the value and physical items for each item, type, and specification of materials and goods according to each management and usage location, and must always ensure the correct match in both value and physical items between actual data and general accounting numbers and detailed accounting numbers.
13. Enterprises shall base on the characteristics , nature, quantity, and type of each inventory item as well as management requirements and physical conditions to determine the quantity and value of goods issued from the warehouse each time they arise or calculate on the basis of the quantity and value of inventory at the end of the period accordingly and must be applied consistently between accounting periods, unless there is a change in accounting policy. In which:
14. a) In case the enterprise determines the quantity and calculates the value of exported goods for each occurrence: The enterprise regularly, continuously and systematically monitors and reflects the situation of import, export and inventory in the accounting books, so the quantity and value of inventory in the accounting books can be determined at any time during the accounting period.

At the end of the accounting period, the enterprise bases on the actual inventory data to compare and contrast with the inventory data in the accounting books. In principle, the actual inventory quantity must always be equal to the inventory quantity in the accounting books. If there is a difference, the cause must be investigated and a timely solution must be found. This method is often applied to manufacturing enterprises (industrial, construction…) and commercial enterprises trading in high-value items such as machinery, equipment, high-tech, high-quality goods…

1. b) In case the enterprise determines the quantity and value of goods exported from the warehouse based on the quantity and value of inventory at the end of the period: Based on the actual inventory results to reflect the quantity and value of inventory at the end of the period in the accounting books and from there calculate the quantity and value of inventory exported during the period according to the formula:

Quantity/Value of goods shipped during the period

=

Quantity/Value of beginning inventory

+

Total quantity/value of goods imported into warehouse during the period

–

Quantity/Value of ending inventory

– Depending on the characteristics of the inventory and the management requirements of the enterprise, inventory is conducted periodically or at the end of each accounting period to determine the actual quantity/value of inventory, thereby determining the quantity/value of inventory issued during the period (for production, sale,…).

– This method is often applied in businesses with many types of inventory with very different specifications and designs, low value, inventory used or sold regularly (retail stores…). This method has the advantage of being simple, reducing the amount of accounting work. However, the accuracy of the quantity and value of inventory used or sold is affected by the quality of management at the warehouse, counter, and yard.

 

ACCOUNT 151 – GOODS IN TRANSIT

1. Accounting principles
2. a) This account is used to reflect the current value and fluctuations of goods and supplies (raw materials, supplies; tools, equipment) purchased from outside that are owned by the enterprise but are still in transit.
3. b) Goods and materials considered to be in transit include:

– Goods and materials purchased from outside have been paid for or have been accepted for payment but are still at the seller’s warehouse, at the port, yard, bonded warehouse or are in transit;

– Goods and materials purchased from outside have arrived at the enterprise but are awaiting inspection and acceptance before entering the warehouse.

1. c) Accounting for purchased goods in transit is recorded in Account 151 according to the original cost principle prescribed in Vietnamese Accounting Standard No. 02 – Inventories.
2. d) Every day, when receiving a purchase invoice, but the goods have not been imported into the warehouse, the enterprise does not record it but compares it with the economic contract and saves the invoice in a separate file called “Goods in transit”.

During the period, if goods are imported into the warehouse, the accountant will base on the warehouse receipt and purchase invoice to record directly into Accounts 152, 153,…

1. d) If by the end of the accounting period the goods have not yet arrived, the enterprise shall base on the purchase invoice to record in Account 151 – Goods in transit. Depending on management requirements, the enterprise can track in detail the goods in transit by each item, material, each shipment, each economic contract, etc.
2. Structure and content of Account 151 – Goods in transit

Debit:

– Value of purchased goods and materials in transit;

Creditor:

– Value of goods and materials in transit that have been returned to the warehouse or transferred directly to customers;

Debit Balance:

Value of goods and materials purchased but still in transit (not yet in the enterprise’s warehouse) at the end of the accounting period.

3. Accounting methods for some major economic transactions
4. a) At the end of the accounting period, based on purchase invoices of purchased goods not yet in stock, if input VAT is deductible, record:

Debit account 151 – Goods in transit

Debit account 133 – Deductible VAT

There are accounts 111, 112, 141, 331,…

In case input VAT is not deductible, the value of purchased goods includes VAT.

1. b) In the next accounting period, when the goods are imported into the warehouse or are immediately available for production and business, based on the invoice and related documents, record:

Debit accounts 152, 153, 156, 621,…

Account 151 – Goods in transit.

1. c) In the following accounting period, if purchased goods and materials in transit are not stored in the warehouse but are delivered directly to customers according to the economic contract from the seller’s warehouse, port, yard, or sent directly to the agent or consignee, record:

Debit accounts 157, 632

Account 151 – Goods in transit.

1. d) In case of loss or damage of purchased goods in transit discovered immediately upon arrival at the warehouse or direct export for sale or consignment, based on relevant documents, the enterprise shall reflect the value of the lost or damaged inventory, recording:

Debit account 138 – Other receivables (1381, 1388)

Account 151 – Goods in transit.

 

ACCOUNT 152 – RAW MATERIALS AND INGREDIENTS

1. Accounting principles
2. a) This account is used to reflect the current value and the increase or decrease in the types of raw materials and materials in the warehouse or inventory storage locations of the enterprise (except for raw materials and materials already reflected in Account 151 – Goods in transit and Account 158 – Raw materials and supplies in bonded warehouses). Raw materials and materials of the enterprise can be purchased from outside or processed by itself for the production and business purposes of the enterprise. Depending on the production and business characteristics and management requirements of the enterprise, raw materials and materials can be classified as follows:

– Raw materials and main materials: These are the raw materials and materials that, when participating in the production process, constitute the main entity of the product. Therefore, the concept of raw materials and main materials is closely linked to each specific manufacturing enterprise. Raw materials and main materials also include semi-finished products purchased from outside for the purpose of continuing the production process and manufacturing finished products.

– Auxiliary materials: Are materials that, when participating in the production process, do not constitute the main entity of the product but can be combined with the main materials to change the color, flavor, appearance, increase the quality of the product or create conditions for the product manufacturing process to be carried out normally or serve the needs of technology, engineering, packaging preservation; serve the labor process.

– Fuel: Are things that provide heat during the production and business process, creating conditions for the product manufacturing process to take place normally. Fuel can exist in liquid, solid and gaseous forms.

– Replacement materials: Materials used to replace and repair machinery, equipment, means of transport, tools, production instruments…

– Basic construction materials and equipment: These are materials and equipment used for basic construction activities. Basic construction equipment includes equipment that requires installation, equipment that does not require installation, tools, instruments and structures used for installation in basic construction works.

1. b) Accounting for import, export, and inventory of raw materials and materials on Account 152 must be performed according to the original cost principle prescribed in Vietnamese Accounting Standard No. 02 – Inventories. The original cost of raw materials and materials is determined depending on each import source.

– Original price of raw materials and materials purchased from outside, including: Purchase price stated on invoice and non-refundable taxes according to tax law, transportation, loading, storage, classification, insurance costs,… raw materials and materials from the place of purchase to the enterprise’s warehouse, other costs directly related to the purchase of raw materials and natural loss within the norm (if any):

+ In case the VAT on imported goods is deductible, the value of purchased raw materials and supplies is reflected at the purchase price excluding VAT. If the VAT on imported goods is not deductible, the value of purchased raw materials and supplies includes VAT.

+ For raw materials and supplies purchased in foreign currency, follow the instructions in Account 413 – Exchange rate differences.

– Original price of raw materials and self-processed materials, including: Actual price of raw materials and processed materials and processing costs.

– Original price of raw materials and materials outsourced for processing, including: Actual price of raw materials and materials outsourced for processing, cost of transporting materials to the processing site and from the processing site to the enterprise, and cost of outsourcing for processing.

– The original price of raw materials contributed as capital is the value agreed upon and approved by the parties participating in the joint venture in accordance with the provisions of law.

1. c) Detailed accounting of raw materials and materials must be performed for each warehouse, each type, each group, and each item of raw materials and materials. In case the enterprise uses provisional prices to account for detailed import and export of raw materials and materials, at the end of the period the enterprise must calculate the difference coefficient between the actual price and the provisional price of raw materials and materials as the basis for calculating the actual price of raw materials and materials used in the period according to the formula:

The difference coefficient between the actual price and the provisional price of raw materials	=	Actual price of raw materials inventory at the beginning of the period	+	Actual price of raw materials imported into warehouse during the period
		Provisional price of raw materials in inventory at the beginning of the period	+	Provisional price of raw materials imported into warehouse during the period

 

Actual price of raw materials used in the period

=

Provisional price of raw materials used in the period

x

The difference coefficient between the actual price and the provisional price of raw materials

1. d) For raw materials not owned by the enterprise such as raw materials kept on behalf of others, raw materials received for processing, etc., they should not be reflected in this account but should open a detailed book to track products, goods, supplies, assets kept on behalf of others, consigned, imported and exported on behalf of others, processed, etc. and explained in the Notes to the Financial Statements.
2. Structure and content of Account 152 – Raw materials and supplies

Debit:

– Actual value of raw materials and materials imported into the warehouse due to purchase, self-production, outsourcing, processing, capital contribution or from other sources;

– Value of excess raw materials and materials discovered during inventory;

Creditor:

– Actual value of raw materials and supplies released from warehouse for use in production, business, for sale, outsourcing for processing, or contributed as capital,…;

– Value of raw materials and supplies returned to the seller or discounted from purchased goods;

– Trade discounts enjoyed after purchasing raw materials and supplies;

– Value of raw materials, lost or damaged materials discovered during inventory;

Debit Balance:

Actual value of raw materials and inventory at the end of the accounting period.

3. Accounting methods for some major economic transactions

3.1. When purchasing raw materials and supplies for storage, based on invoices, warehouse receipts and related documents reflecting the value of raw materials and supplies in storage:

Debit account 152 – Raw materials and supplies

Debit account 133 – Deductible VAT (1331) (if any)

There are accounts 111, 112, 141, 331,… (total payment amount).

3.2. Accounting for raw materials returned to sellers, trade discounts or rebates received when purchasing raw materials:

– In case of returning raw materials to the seller, record:

Debit accounts 111, 112, 331,…

Credit account 152 – Raw materials and supplies

Credit account 133 – Deductible VAT (if any).

– In case of trade discounts or rebates received after purchasing raw materials, the enterprise must base on the fluctuation of raw materials to allocate the trade discounts and rebates received based on the remaining raw materials in stock, the amount of exported materials used for product manufacturing or for construction investment activities or determined to be consumed in the period, record:

Debit accounts 111, 112, 331,…

Credit account 152 – Raw materials (if raw materials are still in stock)

There are accounts 154, 621, 623, 627 (if raw materials have been exported and used for production)

Credit account 241 – Construction in progress (if materials have been issued for construction investment activities)

Credit account 632 – Cost of goods sold (if the products made up of those materials have been determined to be consumed in the period)

There are accounts 641, 642 (raw materials used for sales activities, business management)

Credit account 133 – Deductible VAT (1331) (if any).

3.3. In case the enterprise has received the purchase invoice but the raw materials have not been imported into the warehouse, the enterprise shall keep the invoice to track the purchased goods in transit.

– If raw materials and supplies are imported into the warehouse during the period, based on the invoice and warehouse receipt, record it in Account 152 – Raw materials and supplies.

– If by the end of the period the raw materials have not arrived, based on the invoice, record:

Debit account 151 – Goods in transit

Debit account 133 – Deductible VAT (1331) (if any)

There are accounts 111, 112, 141, 331…

– In the next period, when raw materials and supplies are imported into the warehouse, based on the invoice and warehouse receipt, record:

Debit account 152 – Raw materials and supplies

Account 151 – Goods in transit.

3.4. When paying the seller, if a payment discount is enjoyed, the payment discount is recorded in financial revenue, recorded as:

Debit account 331 – Payable to sellers

Credit account 515 – Financial activity revenue.

3.5. For imported raw materials and materials:

– When importing raw materials and supplies, record:

Debit account 152 – Raw materials and supplies

Credit account 331 – Payable to sellers

Credit account 3331 – VAT payable (33312) (if input VAT of imported goods is not deductible)

Credit account 3332 – Special consumption tax (if any)

Credit account 3333 – Import and export tax (import tax details).

Credit account 33381 – Environmental protection tax (if any).

– If input VAT of imported goods is deductible, record:

Debit account 133 – Deductible VAT

Credit account 3331 – VAT payable (33312).

– In case of purchasing raw materials with a part prepaid to the seller in foreign currency, the value of raw materials corresponding to the amount of prepaid foreign currency is recorded at the actual transaction exchange rate at the time of prepayment. The value of raw materials in foreign currency not yet paid is recorded at the actual transaction exchange rate at the time of receiving raw materials.

3.6. Costs of purchasing, loading, and transporting raw materials and materials from the place of purchase to the enterprise’s warehouse, record:

Debit account 152 – Raw materials and supplies

Debit account 133 – Deductible VAT (1331) (if any)

There are accounts 111, 112, 141, 331,…

3.7. For raw materials and materials imported into the warehouse due to outsourcing of processing and manufacturing:

– When exporting raw materials and supplies for processing, record:

Debit account 154 – Cost of production and unfinished business

There is account 152 – Raw materials, materials.

– When there are costs for outsourcing processing, record:

Debit account 154 – Cost of production and unfinished business

Debit account 133 – Deductible VAT (1331) (if any)

There are accounts 111, 112, 131, 141,…

– When re-entering the warehouse of raw materials and materials outsourced for processing and finishing, record:

Debit account 152 – Raw materials and supplies

Credit account 154 – Cost of production and business in progress.

3.8. For raw materials and materials imported into the warehouse due to self-production:

– When exporting raw materials and supplies for self-processing, record:

Debit account 154 – Cost of production and unfinished business

There is account 152 – Raw materials, materials.

– When importing raw materials and homemade materials, record:

Debit account 152 – Raw materials and supplies

Credit account 154 – Cost of production and business in progress.

3.9. When exporting raw materials and materials used in production and business, record:

Debit accounts 621, 623, 627, 641, 642,…

There is account 152 – Raw materials, materials.

3.10. Exporting raw materials and materials used for basic construction investment activities or repairing, maintaining or upgrading, renovating fixed assets, record:

Debit account 241 – Construction in progress

There is account 152 – Raw materials, materials.

3.11. For raw materials and materials exported to contribute capital to subsidiaries, joint ventures, and associated companies, record:

Debit accounts 221, 222 (according to revaluation price)

Debit account 811 – Other expenses (revaluation price is less than book value)

Credit account 152 – Raw materials and supplies (according to book value)

Credit account 711 – Other income (revaluation value is greater than book value).

3.12. When exporting raw materials and supplies used to buy back capital contributions at subsidiaries, joint ventures, and associated companies, record:

– Record revenue from sale of raw materials and investments in subsidiaries, joint ventures and associates, record:

Debit accounts 221, 222 (at fair value)

Credit account 511 – Sales revenue and service provision

Credit account 3331 – Output VAT payable.

– Record the cost of raw materials used to buy back capital contributions at subsidiaries, joint ventures, and associates, record:

Debit account 632 – Cost of goods sold

There is account 152 – Raw materials, materials.

3.13. For excess or missing raw materials and supplies discovered during inventory:

Any case of surplus or shortage of raw materials in the warehouse or at the place of management and preservation discovered during the inventory must be recorded and the cause must be investigated and the offender identified. Based on the inventory record and the handling decision of the competent authority, the following accounting entries must be made:

1. a) In case of discovered surplus or shortage of assets, the cause must be immediately determined:

– If there is a mistake or the number has not been recorded, the enterprise must make additional entries or adjust the data in the accounting books;

– If the shortage is due to the loss of raw materials and materials within the standard range, record:

Debit account 632 – Cost of goods sold

There is account 152 – Raw materials, materials.

– If it is determined that someone is responsible, based on the cause or the person responsible for compensation, record:

Debit account 138 – Other receivables (1388) (amount to be compensated)

Debit account 334 – Payable to employees (compensation amount deducted from salary)

Debit account 632 – Cost of goods sold (value of loss or damage of inventory after deducting compensation collected is included in cost of goods sold according to the handling decision)

Credit account 152 – Raw materials and supplies

1. b) If the cause of excess or shortage of raw materials is unknown, it must wait for processing:

– If raw materials are missing, record:

Debit account 138 – Other receivables (1381)

There is account 152 – Raw materials, materials.

+ When there is a decision to handle, based on the decision, record:

Debit accounts 111, 112,… (if the offender pays compensation)

Debit account 138 – Other receivables (1388) (if compensation must be collected from the offender)

Debit account 334 – Payable to employees (if deducted from the salary of the offender)

Debit account 632 – Cost of goods sold (if the remaining value of loss or damage to raw materials and supplies is included in the cost of goods sold)

Credit account 138 – Other receivables (1381).

+ In case the missing assets awaiting settlement are considered and decided by the owner or the owner’s representative agency to be recorded in the business results according to regulations, based on the value of lost raw materials and materials, record:

Debit account 632 – Cost of goods sold

Credit account 138-Other receivables (1381)

– If there are excess raw materials and materials waiting to be resolved, record:

Debit account 152 – Raw materials and supplies

Credit account 338 – Other payables (3381).

+ When there is a decision to handle, based on the decision, record:

Debit account 338 – Other payables (3381)

There are related accounts.

1. c) When liquidating or selling raw materials and scrap:

– Reflecting cost price, record:

Debit account 632 – Cost of goods sold

There is account 152 – Raw materials, materials.

– Reflecting revenue from selling raw materials and scrap, record:

Debit accounts 111, 112, 131

Credit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and amounts payable to the State (if any).

 

ACCOUNT 153 – TOOLS AND UTENSILS

1. Accounting principles
2. a) This account is used to reflect the current value and the increase and decrease of the enterprise’s tools and equipment. Tools and equipment are labor materials that do not meet the prescribed standards on value and usage time for fixed assets. Therefore, tools and equipment are managed and accounted for as raw materials and materials. According to current regulations, the following labor materials, if not meeting the standards for recording fixed assets, are recorded as tools and equipment:

– Scaffolding, formwork, tools, and specialized jigs for construction production;

– Equipment, spare parts; packaging sold with goods are charged separately, but during the process of preserving goods on the road and storing in warehouses, depreciation is calculated to gradually deduct from the value of the packaging;

– Tools and utensils made of glass, ceramic, porcelain;

– Management tools, office supplies;

– Clothing and footwear specifically designed for work;…

1. b) Accounting for imported, exported, and stocked tools and equipment in Account 153 is reflected at original cost. The principle for determining the original cost of imported tools and equipment is similar to the instructions in Account 152 – Raw materials and supplies.
2. c) Detailed accounting of tools and equipment must be performed for each warehouse, each type, each group, and each item of tool and equipment. Tools and equipment used for production, business, and rental must be tracked in both physical and value terms in detailed accounting books according to the place of use, the rental object, and the person responsible for the material. For valuable and rare tools and equipment, special preservation methods are required.
3. d) For tools and equipment of small value when used for production and business, the entire amount can be recorded at once in production and business expenses.
4. d) In case of tools, equipment, circulating packaging, rental equipment for export use or rental related to production and business activities in For many periods , it is recorded in Account 242 – Pending allocation costs and gradually allocated to production and business costs.
5. e) Tools and instruments related to foreign currency transactions are carried out according to the instructions in Account 413 – Exchange rate differences.
6. Structure and content of Account 153 – Tools and instruments

Debit:

– Actual value of tools and equipment in stock due to purchase, self-made, outsourcing, receiving capital contribution,…;

– Value of rental tools and equipment returned to warehouse;

– Actual value of surplus tools and equipment discovered during inventory;

Creditor:

– Actual value of tools and equipment released from warehouse for use in production, business, rental or capital contribution,…;

– Trade discounts after purchasing tools and equipment;

– Value of tools and equipment returned to the seller or discounted by the seller;

– Value of missing tools and equipment discovered during inventory;

Debit Balance :

Actual value of tools and equipment in inventory at the end of the accounting period maths.

Enterprises can open additional detailed accounts for tools and equipment (such as: equipment, spare parts, circulating packaging, rental items, etc.) to suit the characteristics of production and business activities and management requirements of their unit.

3. Accounting methods for some major economic transactions
4. a) Purchase tools and equipment into the warehouse, based on invoices, warehouse receipts and related documents, record:

Debit account 153 – Tools and equipment

Debit account 133 – Deductible VAT (1331) (if any)

There are accounts 111, 112, 141, 331,…

1. b) In case of trade discounts or rebates received after purchasing tools and equipment, the enterprise must base on the fluctuations of tools and equipment to allocate the trade discounts and sales discounts received to the remaining tools and equipment in stock or the number issued for use in production and business activities, and record:

Debit accounts 111, 112, 331,…

Credit account 153 – Tools and equipment (if tools and equipment are still in stock)

Credit account 154 – Unfinished production and business expenses (if tools and equipment have been issued for production and business purposes)

There are accounts 641, 642 (if tools and equipment have been issued for use in production activities) sales, business management)

Credit account 242 – Expenses awaiting allocation (if gradually allocated)

Credit account 632 – Cost of goods sold (if the products made up of those tools and equipment have been determined to be consumed in the period)

Credit account 133 – Deductible VAT (1331) (if any).

1. c) Return purchased tools and equipment to the seller, record:

Debit account 331 – Payable to sellers

Credit account 153 – Tools and supplies (value of returned tools and supplies)

Credit account 133 – Deductible VAT (if any) (input VAT of tools and equipment returned to the seller).

1. d) Reflect the payment discount received (if any) deducted from the debt payable to the seller, record:

Debit account 331 – Payable to sellers

Credit account 515 – Financial activity revenue .

1. d) Export of tools and equipment used for production and business:

– If the value of tools, equipment, circulating packaging, rental equipment is related to an accounting period or the tools and equipment have small value when used for production and business, they can be recorded in full at once as production and business expenses, record:

Debit accounts 623, 627, 641, 642

There is account 153 – Tools and equipment.

– If the value of tools, equipment, circulating packaging, and rental items is related to many accounting periods, it is allocated Gradually enter into the periodic production and business costs, record:

+ When exporting tools, equipment, circulating packaging, and rental items, record:

Debit account 242 – Expenses awaiting allocation

There is account 153 – Tools and equipment.

+ When allocating to production and business costs for each accounting period, record:

Debit accounts 623, 627, 641, 642,…

Credit account 242 – Expenses awaiting allocation.

– Record revenue from tool and equipment rental, record:

Debit accounts 111, 112, 131,…

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (33311).

– Receive back the rented tools and equipment, record:

Debit account 153 – Tools and equipment

Credit account 242 – Awaiting allocation costs ( remaining value of fixed assets not yet allocated to costs),

1. e) For imported tools and equipment:

– When importing tools and equipment, record:

Debit account 153 – Tools and equipment

Credit account 331 – Payable to sellers

Credit account 3331 – VAT payable (33312) (if input VAT of imported goods is not deductible)

Credit account 3332 – Special consumption tax (if any)

Credit account 3333 – Import and export tax (import tax details)

Credit account 33381 – Environmental protection tax (if any).

– If input VAT of imported goods is deductible, record:

Debit account 133 – Deductible VAT

Credit account 3331 – VAT payable (33312).

part prepaid to the seller in foreign currency, the value of the tools and equipment corresponding to the amount of prepaid foreign currency is recorded at the actual transaction exchange rate at the time of advance payment. The value of the tools and equipment in foreign currency not yet paid is recorded at the actual transaction exchange rate at the time of receiving the tools and equipment.

damaged tools and equipment , the accountant shall handle them similarly to raw materials and supplies (see Account 152 – Raw materials and supplies).

1. h) When liquidating or selling tools and equipment:

– Reflecting cost price, record:

Debit account 632 – Cost of goods sold

There is account 153 – Tools and equipment.

– Reflecting revenue from selling tools and equipment, record:

Debit account 111, 112, 131

Credit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and amounts payable to the State.

 

ACCOUNT 154 – COSTS OF PRODUCTION AND WORK IN PROGRESS

1. Accounting principles
2. a) This account is used to reflect the total production and business costs used to calculate the cost of products and services in the enterprise.

Unfinished production and business costs reflects unfinished production and business costs at the beginning of the period, arising during the period and unfinished at the end of the period; production and business costs of the volume of products and services completed during the period of main and secondary production and business activities and outsourcing processing at manufacturing enterprises or service enterprises.

1. c) Depending on the characteristics of production and business activities and the management requirements of the enterprise, production and business costs accounted for in Account 154 can be detailed by location where costs arise (workshop, production department, production team, construction site, etc.); by type, product group or product detail or part; by each type of service or each service stage, etc.
2. d) Production and business costs reflected in Account 154 include the following costs:

– Cost of raw materials and direct materials for production, manufacturing, processing, and service provision;

– Direct labor costs for production, product manufacturing, processing, manufacturing, and service provision;

– Cost of using construction machinery (for construction activities);

– General production costs directly serve the production, manufacturing of products, processing, manufacturing, and service provision;

1. d) At the end of the period, allocate and transfer fixed general manufacturing costs to processing costs for each product unit according to the normal capacity level. In case the actual product output is lower than the normal capacity level, the enterprise must calculate and determine the fixed general manufacturing costs allocated to processing costs for each product unit according to the normal capacity level. The fixed general manufacturing costs that are not allocated (not included in product cost) are recorded in the cost of goods sold in the period. Variable general manufacturing costs are allocated entirely to processing costs for each product unit according to the actual costs incurred.
2. e) Do not record the following expenses in Account 154:

– Selling expenses;

Business management costs ;

– Financial costs;

– Other expenses;

– Corporate income tax expense;

– Basic construction investment expenses;

– Expenses covered by other sources.

2. Accounting method of Account 154 in industry
3. a) Account 154 – Cost of production and unfinished business applied in the industrial sector is used to collect production costs and calculate product cost according to workshops or production and manufacturing departments. For manufacturing enterprises that outsource processing, manufacturing, provide labor and services to outside parties or serve the production of products, the costs of these activities are also collected in Account 154.

management requirements of the enterprise, Account 154 in industrial manufacturing enterprises can be accounted for in detail by location of cost generation (workshop, production department) or by type, product group, product, or product department details,…

3. Accounting method for Account 154 in the service industry
4. a) Account 154 – Production and business costs in progress are applied in service businesses (transportation, post, tourism, services, etc.) to collect production costs and calculate the cost of services performed. Depending on the management requirements of the business, this account can be accounted for in detail by service business lines such as transportation, tourism, etc. or by location of cost occurrence or detailed by each service, etc.
5. b) For the transport sector:

– This account is used to collect costs and calculate the cost of transportation services, which can be detailed by industry such as road transport, rail transport, waterways, air transport, pipeline transport,… or by activity (passenger transport, freight transport,…) or by service business department,…

– In the process of providing transportation services, replacement tires are often used for many periods, so the entire value of the tires is not calculated into the transportation service cost at once when used, but can be gradually allocated over many periods.

1. c) For tourism business activities

This account is used to collect costs and calculate the cost of tourism services. Depending on the management requirements of the business, it can be opened in detail for each type of activity such as: Tour guide, tourism transportation business,…

1. d) For hotel business activities

This account is used to collect costs and calculate the cost of hotel services. Depending on the management requirements of the business, it can be opened in detail for each type of service such as: Food and beverage activities, room service, entertainment services, other services (laundry, ironing, haircut, telegram, sports,…).

4. Accounting method for Account 154 in the construction industry
5. a) Account 154 – Cost of production and unfinished business is applied in construction and installation enterprises to collect production costs and calculate the cost price of completed construction and installation products . Depending on the management requirements of the enterprise, this account can be accounted for in detail for each construction and installation activity such as industrial construction and installation, civil construction and installation…, or in detail for each construction and installation product…
6. b) The collection of production costs and calculation of construction product prices must be detailed for each project, project item, cost item (raw materials, direct materials, direct labor, use of construction machinery, general production costs…), according to current regulations of law on investment and construction management.
7. c) Real estate construction investors use this account to collect construction costs of finished real estate products . In case the real estate is used for multiple purposes (as an office, for rent or for sale, for example, a mixed-use apartment building), the following principles apply :

– If there is sufficient basis to separately account for or determine the proportion of the cost of constructing real estate for sale (finished real estate products ) and the cost of constructing real estate for lease or office use (fixed assets or investment real estate), only the cost of constructing finished real estate products is accounted for in Account 154, and the cost of constructing fixed assets or investment real estate is accounted for in Account 241 – Construction in progress.

– In case of not accounting separately or determining the proportion of construction costs for finished real estate components, fixed assets or investment real estate, the enterprise shall collect all costs incurred directly related to the investment in construction of assets into Account 241 – Unfinished basic construction. When the construction or project is completed and handed over for use, the enterprise shall base on the actual method of using the assets to transfer the construction investment costs in accordance with the nature of each type of asset.

5. Structure and content of Account 154 – Cost of unfinished production and business

Debit side :

– Carry over costs of raw materials, direct materials, direct labor costs, costs of using construction machinery, and general production costs incurred during the period related to product manufacturing and service performance;

– Value of raw materials, materials exported for outsourcing processing, cost of transporting materials to processing site, cost of outsourcing processing;

– Costs of raw materials, direct materials, direct labor costs, costs of using construction machinery, and general production costs incurred during the period related to construction products;

Creditor:

– Actual production cost of finished products, manufactured and put into warehouse or transferred directly for sale, internal consumption, immediate use for construction and development activities,…

– Value of raw materials, materials, processed goods returned to warehouse or used immediately for activities;

– Actual cost of completed service volume provided to customers;

– Production cost of completed construction products partially or fully delivered, consumed during the period or awaiting consumption; or delivered to the main construction contractor…;

– Value of recovered scrap, value of damaged products that cannot be repaired.

Debit Balance:

Production and business costs remaining unfinished at the end of the accounting period.

Enterprises can open additional detailed accounts for unfinished production and business costs to suit the characteristics of their production and business activities and management requirements.

6. Accounting methods for some major economic transactions in the industry
7. a) At the end of the period, transfer the cost of raw materials and direct materials to each cost aggregation object, record:

Debit account 154 – Cost of production and unfinished business

Debit account 632 – Cost of goods sold (material cost above normal level)

Credit account 621 – Direct material and raw material costs.

1. b) At the end of the period, transfer direct labor costs to each cost aggregation object, record:

Debit account 154 – Cost of production and unfinished business

Debit account 632 – Cost of goods sold (direct labor costs above average) often)

Credit account 622 – Direct labor costs.

1. c) In case the actual output level is higher than or equal to normal capacity, at the end of the period, the enterprise must calculate, allocate and transfer all general production costs (variable general production costs and fixed general production costs) to each cost aggregation object, recording:

Debit account 154 – Cost of production and unfinished business

Credit account 627 – General manufacturing costs.

1. d) In case the actual output level is lower than the average capacity Normally, enterprises must calculate and determine fixed general production costs allocated to processing costs for each product unit according to normal capacity to calculate into product cost. Fixed general production costs not calculated into product cost according to regulations are recorded in cost of goods sold in the period, recorded as follows:

Debit account 154 – Cost of production and unfinished business

Debit account 632 – Cost of goods sold (fixed general manufacturing costs not included) allocated to product cost)

Credit account 627 – General manufacturing costs.

1. d) In case after exporting raw materials to put into production, if the enterprise receives a trade discount or price reduction related to those raw materials , the enterprise shall record a reduction in unfinished production and business costs for the trade discount or price reduction corresponding to the amount of raw materials exported to produce unfinished products , recording:

In debt the Account 111, 112, 331,…

Credit account 154 – Cost of production and unfinished business (trade discounts and rebates received corresponding to the amount of exported raw materials used to produce unfinished products)

Credit account 133 – Deductible VAT (1331) (if any) .

1. e) Value of raw materials and supplies exported for outsourcing and imported back into the warehouse, record:

Debit account 152 – Raw materials and supplies

Credit account 154 – Cost of production and business in progress.

1. g) Value of damaged products that cannot be repaired, the person causing the damage must compensate, record:

In debt Account 138 – Other receivables (1388)

Debit account 334 – Payable to employees

Credit account 154 – Cost of production and business in progress.

1. h) Actual cost of products imported into warehouse during the period, record:

Debit account 155 – Products

Credit account 154 – Cost of production and business in progress.

1. i) In case the product is finished and not stored in the warehouse but transferred directly to the buyer (electricity, water products…), record:

Debit account 632 – Cost of goods sold

Credit account 154 – Cost of production and business in progress .

1. k) In case the manufactured products are used for internal consumption immediately or continue to be exported for construction activities without being put into the warehouse, record:

Debit account 241, 641, 642,…

Credit account 154 – Cost of production and business in progress.

7. Accounting methods for some major economic transactions in the industry service business

The method of accounting for some major economic transactions on Account 154 in enterprises in the service industry is similar to that of the Industrial industry. In addition, it is necessary to note:

1. a) Transaction of transferring actual cost of completed service volume, transferred to buyer and determined as sold during the period, record:

Debit account 632 – Cost of goods sold

Credit account 154 – Cost of production and business in progress.

1. b) When using internal consumption services, record:

Debit account 641, 642

Credit account 154 – Cost of production and business in progress

Credit account 3331 – VAT payable (if any).

8. Accounting methods for some major economic transactions in the construction industry

8.1. Method of accounting for construction and installation cost aggregation:

1. a) For direct material and raw material costs:

– Direct material and raw material costs include: Actual value of main materials, auxiliary materials, components or separate parts, circulating materials participating in constituting the construction and installation product entity or helping to implement and complete the construction and installation volume (excluding auxiliary materials for machinery, construction means and materials included in general costs).

– In terms of accounting principles, raw materials and materials used for construction of a project/project item must be calculated directly for that project/project item based on original documents according to the actual quantity used and according to the actual price of raw materials and materials issued from the warehouse.

– At the end of the accounting period or when the project/construction item is completed, conduct an inventory of the remaining raw materials and materials at the production site (if any) to record a deduction for the cost of raw materials and materials directly used for that project/construction item.

– In case the enterprise cannot determine the cost of raw materials and direct materials for each project or project item, it can apply the method of allocating raw materials and materials to the user according to appropriate criteria. The enterprise must explain in detail the criteria for allocating raw materials and materials on the Financial Report. Based on the Material Allocation Table for each construction, construction items, record:

Debit account 154 – Cost of production and unfinished business (material cost)

Debit account 632 – Cost of goods sold (direct material costs above normal level)

Credit account 621 – Direct material and raw material costs.

1. b) For direct labor costs, businesses account similarly to the industrial sector.
2. c) For costs of using construction machinery:

– Costs of using construction machinery include: Costs for construction machinery to perform construction work by machine. Construction machinery is the type of machine that directly serves the construction and installation of works. These are machines that move by steam, diesel, gasoline, electricity, etc. (including machines that serve construction and installation). Costs of using construction machinery can be classified into regular costs and temporary costs. In which:

+ Regular costs for construction machine operation, including: Labor costs for machine operation, machine service,…; Material costs; Tools and equipment costs; Fixed asset depreciation costs; Outsourced service costs (minor repair costs, electricity, water, vehicle and machine insurance,…); Other cash costs.

+ Temporary costs for construction machine operations, including: Repair and maintenance costs for construction machines (overhaul, renovation ,…) that are not eligible to be recorded as an increase in the original cost of construction machines; Temporary construction costs for construction machines (tents, sheds, platforms, machine tracks,…). In case temporary costs of construction machines arise in advance and are related to many periods, when they arise, they will be recorded in the Debit side of Account 242 – Expenses awaiting allocation, then gradually allocated to the Debit side of Account 623 – Construction machine usage costs.

– The collection of costs and calculation of cost of using construction machinery must be accounted for separately for each construction machine (see instructions in section Account 623 – Cost of using construction machinery).

– Based on the Table of cost allocation for construction machinery usage (actual cost of machine shift) calculated for each project and construction item, record:

Debit account 154 – Cost of production and unfinished business

Debit account 632 – Cost of goods sold (cost of using construction machinery above normal level)

Credit account 623 – Construction machinery usage costs.

1. d) For general production costs:

– General production costs reflect the production costs of the team and construction site, including: Salaries of workshop, team, and construction team managers; Deductions for social insurance, health insurance, and union fees are calculated according to the prescribed rate on the salary payable to direct construction workers, employees using construction machines, and workshop, team, and group managers; Depreciation of fixed assets used for team activities and other costs related to team activities, … When these costs arise during the period, record:

Debit account 627 – General production costs

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 152, 153, 214, 242, 334, 338,…

– At the end of the accounting period, based on the General Production Cost Allocation Table, allocate and transfer general production costs to related projects and project items according to appropriate allocation criteria, record:

Debit account 154 – Cost of production and unfinished business

Debit account 632 – Cost of goods sold (part of fixed general manufacturing costs not allocated to construction cost)

Credit account 627 – General manufacturing costs.

8.2. Method of accounting and transferring construction costs:

1. a) Contract costs that have been paid but cannot be recovered (for example: not legally enforceable such as there is doubt about its validity or the contract in which the customer cannot perform his/her obligations…) must be immediately recorded as costs in the period, recorded:

Debit account 632 – Cost of goods sold

Credit account 154 – Cost of production and business in progress.

1. b) Costs directly related to each contract may be reduced if there are other revenues not included in the contract revenue. For example: Revenues from the sale of raw materials, surplus materials and liquidation of construction machinery and equipment at the end of the construction contract:

– Enter raw materials and excess materials into the warehouse at the end of the construction contract, record:

Debit account 152 – Raw materials and supplies (at original price)

Credit account 154 – Cost of production and business in progress.

– Recovered scrap imported into warehouse, record:

Debit account 152 – Raw materials (at recoverable price)

Credit account 154 – Cost of production and business in progress.

– In case excess materials and recovered scrap are not put into the warehouse but sold immediately, the enterprise reflects the revenue, sells excess materials, and reduces expenses:

Debit account 111, 112, 131,…

Credit account 3331 – VAT payable (33311)

Credit account 154 – Cost of production and business in progress.

– Accounting for liquidation of specialized construction machinery and equipment for a construction contract and this fixed asset has been fully depreciated at original price upon termination of the construction contract:

+ Reflecting revenue from liquidation of construction machinery and equipment, record:

Debit accounts 111, 112, 131,…

Credit account 3331 – VAT payable (33311)

Credit account 154 – Cost of production and business in progress.

+ Reflecting the cost of liquidating machinery and equipment (if any ), record:

Debit account 154 – Cost of production and unfinished business

Debit account 133 – Deductible VAT ( 1331)

There are accounts 111, 112,…

+ Record a decrease in fully depreciated fixed assets such as liquidated specialized construction machinery and equipment, record:

Debit account 214 – Depreciation of fixed assets

There is account 211 – Tangible fixed assets.

1. c) At the end of the accounting period, based on the actual production cost of completed construction products determined as sold (partially or completely handed over); or handed over to the main contractor:

– In case construction products are sold or handed over to the main contractor, record:

Debit account 632 – Cost of goods sold

Credit account 154 – Cost of production and business in progress.

– In case of completed construction products awaiting sale (building houses for sale,…) or completed construction products but not yet delivered to customers, based on the cost of completed construction products, record:

Debit account 155 – Products

Credit account 154 – Cost of production and business in progress.

– When an enterprise estimates or determines the amount of provisions payable for construction warranty costs according to the level prescribed by the law on construction based on the construction service revenue performed during the period, record:

Debit account 641 – Sales expenses

Credit account 352 – Provision for payables (3522).

 

ACCOUNT 155 – PRODUCTS

1. Accounting principles
2. a) This account is used to reflect the current value and fluctuations of the enterprise’s products. Products include finished products and semi-finished products. Finished products are products that have completed the processing process by the enterprise’s production departments or outsourced for processing, have been tested to meet technical standards and are stored in the warehouse; Semi-finished products are products that have only completed one or several stages (except the final stage) of the production process.

In product export entrustment transactions, this account is only used by the entrusting party, not by the consignee (the party holding the goods on behalf).

1. b) Products produced by the main and subsidiary production units of the enterprise must be valued at production cost (original price), including: Cost of raw materials, direct materials, direct labor costs, general production costs and other costs directly related to product production. In which:

– Variable general manufacturing costs are fully allocated to processing costs for each product unit according to actual costs incurred during the period.

– For fixed general manufacturing costs allocated to processing costs for each product unit based on the normal capacity of production machinery and equipment. Normal capacity is the average quantity of products achieved under normal production conditions.

+ In case the actual output level is higher than the normal capacity, the fixed general production cost is allocated to each product unit according to the actual cost incurred.

+ In case the actual output level is lower than the normal capacity level, the fixed general production costs are only allocated to the processing costs for each product unit according to the normal capacity level. The unallocated general production costs are recorded in the cost of goods sold to determine the business results of the period.

1. c) The following costs are not included in the original product price:

– Raw material costs, labor costs and other production and business costs incurred above normal levels;

storage costs minus inventory storage costs necessary for the next production process and storage costs prescribed by Vietnamese Accounting Standard No. 02 – Inventories;

– Selling expenses;

– Business management costs.

1. d) For finished real estate products (projects invested by enterprises):

d 1 ) Finished real estate products include: land use rights; houses or houses and land use rights; infrastructure invested in and built by enterprises for sale during normal business operations.

d2) The original cost of finished real estate includes all costs directly related to the investment and construction of real estate (including investment and construction costs of infrastructure attached to the real estate) to put the real estate into a state ready for sale.

d3) Costs directly related to investment and construction of finished real estate products must be actual costs incurred and costs for which there are volume acceptance records.

1. d) Outsourced products for processing are evaluated based on actual processing costs, including: Cost of raw materials and direct materials; outsourcing costs and other costs directly related to the processing process.
2. e) In case the enterprise records the daily import and export of products at the provisional price (which can be the planned cost price, standard cost price, unified import price…). At the end of the accounting period, the enterprise must calculate the actual cost price of the imported products and determine the difference coefficient between the actual cost price and the provisional price of the product (including the difference of the product in stock at the beginning of the period) as a basis for determining the actual cost price of the imported and exported products during the period (using the calculation formula as instructed in Account 152 – Raw materials and supplies).
3. g) Detailed accounting of finished products must be performed for each warehouse, each type, group, and product grade, and must track quantity and value in detail,…
4. Structure and content of Account 155 – Products

Debit:

– Value of products in stock;

– Value of surplus products during inventory.

Creditor:

– Actual value of products leaving the warehouse;

– The value of the missing product during inventory.

Debit Balance:

Actual value of inventory at the end of the accounting period.

Enterprises can open additional product detail accounts (such as: finished products, semi-finished products, finished real estate products,…) suitable to the characteristics of production and business activities and management requirements of their unit.

3. Accounting methods for some major economic transactions

3.1. When entering into warehouse the products manufactured by the enterprise or outsourced for processing, record :

In debt Account 155 – Product product

Credit account 154 – Cost of production and business in progress.

3.2. When releasing products from warehouse for sale to customers (including finished real estate products that have been completed and handed over to customers), the enterprise reflects the cost of products sold, recording:

Debit account 632 – Cost of goods sold

There is account 155 – Products.

sending products for sale, record:

Debit account 157 – Goods sent for sale

There is account 155 – Products.

returned products :

Debit account 521 – Revenue deductions

Debit account 3331 – VAT payable (33311)

There are accounts 111, 112, 131,… (total value of returned goods).

At the same time, reflect the cost of finished products sold and returned to the warehouse, record:

In debt Account 155 – Products

Credit account 632 – Cost of goods sold.

3.5. When a business exports products for internal consumption:

Debit accounts 641, 642, 241, 211,…

Credit account 155 – Products

Credit account 3331 – VAT payable (if any).

3.6. Export finished products to affiliated units:

– In case the affiliated unit is authorized to record revenue and cost of goods sold, the enterprise records the cost of products sold, recording:

Debit account 632 – Cost of goods sold

There is account 155 – Products.

– In case the affiliated unit is not authorized to record revenue and cost of goods sold, the enterprise records the value of products circulated between stages within the enterprise as internal receivables, recording:

Debit account 136 – Internal receivables

There is account 155 – Product product

Credit account 333 – Taxes and amounts payable to the State (details of each type of tax) (if any).

3.7. When exporting products to contribute capital to subsidiaries, joint ventures, associates, or other investments, record:

Debit account 221, 222, 228 (according to revaluation price )

Debit account 811 – Other expenses (the difference between the revaluation price and the product’s book value)

Have Account 155 – Product product

Credit account 711 – Other income (difference between revaluation price and book value of product).

3.8. When releasing products used to buy back capital contributions at subsidiaries, joint ventures, associates, and other investments, record:

– Record product sales revenue corresponding to the increase in value of investments in subsidiaries, joint ventures, associates, and other investments, record:

Debit account 221, 222, 228 (at fair value)

Credit account 511 – Sales revenue and service provision Credit account 3331 – Output VAT payable (if any).

– Record the cost of products used to buy back capital contributions at subsidiaries, joint ventures, associates, and other investments, record:

Debit account 632 – Cost of goods sold

There is account 155 – Products.

3.9. In all cases of product surplus or shortage discovered during inventory, a record must be made and the cause must be investigated to determine the person at fault. The enterprise will base on whether the cause of the surplus or shortage is clear or unclear to handle and account for it similarly to the instructions in Account 152 – Raw materials and supplies.

3.10. In case the enterprise uses the manufactured products for giving, presenting, promoting, or advertising:

1. a) In case of exporting products for promotion or advertising without collecting money, without other conditions such as having to buy products, goods… or according to the business model, the product characteristics of the enterprise are that the selling price of the main product does not change regardless of whether the customer receives or does not receive the complimentary product, the enterprise records the value of the product used for promotion or advertising in the cost of sales, recording:

Debit account 641 – Sales expenses

There is account 155 – Products.

1. b) In case of exporting products for promotion or advertising but customers can only receive promotional or advertising goods with other conditions such as having to buy the product (for example, buy 2 products and get 1 free…), the enterprise must allocate the amount of money collected to calculate revenue for both promotional and advertising goods . The nature of the transaction in this case is to reduce the price of goods sold, so the value of promotional and advertising goods is included in the cost of goods sold .

– When exporting products for promotion or advertising, the business records the value of promotional goods in the cost of goods sold, recording:

Debit account 632 – Cost of goods sold

There is account 155 – Products.

– Record revenue from promotional and advertising products based on allocating the amount collected to both products sold and promotional and advertising products, record:

Debit account 111, 112, 131…

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (33311) ( if any ).

1. c) If the products are exported as gifts to employees covered by the bonus and welfare fund, the enterprise must record revenue and cost of goods sold as normal sales transactions:

– Record cost of goods sold for the value of products used as gifts for employees, record:

Debit account 632 – Cost of goods sold

Have account 155 – Product.

– Record revenue of products covered by bonus and welfare funds, record:

Debit account 353 – Reward and welfare fund (total payment amount)

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (33311) ( if any).

1. d) If products are released from the warehouse to be given away, gifted, or given away, record:

Debit account 641, 642,…

Have Account 155 – Product product

Credit account 3331 – VAT payable (33311) (if any).

3.11. Accountants pay employees by product

– Product revenue used to pay salaries to employees, recorded:

Debit account 334 – Payable to employees ( total payment price)

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (33311)

Credit account 3335 – Personal income tax (if any).

– Record cost of goods sold for products used to pay salaries to employees, record:

Debit account 632 – Cost of goods sold

Have Account 155 – Product .

3.12. Reflecting the cost of liquidated or sold products due to stagnation, loss of quality, or unnecessary use, record:

Debit account 632 – Cost of goods sold

There is account 155 – Products.

 

ACCOUNT 156 – GOODS

1. Accounting principles
2. a) This account is used to reflect the current value and the increase or decrease in the types of goods of the enterprise, including goods in warehouses, stalls, real estate goods and other assets held or purchased for resale (except for trading securities), for example: phone cards, service usage rights, goods receipt rights, gift certificates, discount coupons, etc. Goods in warehouses and stalls are materials and products purchased by the enterprise for the purpose of sale (wholesale and retail). Real estate goods include: Land use rights; houses; or houses and land use rights; infrastructure purchased for sale during the normal business operation period; Investment real estate is converted into inventory when the owner begins to deploy for the purpose of sale.

In case purchased goods are used both for sale and as raw materials for production and business without clearly distinguishing between the purpose of sale and use, they are reflected in Account 152 – Raw materials and supplies.

In the import-export transaction of goods on consignment , this account is only used by the consignor, not by the consignee (the party receiving the goods on behalf of the consignee). Accounting for the purchase and sale of goods related to foreign currency transactions is carried out according to the instructions in Account 413 – Exchange rate differences.

1. b) The following cases are not reflected in Account 156 – Goods chemical:

– Goods sold and kept for other businesses;

– Goods purchased for use as raw materials , tools and equipment for production and business activities (recorded in Account 152 – Raw materials, materials or Account 153 – Tools, equipment,…).

1. c) Accounting for import, export, and inventory of goods on Account 156 is reflected according to the original cost principle prescribed in Vietnamese Accounting Standard 02 – Inventories. Original cost of purchased goods includes: Purchase price, purchasing cost, import tax, special consumption tax, environmental protection tax (if any), import VAT (if not deductible). In case an enterprise purchases goods for resale but for some reason needs to process, pre-process, or refurbish If the value of the goods is to be selectively classified and graded to increase the value or saleability of the goods, the value of the purchased goods includes the cost of processing and preliminary processing.

– The original cost of purchased goods is calculated according to each input source and depending on the characteristics of production and business activities and management requirements of the enterprise, the original cost of goods can be tracked in detail according to the purchase price and cost of purchasing goods.

The cost of purchasing goods includes costs directly related to the process of purchasing goods such as: Cost of goods insurance, warehouse rent, yard rent, transportation, loading and unloading, storage costs to bring goods from the place of purchase to the enterprise’s warehouse, natural losses within the norm arising during the process of purchasing goods,…

For purchasing costs related to many goods, they can be allocated to each type and item according to appropriate allocation criteria and must ensure consistency according to the provisions of Vietnamese Accounting Standards. In case the purchasing costs of goods with small value related to many items , the enterprise can immediately record them in the cost of goods sold.

1. d) Detailed accounting of goods must be performed for each warehouse, each type, each item, and must track quantity and value in detail.
2. Structure and content of Account 156 – Goods

Debit side :

– Original price of goods purchased and stored according to each import source;

– Value of outsourced goods (including purchase price and processing cost);

– Value of goods sold returned by buyers;

– Value of goods discovered in excess during inventory;

– Value of real estate purchased or transferred from investment real estate.

Creditor:

– Value of goods released from warehouse for sale, delivery to agents, outsourcing, or use for production, business,…

– Trade discounts, discounts enjoyed on purchased goods;

– Value of goods returned to the seller;

– Value of goods found to be missing during inventory;

– Value of real estate sold or converted into investment real estate, owner-occupied real estate or fixed assets.

Debit Balance :

Actual value of inventory at the end of the accounting period.

Enterprises can open additional detailed accounts for goods ( such as: goods purchased by the enterprise, real estate goods,…) suitable to the characteristics of production and business activities and management requirements of their unit.

3. Accounting methods for some major economic transactions

3.1. Goods purchased from outside are imported into the enterprise’s warehouse, based on invoices, warehouse receipts and related documents:

1. a) When purchasing goods for storage, record:

Debit account 156 – Goods (details of purchased goods)

Debit account 133 – Deductible VAT (1331) (if any)

There are accounts 111, 112, 141, 331,… (total payment price).

1. b) When importing goods:

– When importing goods, record:

In debt Account 156 – Goods

Credit account 331 – Payable to sellers

Credit account 3331 – VAT payable (33312) (if input VAT of imported goods is not deductible)

Credit account 3332 – Special consumption tax (if any)

Credit account 3333 – Import and export tax (import tax details)

Credit account 33381 – Environmental protection tax (if any).

input VAT of imported goods is deductible, record:

Debit account 133 – Deductible VAT

Credit account 3331 – VAT payable (33312).

– In case of purchasing goods with a part of advance payment to the seller in foreign currency, the value of the purchased goods corresponding to the advance payment is recorded at the actual transaction exchange rate at the time of advance payment. The value of the purchased goods in foreign currency that has not been paid is recorded at the actual transaction exchange rate at the time of receiving the goods.

– Purchase of goods under import consignment is carried out in accordance with the provisions of Account 331 – Payable to sellers.

3.2. In case the enterprise has received the seller’s invoice but by the end of the accounting period, the goods have not been imported into the warehouse , then based on the invoice, record:

Debit account 151 – Goods in transit

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331,…

– In the next accounting period, when the purchased goods are on the way to the warehouse, record:

Debit account 156 – Goods

Account 151 – Goods in transit.

3.3. In case an enterprise receives a trade discount or rebate after purchasing goods, the enterprise must base on the fluctuation of goods to allocate the trade discount or rebate received based on the remaining inventory and the number of goods sold during the period:

Debit accounts 111, 112, 331,…

Credit account 156 – Goods (if goods are still in stock)

Credit account 632 – Cost of goods sold (if consumed during the period)

Credit account 133 – Deductible VAT (1331) (if any).

3.4. The value of purchased goods that do not meet the specifications and quality according to the economic contract must be returned to the seller, recorded as:

Debit accounts 111, 112, 331,…

Have account 156 – Row chemical

Credit account 133 – Deductible VAT (1331) (if any).

3.5. Reflecting the cost of purchasing goods, record:

Debit account 156 – Goods (if included in the value of purchased goods)

Debit account 632 – Cost of goods sold (if included in cost of goods sold)

Debit account 133 – Deductible VAT (if any)

Have the Account 111 , 112, 141, 331,…

3.6. When purchasing goods by installment payment , record:

Debit account 156 – Goods (according to purchase price paid immediately)

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112 (amounts paid immediately)

Credit account 331 – Payable to sellers.

– Periodically, reflect the interest on late payments and installment payments payable to the seller, record:

Debit account 635 – Financial expenses

Credit account 331 – Payable to sellers.

– Periodically, when paying the seller including principal and interest for late payment and installment payments , record:

Debit account 331 – Payable to sellers

There are Account 111,112

3.7. When purchasing real estate goods for sale, the enterprise reflects the purchase price and costs directly related to the purchase of real estate goods, recording:

In debt Account 156 – Goods

Debit account 133 – Deductible VAT (1332) (if any)

There are accounts 111, 112, 331,…

3.8. In case investment real estate is converted into inventory when the owner decides to repair, renovate, or upgrade for sale:

– When there is a decision to repair, renovate , or upgrade investment real estate for sale, record:

Debit account 156 – Goods (remaining value of investment real estate)

Debit account 214 – Depreciation of fixed assets (2147) (Accumulated depreciation)

Credit account 217 – Investment real estate (original cost).

– When incurring repair, renovation, and upgrade costs for the purpose of sale, record:

Debit account 154 – Cost of production and unfinished business

Debit account 133 – Deductible VAT

There are accounts 111, 112, 152, 334, 331,…

– At the end of the repair, renovation, and upgrade phase for the purpose of sale, transfer all costs to increase the value of real estate goods, record:

In debt Account 156 – Goods

Credit account 154 – Cost of production and business in progress.

3.9. The value of goods sold is determined as consumed, recorded:

Debit account 632 – Cost of goods sold

Credit account 156 – Goods.

At the same time, the business reflects sales revenue:

– For goods subject to indirect taxes (VAT, special consumption tax, export tax, environmental protection tax), enterprises reflect sales revenue and service provision at pre-tax selling price, indirect taxes payable are separated for each type of tax immediately upon revenue recognition, recorded:

Debit account 111, 112, 131,…

Credit account 511 – Sales revenue and service provision (price excluding tax )

Credit account 333 – Taxes and amounts payable to the State.

– In case the taxes payable are not immediately separated by type, the enterprise records revenue including taxes payable. Periodically, the enterprise determines the tax liability and reduces revenue, recording:

Debit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and amounts payable to the State.

3.10. In case of outsourcing of goods processing and manufacturing:

– When exporting goods for processing, record:

Debit account 154 – Cost of production and unfinished business

Have account 156 – Goods.

– Cost of processing and manufacturing goods, record:

Debit account 154 – Cost of production and unfinished business

Debit account 133 – Deductible VAT (if any)

There are Accounts 111, 112, 331,…

– When finished processing, return the goods to the warehouse and record:

In debt Account 156 – Goods

Credit account 154 – Cost of production and business in progress.

3.11. When exporting goods to customers or exporting to agents, businesses receiving consignment goods, etc., record:

Debit account 157 – Goods sent for sale

Have account 156 – Goods.

3.12. When exporting goods to affiliated units for sale:

– In case the affiliated unit is authorized to record revenue and cost of goods sold, the unit records the cost of goods sold and records:

Debit account 632 – Cost of goods sold

Credit account 156 – Goods

Credit account 333 – Taxes and amounts payable to the State (if any).

– In case the affiliated unit is not authorized to record revenue and cost of goods, the unit records the value of goods circulated between stages within the enterprise as internal receivables, and records:

Debit account 136 – Internal receivables (1368)

Have account 156 – Goods

Credit account 333 – Taxes and amounts payable to the State (if any).

3.13. When exporting goods for internal consumption, record:

Debit accounts 641, 642, 241, 211,…

There is account 156 – Goods

Credit account 333 – Taxes and amounts payable to the State (if any).

3.14. In case the enterprise uses goods for promotion, advertising, giving or giving away:

1. a) In case of exporting goods for promotion or advertising without collecting money, without other conditions such as having to buy products, goods … or according to the business model, the characteristics of the enterprise’s goods are that the main selling price of goods does not change regardless of whether the customer receives or does not receive the product or goods as gifts, the enterprise records the value of goods used for promotion or advertising in sales expenses, recording:

Debit account 641 – Sales expenses

Have Account 156 – Row chemical

1. b) In case of exporting goods for promotion or advertising but customers can only receive promotional or advertising goods with other conditions such as having to buy goods (for example, buy 2 products and get 1 product free…), the enterprise must allocate the amount of money collected to calculate revenue for the promotional goods. The nature of this transaction is to reduce the price of goods sold, so the value of promotional goods is included in the cost of goods sold.

– When selling promotional goods, the enterprise records the value of promotional goods in the cost of goods sold, recording:

Debit account 632 – Cost of goods sold

Have account 156 – Goods.

– Record revenue from promotional goods based on allocating the amount collected to both main goods sold and promotional and advertising goods, record:

In debt the Account 111 , 112, 131…

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (33311) (if any).

1. c) If the goods are given as gifts to employees and are covered by the reward and welfare fund, the enterprise must record revenue and cost of goods as in a normal sales transaction, recording:

– Record cost of goods sold for goods used as gifts for employees, record:

Debit account 632 – Cost of goods sold

There is account 156 – Row chemical

– Record revenue of goods covered by bonus and welfare funds, record:

Debit account 353 – Reward and welfare fund (total payment amount)

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (33311) (if any).

1. d) If goods are released from the warehouse to be given away, donated, or presented, record:

Debit accounts 641, 642,…

Have Account 156 – Row chemical

Credit account 3331 – VAT payable (33311) (if any).

3.15. Accountants pay employees in goods:

– Enterprises record revenue, record:

Debit account 334 – Payable to employees (total payment price)

Credit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and amounts payable to the State (if any )

Credit account 3335 – Personal income tax (if any).

– Record cost of goods sold for the value of goods used to pay salaries to employees , record:

Debit account 632 – Cost of goods sold

Have account 156 – Goods.

3.16. Goods contributed as capital to subsidiaries, joint ventures, associates, and other investments, record :

Debit accounts 221, 222, 228 (according to revaluation price)

Debit account 811 – Other expenses (the difference between the revaluation price and the book value of the goods)

Credit account 156 – Goods

Credit account 711 – Other income (difference between revaluation price and book value of goods).

3.17. At the end of the period, when allocating purchasing costs to goods identified as sold during the period, record:

Debit account 632 – Cost of goods sold

Credit account 156 – Goods.

3.18. Any case of discovering surplus or shortage of goods at any stage of business must be recorded and the cause must be investigated. Enterprises must base on whether the reason for surplus or shortage of goods is clear or unclear to handle and account for it similarly to the instructions in Account 152 – Raw materials and supplies.

3.19. The value of real estate goods is determined as sold during the period, based on VAT invoices or sales invoices, real estate goods handover minutes:

– Reflecting cost price, record:

Debit account 632 – Cost of goods sold

There is account 156 – Goods.

At the same time, the enterprise reflects revenue from selling real estate goods:

Debit accounts 111, 112, 131,…

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (33311) (if any).

3.20. Reflecting the cost of liquidated goods, when selling due to stagnation, loss of quality, unnecessary use, etc., record:

Debit account 632 – Cost of goods sold

Credit account 156 – Goods.

 

ACCOUNT 157 – GOODS SENT FOR SALE

1. Accounting principles
2. a) This account reflects the value of goods and products sent to customers, consigned for sale to agents, consigned, completed services delivered to customers according to economic contracts or orders but not yet determined as sold (not yet accepted for payment by customers so not yet counted as sales revenue in the period); goods and products sent to bonded warehouses.
3. b) Goods and products reflected in this account are still owned by the enterprise. The enterprise must open a detailed book to track each type of goods and products, each shipment from the time of shipment until it is determined to be sold.
4. c) Do not reflect in this account the costs of transportation, loading and unloading,… paid on behalf of customers . Account 157 can be opened in detail to track each type of goods, products,… sent for sale to each customer, to each receiving agency.
5. Structure and content of Account 157 – Goods sent for sale

Debit:

– Value of goods and products sent for sale to customers, agents, sent to bonded warehouses,…;

– Value of services provided to customers but not yet determined as sold.

Creditor:

– Value of goods, products sent for sale, services provided determined as sold.

Debit Balance:

Value of goods, products sent, services provided that have not been determined as sold during the period.

Enterprises can open additional detailed accounts for goods sent for sale (such as: goods sent for sale to customers, sent to agents, consignments; goods , products sent to bonded warehouses;…) in accordance with the characteristics of production and business activities and management requirements of their unit.

3. Accounting methods for some major economic transactions

3.1. When exporting goods and products to customers and agents according to economic contracts, based on the warehouse delivery note, record:

Debit account 157 – Goods sent for sale

There are accounts 155 and 156.

3.2. Services that have been completed and delivered to customers but have not been determined as sold during the period, record:

Debit account 157 – Goods sent for sale

Credit account 154 – Cost of production and business in progress.

3.3. When goods sent for sale and services completed and delivered to customers are determined to be sold during the period:

– For products, goods and services sent for sale that are subject to indirect taxes (VAT, special consumption tax, export tax, environmental protection tax), enterprises reflect sales revenue and service provision at pre-tax selling price, indirect taxes payable are separated for each type of tax immediately upon revenue recognition, recorded:

In debt the Account 111, 112, 131,…

Credit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and amounts payable to the State.

– In case the taxes payable are not immediately separated by type, the enterprise records revenue including taxes payable. Periodically, the enterprise determines the tax liability and reduces revenue, recording:

Debit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and amounts payable to the State

– At the same time, reflect the cost price of goods, products and services sold during the period, record:

Debit account 632 – Cost of goods sold

There is account 157 – Goods sent for sale .

3.4. When exporting goods and products to the Bonded Warehouse for export (if any), record:

Debit account 157 – Goods sent for sale

There are Account 154, 155, 156,…

3.5. When goods and products in bonded warehouses are exported (if any):

– Reflecting the cost of exported goods, record:

Debit account 632 – Cost of goods sold

Credit account 157 – Goods sent for sale

– Reflecting revenue from exported goods, record:

Debit accounts 111, 112, 131,…

Credit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and amounts payable to the state (if any).

 

ACCOUNT 158 – RAW MATERIALS AND SUPPLIES AT THE DUTY-BONTED WAREHOUSE

1. Accounting principles
2. a) This account is used to reflect the increase, decrease and current quantity of raw materials and supplies in bonded warehouses. Bonded warehouses only apply to enterprises serving the production of export goods, and are subject to special customs management regimes . The exemption from calculating and paying import tax and other related taxes on imported raw materials and supplies for the production of export goods of enterprises when stored in bonded warehouses is implemented in accordance with the provisions of customs law.
3. b) Imported raw materials and supplies stored in bonded warehouses only include raw materials and supplies of enterprises to serve the production of export goods that have been cleared through customs but have not yet paid tax.
4. c) Enterprises must open detailed books to reflect the quantity and value of each raw material and supply for each import and export from bonded warehouse.
5. Structure and content of Account 158 – Raw materials and supplies at bonded warehouses

Debit:

The value of raw materials and supplies in bonded warehouses increased during the period.

Creditor:

The value of raw materials and supplies in bonded warehouses decreased during the period.

Debit Balance :

Value of raw materials and supplies remaining in bonded warehouse at the end of the accounting period .

3. Accounting methods for some major economic transactions

3.1. When importing raw materials and supplies to produce export products or process export goods and putting them into a bonded warehouse so that the enterprise does not have to pay import tax and import VAT as prescribed, record:

Debit account 158 – Raw materials and supplies at bonded warehouse

Credit account 331 – Payable to sellers.

3.2. When exporting imported raw materials and supplies from the Bonded Warehouse to produce products or process export goods, record:

Debit account 621 – Direct material and raw material costs

There is account 158 – Raw materials and supplies at bonded warehouse.

3.3. In case imported raw materials and supplies in bonded warehouses are damaged, have reduced quality, or do not meet the requirements for producing export goods, customs procedures must be carried out for re-export or destruction:

– In case of re-export (return to seller), record:

Debit account 331 – Payable to sellers

There is account 158 – Raw materials and supplies at bonded warehouse.

– In case the enterprise suffers losses due to having to destroy raw materials and supplies stored in the Bonded Warehouse, record:

Debit account 632 – Cost of goods sold

There is account 158 – Raw materials and supplies at bonded warehouse.

3. 4. In case an enterprise sells raw materials and supplies at bonded warehouses into domestic Vietnam, the enterprise must carry out procedures and pay taxes according to the provisions of law.

 

ACCOUNT 171 – TRANSACTIONS OF PURCHASE AND RESALE OF GOVERNMENT BONDS

1. Accounting principles
2. a) This account is used to reflect the transactions of buying and selling Government bonds that occurred during the period. This account only records the value of the Government bond repurchase contract, not the coupon that the buyer receives on behalf of the seller at the time(s) within the contract term.
3. b) Enterprises must comply with regulations on transaction forms, transaction terms and income from government bonds in purchase and resale transactions as prescribed in current financial mechanisms on purchase and resale of government bonds.
4. c) The buyer of bonds under a repurchase agreement shall not record revenue when receiving bond coupons from the seller at times within the term of the repurchase transaction, but shall record it as other payables.
5. Structure and content of Account 171 – Transactions of buying and reselling Government bonds

Debit:

– The value of government bonds repurchased by the seller upon contract expiration;

– The value of the bonds purchased by the buyer when the Government bond repurchase contract takes effect;

– Allocate the difference between the resale price and the purchase price of government bonds according to the government bond repurchase contract to the buyer.

Creditor:

– The value of government bonds when sold under the government bond repurchase contract of the buyer when the contract expires;

– The selling value of the bonds of the seller when the Government bond repurchase contract takes effect;

government bond repurchase contract for the seller .

Debit Balance:

The value of the buyer’s government bonds before the contract expires resale at the end of the accounting period.

Credit Balance:

Value of the seller’s government bonds before the expiration of the repurchase agreement at the end of the accounting period .

3. Accounting methods for some major economic transactions

3.1. Accounting for the seller of government bonds under repurchase agreements (Repo)

1. a) When the contract for purchase and resale of Government bonds takes effect, record:

Debit accounts 111, 112 (amount based on selling price)

Credit account 171 – Transactions of buying and selling government bonds.

1. b) Periodically, the seller allocates the difference between the selling price and the repurchase price of the Government bonds of the Government bond purchase and resale contract into expenses, recording:

Debit account 635 – Financial expenses (unit other than securities company)

Credit account 171 – Transactions of buying and selling Government bonds (allocation time is consistent with the contract time).

1. c) When the term of the Government bond purchase and resale contract ends, the company receives the securities back and pays the money stated in the Government bond purchase and resale contract, recording:

Debit account 171 – Transactions of buying and selling Government bonds

There are accounts 111, 112 (according to the repurchase price stated in the contract).

1. d) When the buyer pays the seller the number of coupons that the buyer receives on behalf of the seller at the time(s) within the contract term, the seller records:

Debit accounts 111, 112, 138

Credit account 515 – Financial activity revenue (unit other than securities company) (bond coupon number).

3.2. Accounting for the buyer of government bonds under repurchase agreements (Repo)

1. a) When the contract comes into effect, based on the payment voucher and other documents, record:

Debit account 171 – Transactions of buying and selling Government bonds

There are accounts 111, 112 (amount payable according to purchase price).

1. b) Periodically, the buyer allocates the difference between the resale price and the purchase price of the Government bonds of the Government bond repurchase contract into revenue, recording:

Debit account 171 – Transactions of buying and selling Government bonds

Financial activity revenue (other units of the company) securities) (allocated over the term of the contract).

1. c) Upon receipt of the coupon of the seller’s bond at the time(s) within the contract term, record:

Debit accounts 111, 112,…

Credit account 338 – Other payables (3388).

At the same time, carry out procedures to pay back the coupons of the seller’s bonds at the time(s) within the contract term that the buyer receives on behalf of the seller, record:

Debit account 338 – Other payables

There are accounts 111, 112…

1. d) At the end of the contract term, record:

Debit accounts 111, 112, 138

Credit account 171 – Transactions of buying and selling government bonds.

 

PRINCIPLES OF ACCOUNTING FOR FIXED ASSETS , INVESTMENT REAL ESTATE AND CONSTRUCTION IN PROGRESS

1. Fixed assets, investment real estate and unfinished construction investment costs must be monitored, settled, managed and used in accordance with current relevant laws.
2. Enterprises must monitor in detail the sources of fixed asset formation to allocate depreciation/amortization value of fixed assets appropriately according to the following principles:

– For fixed assets related to production and business activities, depreciation is included in production and business costs;

– For fixed assets formed from welfare funds and science and technology development funds, depreciation is recorded as a reduction in the funds forming those fixed assets.

3. Accountants classify fixed assets and investment real estate according to their intended use. In cases where an asset is used for multiple purposes, for example, a mixed-use building that is used as an office, for rent, and partly for sale, the enterprise must estimate the fair value of each part or allocate it according to other more reasonable criteria to record it in accordance with the actual purpose of use of the enterprise. In cases where a project has a number of common items (such as elevators, air conditioning systems, parking garages, etc.), part of which is for use and part for rent, the enterprise can classify these common assets as fixed assets or investment real estate according to the criteria most appropriate to each project of the enterprise.

– In case a significant part or most of the parts of the asset If an asset is used for a specific purpose other than the purpose of the remaining parts, the enterprise can classify the entire asset according to that important part based on the level of importance ;

– In case there is a change in the function of using parts of the asset, the enterprise is allowed to reclassify the asset according to the purpose of use according to the provisions of relevant Vietnamese accounting standards.

4. When an enterprise purchases fixed assets that are accompanied by additional products, equipment, spare parts, etc., it must allocate the cost to both the main fixed assets purchased and the assets received along with the corresponding fair value of each asset at the date of purchase, or the enterprise must determine and record separately the assets given along with their fair value (market value of the asset, value of similar assets, etc.) and subtract from the purchase price to determine the original cost of the main fixed assets purchased, depending on which method is more suitable for the enterprise. In case an enterprise purchases fixed assets and receives additional specialized equipment and spare parts, which can only be used with the main fixed assets to prevent sudden damage to the main fixed assets (meaning that this type of equipment and spare parts will no longer be of use when the main fixed assets are liquidated, sold or fully depreciated), the enterprise does not have to determine and record the value of these equipment and spare parts separately, but must open a detailed logbook to track the quantity and nature of these gifted assets and present them in the Notes to the Financial Statements.
5. In case an enterprise purchases fixed assets or investment real estate and pays by deferred payment or installment payment:

– The original cost of fixed assets and investment real estate is determined based on the purchase price of fixed assets and investment real estate paid in cash plus (+) directly related costs included in the original cost of fixed assets up to the time the assets are put into a state capable of operating in the manner intended by the enterprise (excluding refundable taxes). The interest paid in arrears and installments is accounted for in the financial expenses of each period or capitalized according to the provisions of Vietnamese Accounting Standard No. 16 – Borrowing costs.

+ In case the late payment and installment interest are specifically stipulated in the contract, the enterprise must base on the contract to determine and separate the late payment and installment interest of each period.

+ In case the interest on late payment and installment payments is not specifically stipulated in the contract and the late payment and installment payment period is over 12 months, the enterprise is required to separate the interest on late payment and installment payments. Accordingly, the enterprise must base on the difference between the purchase price for late payment and installment payments and the purchase price of fixed assets and investment real estate for immediate payment to determine the implicit interest rate and the interest on late payment and installment payments. to record and account.

– Periodically, based on the interest on deferred payment and installment payments, the enterprise records the debt payable to the seller corresponding to the financial expenses of each period. Information on deferred payment and installment payments when purchasing fixed assets and investment real estate must be monitored in detail in the accounting books and explained in the enterprise’s Financial Statements.

6. When contributing fixed assets as capital, the determination of the value of the capital contribution must comply with the provisions of the law on enterprises and the parties must be responsible before the law for intentionally valuing or incorrectly determining the value of the fixed assets contributed as capital.
7. In case an enterprise is assigned to manage infrastructure assets and other public assets that do not include the state capital component in the enterprise (including infrastructure assets and other public assets that the enterprise is assigned to manage and directly exploits and uses, and does not directly exploit and use), the accounting accounts, accounting records and reports shall be applied to these assets in accordance with the provisions of relevant current laws.
8. Accounting for fixed assets, investment real estate and construction investment costs related to foreign currencies is performed according to the instructions in Account 413 – Exchange rate differences.

 

ACCOUNT 211 – TANGIBLE FIXED ASSETS

1. Accounting principles
2. a) This account is used to reflect the current value and the increase and decrease of all tangible fixed assets of the enterprise at original price.
3. b) Tangible fixed assets are assets in physical form held by an enterprise for use in production and business activities in accordance with the standards for recording tangible fixed assets.

asset components are linked together to form a system to perform one or several specific functions (in which the usage time of each component component may be different), depending on the requirements for management and use of fixed assets of the unit, the enterprise can consider the entire system or each asset component as an independent tangible fixed asset if the entire system or each asset component simultaneously satisfies the following four criteria:

– Certainly obtain future economic benefits from the use of that asset;

– The original cost of the asset must be determined reliably;

– Estimated usage time over 1 year;

– Meets the value standards according to current regulations.

1. d) Biological assets are perennial plants that produce periodic products and working animals that are accounted for as tangible fixed assets. The determination and classification of biological assets of an enterprise is guided by the provisions of Account 215 – Biological assets .
2. d) The value of tangible fixed assets is reflected in Account 211 – Tangible fixed assets at original cost. Enterprises must monitor the original cost of each fixed asset in detail. Depending on the source of formation, the original cost of tangible fixed assets is determined as follows:

1 ) The original cost of a tangible fixed asset purchased includes: Purchase price (minus trade discounts and rebates), taxes incurred when purchasing fixed assets (excluding refundable taxes) and costs directly related to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the enterprise such as site preparation costs, initial transportation and loading costs, installation and testing costs (minus (-) recoveries of products and scrap from testing), expert costs and other directly related costs as prescribed by law. Borrowing costs directly related to the investment in construction or production of unfinished assets are capitalized in accordance with the provisions of Vietnamese Accounting Standard No. 16 – Borrowing costs.

For fixed assets being real estate: When purchasing real estate, enterprises must separate the value of land use rights and assets on land according to the provisions of law. The value of assets on land is recorded as the original price of tangible fixed assets; The value of land use rights is recorded as the original price of intangible fixed assets or costs awaiting allocation depending on each case according to the provisions of law.

d2) Original price of tangible fixed assets formed from completed basic construction investment

– Original price of fixed assets under the bidding method: Is the final settlement price of the construction project according to the provisions of law on management of construction investment costs, other directly related costs and registration fees (if any). Borrowing costs directly related to the process of investing in the construction of fixed assets are included in the original price of fixed assets (capitalized) when satisfying the conditions specified in Vietnamese Accounting Standard No. 16 – Borrowing costs.

– The original cost of perennial trees for periodic products and working animals is the total actual costs that the enterprise has spent to purchase, care for, and cultivate the garden and working animals from the time the asset is first formed until the maturity stage (ready for products or in the necessary state according to technical requirements to be able to operate in the way intended by the enterprise) and other directly related costs .

– Self-built or self-produced tangible fixed assets:

+ The original price of self-constructed tangible fixed assets is the final settlement value of the project according to the provisions of law on construction investment cost management plus (+) other directly related costs plus (+) registration fee (if any) when the project is put into use. In case the fixed assets have been put into use but have not yet been finalized, the enterprise shall account for an increase in the original price according to the provisional price and adjust it after the final settlement of the completed project .

+ The original cost of self-produced tangible fixed assets is the actual cost of tangible fixed assets plus (+) costs directly related to putting the fixed assets into a state capable of operating in the manner intended by the enterprise or according to the provisions of law on management of construction investment costs. Borrowing costs directly related to the process of investing in construction of fixed assets are included in the original cost of fixed assets (capitalized) when satisfying the conditions specified in Vietnamese Accounting Standard No. 16 – Borrowing costs.

– Enterprises are not allowed to include in the original price of tangible fixed assets internal profits and unreasonable expenses such as wasted raw materials, materials, labor or other expenses used in excess of the normal level in the process of self-construction or self-production.

d3) The original cost of a tangible fixed asset purchased in the form of exchange for a dissimilar tangible fixed asset or other asset is determined according to the fair value of the tangible fixed asset received or the fair value of the asset exchanged , after adjusting the cash or cash equivalents additionally paid or received plus (+) costs directly related to putting the asset into a state capable of operating in the manner intended by the enterprise (excluding refundable taxes).

The original cost of a tangible fixed asset purchased in the form of exchange for a similar tangible fixed asset or which may be formed by being sold in exchange for ownership of a similar asset (similar assets are assets with similar uses, in the same business field and with equivalent value). In this case, no profit or loss is recorded during the exchange process. The original cost of the received fixed asset is calculated by the remaining value of the exchanged fixed asset.

d4) The original price of tangible fixed assets granted or transferred includes: The remaining value in the accounting books of the fixed assets at the granting or transferring enterprise or the value according to the actual assessment of the Delivery Council or professional valuation organization according to the provisions of law and directly related costs such as transportation, loading and unloading, upgrading, installation, testing, and registration fees. (if any)… that the recipient of the asset must pay up to the time the fixed asset is put into a state capable of operating in the manner intended by the enterprise.

The original price of tangible fixed assets transferred between affiliated units in the same enterprise is the original price reflected in the transferred unit in accordance with the fixed asset’s records. The unit receiving the fixed asset shall base on the original price, accumulated depreciation, remaining value in the accounting books and the fixed asset’s records to reflect in the accounting books. Expenses related to the transfer of fixed assets between affiliated units shall not be recorded as an increase in the original price of the fixed asset but shall be recorded as production and business expenses in the period.

d5) The original price of tangible fixed assets received as capital contribution or returned capital contribution is the value determined by members, shareholders or valuation organizations according to the provisions of law.

6 ) Original price of fixed assets discovered to be in excess, sponsored, donated, or given: Is the value according to the actual assessment of the Delivery Council or professional valuation organization and the costs that the recipient must pay up to the time of putting the fixed assets into a state capable of operating in the manner intended by the enterprise such as transportation, loading, unloading, installation, testing, registration fees, etc. (if any).

d7) The original cost of fixed assets purchased in foreign currency is carried out according to the instructions in Account 413 – Exchange rate differences.

1. e) Enterprises are only allowed to change the original price of tangible fixed assets in the following cases:

– Construction, additional equipment or upgrade to increase capacity or extend the usage time of fixed assets;

– Changing one or several parts of tangible fixed assets to increase their useful life or increase their usage capacity;

– Improving parts of tangible fixed assets significantly increases the quality of manufactured products;

– Applying new production technology processes reduces operating costs of fixed assets compared to before;

– Dismantling one or more parts of fixed assets;

– Re-evaluate fixed assets according to State decisions (if any);

– Other cases as prescribed by law.

In all cases of increase or decrease of tangible fixed assets, fixed asset records must be established (for example, delivery and receipt minutes, fixed asset liquidation minutes, etc.) and procedures must be carried out according to regulations to serve the fixed asset accounting work.

1. g) Repair and maintenance costs of fixed assets arising regularly every period to keep fixed assets operating normally are recorded in production and business expenses. During the period. Fixed assets that require periodic repair and maintenance (such as power plant turbines, aircraft engines, etc.) are accounted for by the enterprise in the costs awaiting allocation and are periodically allocated to production and business costs until the next maintenance period. For costs incurred after the initial recording to upgrade or renovate to increase capacity or extend the usage time of fixed assets ( increase the economic benefits of fixed assets), they are accounted for as an increase in the original cost of fixed assets.
2. h) Tangible fixed assets leased for operation must still be depreciated according to the provisions of Vietnamese accounting standards and current financial mechanisms.
3. i) Tangible fixed assets must be tracked in detail for each fixed asset recording object, according to each type of fixed asset and location of storage, use and management of fixed assets.
4. Structure and content of Account 211 – Tangible fixed assets

Debit:

– The original cost of tangible fixed assets increases due to the completion of construction and handover for use, due to purchases, due to capital contributions, due to grants, due to gifts, sponsorships, etc.;

– Adjust increase in original cost of fixed assets due to construction, additional equipment or renovation and upgrading;

– Adjust the original price of fixed assets due to revaluation .

Creditor:

– The original price of tangible fixed assets decreases due to transfer to other units; due to sale, liquidation or capital contribution to other units,…;

– The original price of fixed assets decreases due to the removal of one or more parts;

– Adjustment to reduce original price of fixed assets due to revaluation.

Debit Balance:

Original price of tangible fixed assets existing at the enterprise at the end of the accounting period.

Enterprises can open detailed accounts to track tangible fixed assets (such as buildings , structures, machinery and equipment; means of transport and transmission; management equipment and tools; perennial trees that produce periodic products;…) to suit the characteristics of their production and business activities and management requirements.

3. Accounting methods for some major economic transactions

3.1. Accounting for increase in tangible fixed assets

1. a) In case of receiving capital contribution from owner or receiving capital granted by tangible fixed assets, record:

Debit account 211 – Tangible fixed assets

Credit account 411 – Owner’s capital investment.

1. b) In case tangible fixed assets are purchased for immediate use (including fixed assets purchased but not yet used but already in a state capable of operating in the manner intended by the enterprise):

– When purchasing tangible fixed assets, based on relevant documents, the enterprise determines the original price of the fixed assets, prepares accounting records, prepares a Fixed Asset Delivery and Receipt Record, and records:

Debit account 211 – Tangible fixed assets (purchase price excluding VAT)

Debit account 133 – Deductible VAT (1332) (if any)

There are Account 111, 112, 331, 341, 352,…

– In case of purchasing and investing in the construction of tangible fixed assets received with equipment, spare parts,… record:

Debit account 211 – Tangible fixed assets

Debit accounts 152, 153,… (equipment, spare parts) (if any)

Debit account 133 – Deductible VAT (1332) (if any)

Have the Account 111 , 112, 331, 341, 352,…

1. c) In case of purchasing tangible fixed assets by installment payment :

– When purchasing tangible fixed assets by installment payment and putting them into immediate use for production and business, record:

Debit account 211 – Tangible fixed assets (recorded at cash purchase price)

Debit account 133 – Deductible VAT (1332) (if any)

There are accounts 111, 112, 331,…

– Periodically, reflect the interest on late payments and installment payments payable to the seller each period, record:

Debit account 635 – Financial expenses

Credit account 331 – Payable to sellers.

– Periodically, when paying the seller including principal and interest for late payment and installment payments , record:

Debit account 331 – Payable to sellers

There are accounts 111, 112

1. d) In case an enterprise is supported, sponsored, donated, or given tangible fixed assets to be put into immediate use for production and business, record:

Debit account 211 – Tangible fixed assets

Credit account 711 – Other income (if fixed assets are supported, sponsored, donated, or given without conditions and are not subject to the case of increasing the owner’s investment capital according to the decision of the competent authority)

Credit account 3387 – Revenue awaiting allocation (if fixed assets are supported, sponsored, donated, or given with conditions attached)

Credit account 4118 – Other capital (if allowed to increase owner’s investment capital according to the decision of competent authority). Other expenses directly related to tangible fixed assets sponsored, donated, or given are included in original price, recorded:

Debit account 211 – Tangible fixed assets

There are accounts 111, 112, 331,…

1. d) In case of self-produced tangible fixed assets:

When using products manufactured by the enterprise itself to convert into tangible fixed assets, record:

Debit account 211 – Tangible fixed assets

Credit account 155 – Products (if released from warehouse for use)

Credit account 154 – Unfinished production and business costs (put into use immediately)

Credit account 3331 – VAT payable (if any)

1. e) In case of tangible fixed assets purchased in the form of exchange :

– Tangible fixed assets purchased in exchange for similar tangible fixed assets and put into immediate use for production and business, record:

Debit account 211 – Tangible fixed assets ( original value of received tangible fixed assets is recorded according to the remaining value of exchanged fixed assets )

Debit account 214 – Depreciation of fixed assets (accumulated depreciation value of exchanged fixed assets)

Credit account 211 – Tangible fixed assets (original cost of exchanged fixed assets).

– Tangible fixed assets purchased in exchange for dissimilar tangible fixed assets:

+ When handing over tangible fixed assets for exchange, record:

Debit account 811 – Other expenses (remaining value of exchanged fixed assets)

Debit account 214 – Depreciation of fixed assets (depreciated value)

Credit account 211 – Tangible fixed assets (original price).

At the same time, record increased income due to exchange of fixed assets:

Debit account 131 – Accounts receivable from customers (total payment amount)

Credit account 711 – Other income (fair value of fixed assets exchanged)

Credit account 3331 – VAT payable (account 33311) (if any).

+ When receiving tangible fixed assets by exchange, record:

Debit account 211 – Tangible fixed assets (fair value of received fixed assets)

Debit account 133 – Deductible VAT (1332) (if any)

Credit account 131 – Accounts receivable from customers (total payment amount).

+ In case additional money must be collected because the value of the fixed asset exchanged is greater than the value of the fixed asset received from the exchange, when receiving money from the party with the exchanged fixed asset, record:

Debit account 111, 112 (additional amount collected)

Credit account 131 – Accounts receivable from customers.

+ In case additional money must be paid because the fair value of the fixed asset exchanged is less than the fair value of the fixed asset received from the exchange, when paying to the party with the exchanged fixed asset, record:

Debit account 131 – Accounts receivable from customers

There are accounts 111, 112 (additional amount payable)

1. g) In case of purchasing tangible fixed assets such as houses and structures attached to land use rights, and putting them into immediate use for production and business activities, record:

Debit account 211 – Tangible fixed assets (original price of houses and structures)

Debit accounts 242, 213,… (original value of land use rights)

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331,…

1. h) In case of increase in tangible fixed assets due to completed construction investment: In case the completed construction project or construction item has been handed over and put into use, but the investment capital settlement has not been approved, the enterprise shall base on the original value of fixed assets at the provisional price to account for the increase in fixed assets (as the basis for calculating and depreciating fixed assets put into use). After the project or construction item is approved for settlement, if there is a difference compared to the provisional value of fixed assets, the enterprise shall make an adjustment to increase or decrease the difference in the original value of fixed assets.

– In case the construction investment process is accounted for on the same accounting system of the enterprise, when the construction work is completed, accepted, and handed over to put the asset into use for production and business, record:

Debit account 211 – Tangible fixed assets (original price of fixed assets formed through construction)

Debit accounts 152, 153, 242,… (materials, tools, equipment imported into warehouse or delivered) (use now)

Credit account 241 – Construction in progress.

– In case the construction investment process is not accounted for on the same accounting system of the enterprise (the investor enterprise has a separate accounting organization to monitor the construction investment process), when receiving the handover of the project from the project management board at the provisional price, record:

Debit account 211 – Tangible fixed assets (original price of fixed assets formed through construction)

Debit accounts 152, 153, 242,… (materials, tools, equipment in stock or put into immediate use)

Debit account 133 – Deductible VAT (if any )

Have account 136 – Internal receivables

There are accounts 331, 341,… (receive payables if any).

– In case after the settlement is approved, if there is a difference between the settlement price and the provisional price, the enterprise adjusts the increase or decrease of the original price of tangible fixed assets, recording:

+ In case of adjusting down the original price of fixed assets, record:

Debit account 138 – Other receivables (amount to be recovered not settled)

Have account​ 211 – Tangible fixed assets.

+ In case of increasing the original price of fixed assets, record:

Debit account 211 – Tangible fixed assets

There are related accounts.

1. i) Tangible fixed assets received through internal transfer within the enterprise:

– Unit mobilizing tangible fixed assets, record:

Debit account 1361, 411 (remaining value)

Debit account 214 – Depreciation of fixed assets (accumulated depreciation value)

Credit account 211 – Tangible fixed assets (original price)

– The unit receiving tangible fixed assets records:

Debit account 211 – Tangible fixed assets (original price)

Credit account 214 – Depreciation of fixed assets (accumulated depreciation value)

There are accounts 336, 411 (remaining value).

1. k) In case of investment and purchase of fixed assets using welfare funds, upon completion and putting into use for welfare activities, record:

Debit account 211 – Tangible fixed assets (total payment price)

Have the Accounts 111, 112, 331,…

– At the same time, record:

Debit account 3532 – Welfare fund

Account 3533 – Welfare fund has formed fixed assets.

1. l) Expenses incurred after initial recognition related to upgrading and renovating tangible fixed assets:

– For regular maintenance and repairs, based on relevant documents, record:

Debit accounts 623, 627, 641, 642,…

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112,…

– For periodic repair and maintenance of fixed assets:

+ When costs for periodic repair and maintenance of fixed assets arise, based on relevant documents, record:

Debit account 241 – Construction in progress (2413)

Debit account 133 – Deductible VAT (1332) (if any)

There are accounts 112, 152, 331, 334,…

+ When the repair and periodic maintenance work of fixed assets is completed and put into use, record:

Debit account 242 – Expenses awaiting allocation

Credit account 241 – Construction in progress (2413).

+ Periodically, allocate costs of periodic repair and maintenance of fixed assets to production and business expenses during the period, record:

Debit accounts 623, 627, 641, 642,…

Credit account 242 – Expenses awaiting allocation

– For upgrading and renovating fixed assets:

+ When costs for renovation and upgrading of tangible fixed assets arise, based on relevant documents, record:

Debit account 241 – Construction in progress (2414)

Debit account 133 – Deductible VAT ( 1332) (if any)

There are accounts 112, 152, 331, 334,…

+ When the renovation and upgrading work of fixed assets is completed and put into use:

Debit account 211 – Tangible fixed assets

Credit account 241 – Construction in progress (2414).

3.2. Accounting for the reduction of tangible fixed assets

The tangible fixed assets of an enterprise decrease due to sale, liquidation, loss, discovery of shortage during inventory, capital contribution, dismantling of one or several parts… In all cases of tangible fixed assets decrease, the enterprise must carry out all procedures, correctly determine the losses and income (if any). Based on related documents, the enterprise records according to each specific case as follows:

3.2.1. In case of selling fixed assets used for production and business: Fixed assets sold are usually fixed assets that are not needed or no longer needed or are considered ineffective, etc. When selling tangible fixed assets, the enterprise must fully carry out the necessary procedures according to the provisions of law. Based on the fixed asset handover minutes and documents related to the sale of fixed assets:

business activities , record:

– Reflecting income from sale of fixed assets, record:

Debit account 111, 112, 131 ,…

Credit account 711 – Other income (selling price excluding VAT)

Credit account 3331 – Value added tax payable (33311) (if any).

– Record reduction of sold fixed assets, based on Fixed Asset Handover Minutes :

Debit account 214 – Depreciation of fixed assets (2141) (accumulated depreciation value)

Debit account 811 – Other expenses (remaining value)

Credit account 211 – Tangible fixed assets (original price).

– When costs related to the sale of fixed assets arise, record:

Debit account 811 – Other expenses

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331,…

1. b) In case of sale of tangible fixed assets used for welfare activities:

– Based on the Fixed Asset Handover Minutes to record the decrease in sold fixed assets, record:

Debit account 353 – Reward and welfare fund (3533) (remaining value)

accumulated depreciation value )

Credit account 211 – Tangible fixed assets ( original price).

– At the same time, reflect the revenue from the sale of fixed assets, record:

In debt the Accounts 111, 112, 131,…

Credit account 353 – Reward and welfare fund (3532)

Credit account 333 – Taxes and amounts payable to the State (3331) (if any)

– Reflecting the expenses for the sale of fixed assets, record:

Debit account 353 – Reward and welfare fund ( 3532)

There are Account 111, 112,…

3.2.2. In case of liquidation of fixed assets:

Fixed assets to be liquidated are damaged fixed assets that cannot be used anymore, fixed assets that are technically outdated or not suitable for production and business requirements. When liquidating fixed assets, the enterprise must make a liquidation decision and establish a Fixed Asset Liquidation Council. The Fixed Asset Liquidation Council is responsible for organizing the liquidation of fixed assets in accordance with the order and procedures prescribed by law, the enterprise’s fixed asset management regime and making a “Fixed Asset Liquidation Record ” according to regulations. Based on the Fixed Asset Liquidation Record and documents related to revenues and expenditures for liquidation of fixed assets,… the enterprise records the book as in the case of selling fixed assets.

3.2.3. When contributing tangible fixed assets to a subsidiary, joint venture, associated company or investing in another entity, record:

Debit account 221, 222, 228 (according to revaluation value)

Debit account 214 – Depreciation of fixed assets (accumulated depreciation value)

Debit account 811 – Other expenses (the difference between the revaluation value and the remaining value of the fixed asset)

Credit account 211 – Tangible fixed assets (original price)

Credit account 711 – Other income (the difference between the revaluation value and the remaining value of the fixed asset).

3.2.4. Accounting for tangible fixed assets discovered to be surplus or shortage: In all cases of discovering surplus or shortage of fixed assets, the cause must be investigated. Based on the “Fixed Asset Inventory Summary Report” and the conclusion of the Inventory Council, the accounting must be accurate and timely, according to each specific cause:

1. a) Excess fixed assets detected:

Any case of discovering excess fixed assets at any stage of business must be recorded and the cause investigated. The enterprise shall base on the identified cause to handle and account for:

– If the cause of excess fixed assets is determined during the inventory, the reason for excess assets (due to mistakes in weighing, measuring, counting, forgetting to record, etc.) will be used to record in the accounting books. If the excess fixed assets are determined to belong to other enterprises during the inventory, the enterprise that owns the assets must be notified immediately. The enterprise does not record an increase in fixed assets and does not record it in the credit side of Account 338 – Other payables, but opens a detailed book to track excess fixed assets and presents it in the explanatory section of the Financial Statements.

– If the cause of excess fixed assets is unknown and must be processed, reflect the value of excess fixed assets for which the cause is unknown, record:

Debit account 211 – Tangible fixed assets

Credit account 338 – Other payables (3381).

+ When there is a decision from a competent authority on handling surplus tangible fixed assets of unknown cause, record:

Debit account 338 – Other payables (3381 )

There are related accounts.

1. b) Fixed assets found to be missing:

Any case of detecting a shortage or loss of fixed assets at any stage of business operations must be recorded and the cause investigated. Enterprises must base on the handling decision of the competent authority according to each cause to handle and record in the accounting books:

– If the cause of a shortage of fixed assets is immediately determined, the reason for the shortage (due to mistake, forgetting to record,…) will be used to record in the accounting books.

– In case of a fixed asset shortage, there is an immediate decision to handle it: Based on the approved “Minutes of handling missing fixed assets” and fixed asset records, the enterprise must accurately determine the original price and accumulated depreciation value of that fixed asset as a basis for recording a reduction in fixed assets and physically handling the remaining value of the fixed asset. Depending on the handling decision, record:

+ For fixed assets lacking for production and business, record:

Debit account 214 – Depreciation of fixed assets (accumulated depreciation value)

Debit accounts 111, 112, 334, 138 (1388) (if the person at fault must compensate)

Debit account 411 – Owner’s investment capital (if allowed to reduce capital)

Debit account 811 – Other expenses (if the business suffers losses)

There is account 211 – Tangible fixed assets.

+ For fixed assets lacking for welfare activities:

(+) Reflecting the decrease in fixed assets, record:

Debit account 214 – Depreciation of fixed assets (accumulated depreciation value)

Debit account 3533 – Welfare fund has formed fixed assets ( remaining value )

Credit account 211 – Tangible fixed assets (original price).

(+) For the remaining value of the missing fixed assets that must be recovered according to the handling decision, record:

Debit accounts 111, 112, 1388 (if the person at fault must compensate)

Debit account 334 – Payable to employees (if deducted from employee’s salary)

Credit account 3532 – Welfare fund.

– In case fixed assets are found to be missing but the cause has not been determined and is awaiting processing, record:

+ For fixed assets lacking for use in production and business activities:

(+) Reflect the decrease in fixed assets for the remaining value of the missing fixed assets, record:

Debit account 214 – Depreciation of fixed assets (2141) (accumulated depreciation value)

Debit account 138 – Other receivables (1381) (remaining value)

Credit account 211 – Tangible fixed assets (original price).

(+) When there is a decision to handle the remaining value of the missing fixed assets, record:

Debit accounts 111, 112 (received compensation)

Debit account 138 – Other receivables (1388) (if the person at fault must compensate)

Debit account 334 – Payable to employees (if deducted from employee’s salary)

Debit account 411 – Owner’s investment capital (if allowed to reduce capital)

Debit account 811 – Other expenses (if the business suffers losses)

Credit account 138 – Other receivables (1381).

+ For fixed assets lacking for welfare activities:

(+) Reflecting the decrease in fixed assets, record:

Debit account 214 – Depreciation of fixed assets (depreciation value)

Debit account 3533 – Welfare fund has formed fixed assets (remaining value)

There is account 211 – Tangible fixed assets (original price).

(+) At the same time, reflect the remaining value of the fixed assets into Account 1381 – Shortage of assets awaiting settlement, record:

Debit account 1381 – Asset shortage awaiting settlement

Credit account 3532 – Welfare fund.

(+) When there is a decision to handle compensation for the remaining value of the missing fixed assets, based on the handling decision, record:

Debit account 111, 334,…

Credit account 1381 – Asset shortage awaiting settlement.

3.2.5. For tangible fixed assets used for production and business but not meeting the recording standards as prescribed, they must be converted into tools and instruments, and recorded as follows:

Debit accounts 623, 627, 641, 642,… (if the remaining value is small)

Debit account 242 – Expenses awaiting allocation (if the remaining value is large, it must be gradually allocated)

Debit account 214 – Depreciation of fixed assets (accumulated depreciation value)

Credit account 211 – Tangible fixed assets (original price of fixed assets).

3.2.6 Accounting for sale and leaseback transactions of tangible fixed assets is an operating lease (see instructions in Account 811 – Other expenses or Account 711 – Other revenue).

 

ACCOUNT 212 – FINANCIAL LEASE FIXED ASSETS

1. Accounting principles
2. a) This account is used to reflect the current value and the increase and decrease of all financial leased fixed assets of the enterprise. This account is used for the enterprise that is the lessee to account for the original price of financial leased fixed assets (which are fixed assets that are not owned by the enterprise but the enterprise has the legal obligation and responsibility to manage and use them as assets of the enterprise).
3. b) Finance lease: Is a lease in which the lessor transfers most of the risks and rewards associated with ownership of the asset to the lessee. Ownership of the asset can be transferred at the end of the lease term.
4. c) The classification of a lease as a finance lease or an operating lease must be based on the nature of the terms stated in the contract. Example of a single situation or a combination that typically results in a lease transaction being classified as a finance lease as follows:

– The lessor transfers ownership of the asset to the lessee at the end of the lease term;

– At the inception of the lease, the lessee has the option to purchase the leased asset at a price estimated to be lower than its fair value at the end of the lease term;

– The lease term covers the major part of the economic life of the asset even if there is no transfer of ownership;

– At the inception of the lease, the present value of the minimum lease payments amounts to at least substantially all of the fair value of the leased asset;

– The leased assets are of a specialized type that only the lessee can use without requiring any major changes or repairs.

1. d) A lease contract is considered a finance lease contract if it satisfies at least one of the following three (3) conditions:

– If the lessee cancels the contract and compensates the lessor for any losses arising from the contract cancellation;

– Gain or loss resulting from changes in the fair value of the residual value of the leased asset associated with the lessee;

– The lessee has the ability to continue leasing the asset after the lease term expires at a rent lower than the market rent. In particular, the lease of land use rights is often classified as an operating lease.

1. d) The original cost of a finance leased fixed asset is recorded at the fair value of the leased asset or the present value of the minimum lease payment (in case the fair value is higher than the present value of the minimum lease payment) plus (+) the initial direct costs incurred related to the finance lease. If input VAT is deductible, the present value of the minimum lease payment does not include the VAT payable to the lessor.

When calculating the present value of the minimum lease payments for a lease, an enterprise can use the implicit interest rate, the interest rate stated in the lease contract or the lessee’s incremental borrowing rate.

1. e) The input VAT amount of financial leased assets that the lessee must pay to the lessor but is not deductible is accounted for as follows:

– If input VAT is not deductible but is paid in one lump sum at the time of recording the leased asset, the original price of the leased asset includes VAT;

– If input VAT is not deductible but is paid periodically, it is recorded in the production and business expenses of the period in accordance with the item reflecting the depreciation cost of the financial leased asset.

1. g) Do not reflect in this account the value of operating leased fixed assets.
2. h) If an enterprise has asset leasing transactions in which the terms of the contract are of the nature of a financial lease contract and the signing, content, and terms of implementation of such asset leasing contracts comply with the provisions of law, then the accounting for such asset leasing transactions shall be performed as guided in Clause 3 of this Article.
3. i) The lessee is responsible for calculating and depreciating fixed assets into production and business expenses periodically based on the application of a depreciation policy consistent with the depreciation policy of similar assets owned by the enterprise. If it is not certain that the lessee will have ownership of the leased asset when the lease contract expires, the leased asset will be depreciated over the lease term if the lease term is shorter than the useful life of the leased asset.
4. k) Account 212 is opened in detail to track each type and each leased fixed asset.
5. Structure and content of Account 212 – Financial leased fixed assets

Debtor :

Original price of financial leased fixed assets increased.

Creditor:

The original cost of a finance leased fixed asset decreases due to being returned to the lessor upon contract expiration or being repurchased as a fixed asset of the enterprise.

Debit Balance:

Original cost of existing financial leased fixed assets at the end of the accounting period maths.

Enterprises can open additional detailed accounts of Account 212 – Financial leased fixed assets (such as: Houses , structures; Machinery, equipment,…) to suit the characteristics of production and business activities and management requirements of their unit .

3. Accounting methods for some major economic transactions

3.1. When initial direct costs related to the financial leased asset arise before receiving the leased asset such as negotiation costs, contract signing costs…, record:

Debit account 242 – Expenses awaiting allocation

There are accounts 111, 112,…

3.2. When paying in advance for a financial lease or a deposit to secure the lease of an asset, record:

Debit account 341 – Loans and financial lease debts (3412) (prepaid rental amount)

Debit account 244 – Deposit, bet

There are accounts 111, 112,…

3.3. When receiving leased fixed assets, the enterprise shall base on the asset lease contract and related documents to reflect the value of leased fixed assets at the price excluding input VAT, and record:

Debit account 212 – Financial leased fixed assets (price excluding VAT)

Credit account 341 – Loans and financial lease liabilities (3412) (present value of minimum lease payments or fair value of leased assets excluding refundable taxes ) .

– Initial direct costs related to financial leasing activities are recorded in the original cost of financial leasing fixed assets, recorded:

In debt Account 212 – Financial leased fixed assets

Credit account 242 – Expenses awaiting allocation , or

There are accounts 111, 112,… (number of direct costs related to operations) lease arising when receiving leased fixed assets).

3.4. Periodically, when paying principal and interest to the lessor, record:

Debit account 635 – Financial expenses (interest paid for lease this period)

Debit account 341 – Loans and financial leases (3412) (principal paid this period)

There are accounts 111, 112,…

3.5. Upon receipt of the lessor’s invoice requesting payment of input VAT:

1. a) If VAT is deductible, record:

Debit account 133 – Deductible VAT (1332)

There are accounts 111, 112,… (if paid immediately)

Credit account 338 – Other payables (input VAT payable to the lessor).

1. b) If input VAT is not deductible, record:

Debit account 212 – Financial lease fixed assets (if input VAT is not deductible and VAT payment is made once at the time of recording financial lease fixed assets)

Debit account 627, 641, 642,… (if input VAT is not deductible, payment is made periodically upon receipt of invoice)

There are accounts 111, 112,… (if paid immediately)

Credit account 338 – Other payables (input VAT payable to the lessor).

3.6. When paying the capital commitment fee to the asset lessor, record:

Debit account 635 – Financial expenses

There are accounts 111, 112,…

3.7. When returning the leased fixed assets to the lessor according to the provisions of the lease contract, the enterprise shall record a decrease in the value of the leased fixed assets, recording:

Debit account 214 – Depreciation of fixed assets (2142)

Credit account 212 – Financial leased fixed assets.

3.8. In case the asset lease contract stipulates that at the end of the lease term, the lessee will purchase the leased asset, when receiving the transfer of ownership of the asset , the enterprise shall record a decrease in financial leased fixed assets and an increase in tangible fixed assets owned by the enterprise. When transferring from financial leased assets to assets owned by the enterprise, record:

Debit account 211 – Tangible fixed assets

Credit account 212 – Financial leased fixed assets (Original price of financial leased fixed assets)

There are accounts 111, 112,… (additional amount to be paid).

At the same time, transfer the accumulated depreciation value of fixed assets, record :

Debit account 2142 – Depreciation of leased fixed assets

Credit account 2141 – Depreciation of tangible fixed assets.

3.9. Accounting for sale and leaseback transactions of assets as finance leases:

1. a) Accounting for sales transactions (see Account 711 – Other income)
2. b) Recording leased assets and liabilities for financial leases, paying rent each period is carried out according to the provisions from clauses 3.1 to 3.6 of this Account.
3. c) Periodically, the enterprise calculates and depreciates financial leased fixed assets into production and business expenses, recording:

Debit account 623, 627, 641, 642,…

Credit account 2142 – Depreciation of leased fixed assets .

1. d) Periodically, transfer the difference between the selling price and the remaining value of the sold and leased back fixed assets:

– In case the selling price is greater than the remaining value of the sold and leased back fixed asset, the difference is recorded as a reduction in production and business expenses in the period in accordance with the asset lease term, recorded as follows:

Debit account 3387 – Revenue awaiting allocation

There are accounts 623, 627, 641, 642,…

– In case the selling price is less than the remaining value of the sold and leased back fixed asset, the difference is recorded as an increase in production and business expenses in the period, recorded as follows:

Debit accounts 623, 627, 641, 642,…

Credit account 242 – Expenses awaiting allocation.

 

ACCOUNT 213 – INTANGIBLE FIXED ASSETS

1. Accounting principles
2. a) This account is used to reflect the current value and the increase and decrease of intangible fixed assets of an enterprise. Intangible fixed assets are assets without physical form held by an enterprise for use in production and business, providing services or leasing to other entities, in accordance with the standards for recording intangible fixed assets .
3. b) The original cost of an intangible fixed asset is all costs that an enterprise must spend to acquire the intangible fixed asset up to the time the asset is put into a state capable of operating in the manner intended by the enterprise.

– The original cost of separately purchased intangible fixed assets, including the purchase price less (-) trade discounts or rebates, taxes (excluding refundable taxes) and costs directly attributable to bringing the asset to a state capable of operating in the manner intended by the enterprise;

– The original cost of an intangible fixed asset purchased in the form of exchange for a dissimilar intangible fixed asset or other asset is determined according to the fair value of the asset received or equal to the fair value of the asset exchanged after adjusting for additional cash or cash equivalents paid or received;

– The original price of intangible fixed assets is the right to use land, the original price of fixed assets is the amount the enterprise has paid to obtain the legal right to use land (including costs paid to the transferring organization or individual; compensation costs, site clearance, leveling, registration fees…) or according to the agreement of the parties when contributing capital. Determining intangible fixed assets as the right to use land must comply with the provisions of relevant laws guiding the management, use and depreciation of fixed assets;

– The original price of intangible fixed assets granted or donated by the State is determined according to the initial fair value plus (+) costs directly related to putting the asset into a state capable of operating in the manner intended by the enterprise;

– The original price of intangible fixed assets transferred between affiliated units within an enterprise is the original price recorded in the accounting books of the unit with the transferred assets.

1. c) For costs incurred during the research phase and development phase declare:

– All costs incurred during the research phase are not recorded as intangible fixed assets but are recorded as production and business costs in the period. period

– All costs incurred in the implementation phase that do not meet the conditions for recognition as intangible fixed assets are recorded in the production and business expenses of the period. In case the implementation results are considered to satisfy the definition and recognition criteria of intangible fixed assets prescribed in Vietnamese Accounting Standard No. 04 – Intangible fixed assets, the costs of the implementation phase are collected in Account 2412 – Basic construction. At the end of the implementation phase, the costs in the implementation phase that form the original value of intangible fixed assets are transferred to the Debit side of Account 213 – Intangible fixed assets.

Costs related to intangible assets that have been recorded by an enterprise as costs to determine business performance in the previous period shall not be re-recorded into the original cost of intangible fixed assets.

– If the enterprise cannot distinguish the research phase from the implementation phase to create intangible fixed assets, the enterprise must account for all costs incurred related to that project into production and business costs to determine business results for the period.

1. d) During the use process , the enterprise must depreciate intangible fixed assets into production and business costs according to the provisions of Vietnamese Accounting Standard No. 04 – Intangible fixed assets . Particularly for fixed assets that are land use rights, depreciation is only calculated for intangible fixed assets that are land use rights with a term.
2. d) Costs related to intangible fixed assets arising after initial recognition must be recorded as production and business costs in the period, unless they simultaneously satisfy the following two conditions, in which case they are recorded as an increase in the original cost of intangible fixed assets:

– The costs incurred are likely to cause the intangible asset to generate future economic benefits greater than the initially assessed level of performance;

– Costs are determined with certainty and are associated with specific intangible assets.

1. e) Business establishment costs, employee training costs, advertising costs, etc. incurred in the pre-operation period of a newly established business, and relocation costs are recorded in production and business expenses of the period.
2. g) The capital contribution of enterprises using intangible assets such as intellectual property rights, etc. is carried out in accordance with the provisions of law.
3. h) Intangible fixed assets are tracked in detail for each fixed asset recording object in the ” Fixed Asset Number “.
4. Structure and content of Account 213 – Intangible fixed assets

Debit side :

Original price of intangible fixed assets increased.

Creditor :

Original price of intangible fixed assets decreased.

Debit Balance:

Original price of intangible fixed assets existing at the enterprise at the end of the accounting period.

Enterprises can open detailed accounts for intangible fixed assets (such as fixed assets such as land use rights, copyrights , rights related to copyrights , industrial property rights , software, licenses, franchise licenses, etc.) to suit the characteristics of production and business activities and management requirements of their unit.

3. Accounting methods for some major economic transactions

3.1. Purchase of intangible fixed assets:

– In case of purchasing intangible fixed assets used for production and business of goods and services subject to VAT calculated by the deduction method, record:

Debit account 213 – Intangible fixed assets (purchase price excluding VAT)

Debit account 133 – Deductible VAT (1332)

There are accounts 112, 331, 341,…

– In case of purchasing intangible fixed assets used for production and business of goods and services not subject to VAT, record:

Debit account 213 – Intangible fixed assets (total payment price )

There are Account 112, 331,… (total payment amount).

3.2. In case of purchasing intangible fixed assets by deferred payment or installment payment:

– When purchasing intangible fixed assets by installment payment, record:

Debit account 213 – Intangible fixed assets (purchase price paid immediately)

Debit account 133 – Deductible VAT (1332) (if any)

There are accounts 111, 112, 331,…

– Periodically, reflect the interest on late payments and installment payments payable to the seller each period, record:

Debit account 635 – Financial expenses

Credit account 331 – Payable to sellers.

– Periodically, when paying the seller including principal and interest for late payment and installment payments, record:

Debit account 331 – Payable to sellers

There are accounts 111, 112

3.3. Intangible fixed assets purchased in the form of exchange.

1. a) In case of exchanging two similar intangible fixed assets:

When receiving an intangible fixed asset in exchange for a similar intangible fixed asset and putting it into immediate use for production and business, record:

Debit account 213 – Intangible fixed assets (original value of received intangible fixed assets is recorded according to the remaining value of the exchanged fixed assets )

Debit account 214 – Depreciation of fixed assets (2143) (accumulated depreciation value of fixed assets exchanged)

Credit account 213 – Intangible fixed assets (original cost of fixed assets taken away) exchange).

1. b) In case of exchanging two dissimilar intangible fixed assets:

– Record the decrease in intangible fixed assets exchanged , record:

Debit account 214 – Depreciation of fixed assets (accumulated depreciation value)

Debit account 811 – Other expenses (remaining value)

Credit account 213 – Intangible fixed assets (original price).

– At the same time, reflect the income from exchanging fixed assets, record:

Debit account 131 – Accounts receivable from customers (total payment amount)

Credit account 711 – Other income (fair value of exchanged fixed assets )

Credit account 3331 – VAT payable (33311) (if any).

– Record increase in intangible fixed assets received due to exchange , record:

Debit account 213 – Intangible fixed assets (fair value of received fixed assets)

Debit account 133 – Deductible VAT (1332) (if any)

Credit account 131 – Accounts receivable from customers (total payment amount).

3.4. Business establishment costs, employee training costs, advertising costs, etc. incurred in the pre-operational stage of a newly established business; costs in the research stage; costs in the implementation stage where the implementation results do not satisfy the definition and recognition standards of intangible fixed assets are accounted for in production and business costs in the period, record:

Debit account 642 – Business management costs

There are accounts 111, 112, 152, 153, 331 ,…

3.5. The value of intangible fixed assets is formed internally within the enterprise during the implementation phase when the implementation results are found to satisfy the definition and recognition standards of intangible fixed assets:

– Collect actual costs incurred in the implementation phase to form the original price of intangible fixed assets, record:

Debit account 241 – Construction in progress

Debit account 133 – Deductible VAT (1332) (if any)

There are accounts 111, 112, 152, 153, 331,…

– At the end of the implementation phase, the enterprise must determine the total actual costs incurred to form the original price of intangible fixed assets. In case the intangible fixed assets are handed over and put into use but have not been finalized (if any) according to regulations, the increase in intangible fixed assets shall be recorded at the provisional price, and recorded:

Debit account 213 – Intangible fixed assets

Credit account 241 – Construction in progress.

– When the settlement is approved, the enterprise must adjust the value of intangible fixed assets according to the settled price.

+ If the final price is greater than the provisional price, the enterprise adjusts the original price of intangible fixed assets and records:

Debit account 213 – Intangible fixed assets

There are related accounts.

+ If the final price is less than the provisional price, the enterprise adjusts the original price of intangible fixed assets and records:

Debits to related accounts

There is account 213 – Intangible fixed assets.

3.6. When purchasing intangible fixed assets such as land use rights along with purchasing houses and structures on the land, it is necessary to separately determine the value of intangible fixed assets such as land use rights and tangible fixed assets such as houses and structures, and record:

Debit account 211 – Tangible fixed assets (original price of houses and structures)

Debit account 213 – Intangible fixed assets (original cost of land use rights)

Debit account 133 – Deductible VAT (1332 – if any)

There are accounts 111, 112, 331,…

3.7. When an enterprise is supported, sponsored, donated, or given intangible fixed assets to be put into immediate use for production and business activities:

– When receiving supported, sponsored, donated or gifted intangible fixed assets, record:

In debt Account 213 – Intangible fixed assets

Credit account 711 – Other income (if supported, sponsored, donated, or given fixed assets without conditions and not subject to the case of recording an increase in the owner’s investment capital according to the decision of the competent authority)

Credit account 3387 – Revenue awaiting allocation (if supported, sponsored, donated, or given fixed assets with conditions attached)

Credit account 4118 – Other capital (if allowed to increase owner’s investment capital according to decision of competent authority).

– Expenses incurred related to intangible fixed assets receiving support, sponsorship, donations, or gifts (if any), record:

Debit account 213 – Intangible fixed assets

There are accounts 111, 112, 331,…

3.8. When an enterprise receives capital contribution in the form of land use rights, based on the land use rights transfer records, record:

Debit account 213 – Intangible fixed assets

Credit account 411 – Owner’s capital investment.

3.9. When there is a decision to change the purpose of use of investment real estate from land use rights to intangible fixed assets, record:

In debt Account 213 – Intangible fixed assets

Credit account 217 – Investment real estate.

At the same time , transfer the accumulated depreciation of investment real estate to the accumulated depreciation of intangible fixed assets, record:

Debit account 2147 – Depreciation of investment real estate

Credit account 2143 – Depreciation of intangible fixed assets.

3.10. When investing in subsidiaries, joint ventures, associates or contributing capital to other entities in the form of contributing capital with intangible fixed assets, based on the revaluation price of intangible fixed assets determined according to the provisions of the law on enterprises:

1. a) In case the revaluation value is less than the remaining value of the intangible fixed asset contributed as capital, record:

Debit account 221, 222, 228 (according to revaluation value )

Debit account 214 – Depreciation of fixed assets (2143) (accumulated depreciation value)

Debit account 811 – Other expenses (the difference between the revaluation price and the original price) residual value of intangible assets)

Credit account 213 – Intangible fixed assets (original price).

1. b) In case the revaluation price is greater than the remaining value of the intangible fixed asset contributed as capital, record:

Debit accounts 221, 222, 228 (according to revaluation value)

Debit account 214 – Depreciation of fixed assets (2143) ( accumulated depreciation value )

Credit account 213 – Intangible fixed assets (original price)

Credit account 711 – Other income (the difference between the revaluation price and the remaining value of the intangible fixed asset).

3.11. Accounting for the sale and liquidation of intangible fixed assets is performed similarly to accounting for the sale and liquidation of tangible fixed assets (see instructions in Account 211 – Tangible fixed assets).

 

ACCOUNT 214 – DEPRECIATION OF FIXED ASSETS

1. Accounting principles
2. a) This account is used to reflect the increase and decrease in depreciation value and accumulated depreciation value of fixed assets and investment real estate (IPR) during use due to depreciation of fixed assets, IPR and other increases and decreases in depreciation of fixed assets and IPR.
3. b) In principle, all fixed assets and investment real estate of enterprises related to production and business activities (including unused , unnecessary, unused assets awaiting liquidation, sale, etc.) or lease (unless fully depreciated) must be depreciated according to current regulations. Depreciation of fixed assets and investment real estate used in production and business is accounted for in production and business expenses in the period; depreciation of fixed assets used for construction investment activities is accounted for in construction investment expenses. In special cases where depreciation is not required (such as fixed assets reserved, fixed assets used for common use by society, etc.), enterprises must comply with current legal regulations. For fixed assets used for welfare purposes, depreciation is not required to be included in production and business expenses. Only calculate depreciation of fixed assets and record reduction in Welfare Fund that formed those fixed assets.
4. c) Based on the provisions of law and the management requirements of the enterprise, choose one of the methods of calculation and depreciation according to the provisions of law to suit each fixed asset in order to stimulate production and business development, ensure quick and complete capital recovery and be consistent with the method of recovering future economic benefits for that fixed asset of the enterprise.

The depreciation method applied to each fixed asset and investment property must be implemented consistently and can be changed when there is a significant change in the way the economic benefits of fixed assets and investment property are recovered.

1. d) Every year, when an enterprise has a major change in the expected useful life of a fixed asset or the way to recover benefits from a fixed asset, the enterprise needs to review the depreciation period and the method of depreciation of fixed assets. If the estimated useful life of an asset is significantly different from the previous estimates, the depreciation period must be changed accordingly. The method of depreciation of fixed assets is changed when there is a significant change in the way of estimating the recovery of economic benefits of a fixed asset. In this case, the enterprise must adjust the cost. Depreciation for the current year and subsequent years and must be disclosed in the Financial Statements.
2. d) For fixed assets that have been fully depreciated (capital has been fully recovered), but the enterprise is still using them for production and business activities, depreciation cannot be continued. Fixed assets that have not been fully depreciated (capital has not been fully recovered) but are damaged, unusable and need to be liquidated, etc., must determine the cause and responsibility of the collective or individual to handle compensation. The remaining value of the fixed assets that have not been recovered or compensated must be compensated by the proceeds from the liquidation of the same fixed assets, the compensation amount is decided by the enterprise’s leadership. If the proceeds from liquidation and compensation are not enough to compensate for the remaining value of the lost unrecovered fixed assets, the remaining difference is considered a loss from liquidation of fixed assets and is accounted for in other expenses. State-owned enterprises are handled according to the current financial policy for State-owned enterprises.
3. e) For intangible fixed assets, depreciation must be calculated based on the effective time from the time the fixed asset is put into use (according to the contract, commitment or decision of the competent authority). Particularly for intangible fixed assets being land use rights, depreciation is only deducted for land use rights with a determined duration of use. If the land use rights have an undetermined duration of use, no depreciation is deducted.
4. g) For financial leased fixed assets, during the use, the lessee must depreciate the fixed assets during the lease period according to the contract and include them in production and business costs, ensuring full capital recovery.
5. h) For investment real estate for operating lease, depreciation must be deducted and recorded in production and business expenses in the period. Enterprises can rely on real estate owned and used by the same type to estimate the depreciation time and determine the depreciation method for investment real estate. In case investment real estate is held for price increase, enterprises do not deduct depreciation but determine the loss due to decrease in value.
6. Structure and reflection content of Account 214 – Depreciation of fixed assets

Debit:

The depreciation value of fixed assets and investment real estate decreases due to liquidation, sale, capital contribution to other entities, etc. of fixed assets and investment real estate.

Creditor:

The depreciation value of fixed assets and investment real estate increases due to depreciation of fixed assets and investment real estate, due to receiving transfers of used fixed assets from internal units of the enterprise,…

Credit Balance:

Accumulated depreciation value of fixed assets and investment real estate currently owned by the enterprise at the end of the accounting period.

Account 214 – Depreciation of fixed assets, has 4 sub-accounts:

– Account 2 1 4 1 – Depreciation of tangible fixed assets: Reflects the depreciation value of tangible fixed assets during use due to depreciation of fixed assets and other increases and decreases in depreciation of tangible fixed assets.

– Account 2142 – Depreciation of leased fixed assets: Reflects the depreciation value of leased fixed assets during use due to depreciation of leased fixed assets and other increases and decreases in depreciation of leased fixed assets.

– Account 2143 – Depreciation of intangible fixed assets : Reflects the depreciation value of intangible fixed assets during use due to depreciation of intangible fixed assets and other increases and decreases in depreciation of intangible fixed assets.

– Account 2147 – Depreciation of investment real estate: This account reflects the depreciation value of investment real estate used for business leasing.

3. Accounting methods for some major economic transactions
4. a) Periodically calculate and deduct depreciation of fixed assets into production, business and other expenses, record:

Debit accounts 623 , 627, 641, 642, 811

Credit account 214 – Depreciation of fixed assets (appropriate level 2 account).

1. b) Fixed assets used or received due to transfer between affiliated units within the enterprise, record:

Debit account 211 – Tangible fixed assets (original price)

There are accounts 336, 411 (remaining value)

Credit account 214 – Depreciation of fixed assets (2141) (accumulated depreciation value).

1. c) Periodically calculate and depreciate investment real estate being leased for operation, record:

Debit account 632 – Cost of goods sold (details of real estate business expenses)

Credit account 214 – Depreciation of fixed assets (2147).

1. d) In case of reduction of fixed assets and investment real estate, simultaneously with recording the reduction of original price, the depreciated value of fixed assets and investment real estate must be recorded (see accounting instructions for Accounts 211 – Tangible fixed assets, Account 213 – Intangible fixed assets, Account 217 – Investment real estate).
2. d) For fixed assets used for welfare activities, when calculating depreciation at the end of the fiscal year, record :

Debit account 3533 – Welfare fund has formed fixed assets

Credit account 214 – Depreciation of fixed assets.

1. e) In case at the end of the fiscal year, the enterprise reviews the depreciation period and method of depreciation of fixed assets. If there is a change in the depreciation rate, the depreciation amount recorded in the accounting books must be adjusted as follows:

– If due to change in depreciation method and depreciation period of fixed assets, the fixed asset depreciation rate increases compared to the amount deducted in the year, the depreciation difference increases, record:

Debit accounts 623, 627, 641, 642,… (increased depreciation difference)

Credit account 214 – Depreciation of fixed assets (appropriate level 2 account).

– If due to change in depreciation method and depreciation period of fixed assets, the fixed asset depreciation rate decreases compared to the amount deducted in the year, the difference in depreciation decreases, record:

Debit account 214 – Depreciation of fixed assets (appropriate level 2 account)

There are accounts 623, 627, 641, 642,… (decreased depreciation difference).

 

ACCOUNT 215 – BIOLOGICAL ASSETS

1. Accounting principles

1.1. This account is used to reflect the current value and the increase and decrease of (i) biological assets related to agricultural activities (including biological assets created/born from perennial plants for the enterprise’s periodic products); (ii) agricultural products at the time of harvest.

This account is not used to reflect the current value and the increase and decrease of perennial plants for periodic products and working animals (for example, animals raised in circuses for circus performances, raised in zoos for visitors such as tigers, leopards, lions, monkeys , whales , service dogs raised to perform tasks as required,…). Perennial plants for periodic products and working animals are reflected in Account 211 – Tangible fixed assets.

In there:

– Biological assets are living plants or animals associated with the management of the enterprise in biological transformation processes that can then be converted into agricultural products or create other biological assets.

– Biological transformation includes the processes of growth, degradation, production and reproduction that result in changes in the quantity or quality of a biological asset.

– Agricultural activity is the activity of managing biological transformation to harvest biological assets for sale or for processing into agricultural products or to generate other biological assets. Agricultural activity includes diverse activities, for example: growing crops (growing annual crops, perennial crops, orchards) Trees, flower gardens, plantations,…) animal husbandry (aquaculture, cattle, poultry,…). Animals raised for work or fishing in the ocean , … are not considered agricultural activities.

– Agricultural products are products harvested from the biological assets of the enterprise (tea leaves are harvested from tea bushes, cow’s milk is harvested from cows, eggs are harvested from egg-laying hens, etc.). After harvest, these products are no longer biological assets but become inventories of the enterprise. Accordingly, the process of processing agricultural products after harvest of the enterprise (for example, the process of fermenting and processing grapes to become wine, etc.) is the process of processing inventories and is accounted for according to Vietnamese Accounting Standard No. 02 – Inventories and guiding documents.

1.2. Biological assets of an enterprise include the following types:

– Perennial plants for periodic products: Are perennial plants, used in the production or supply of agricultural products; expected to produce products for more than one accounting period and are unlikely to be sold as agricultural products, except in the case of sudden liquidation. (For example, tea bushes/tea gardens, grape trees/gardens, coconut palm trees/gardens, rubber trees/gardens, …) usually meet the definition of fixed assets and should be accounted for as tangible fixed assets of the enterprise. However, products created from perennial plants for periodic products such as tea leaves, grapes, coconut palms, rubber latex, … when not yet harvested are biological assets.

– Crops grown for one-time products (for example, timber trees such as acacia, eucalyptus, mahogany, rosewood, etc.); annual seasonal crops (for example, corn, rice, wheat, potatoes, vegetables, etc.).

– Livestock raised for meat, one-time products (fish, pigs, cows, chickens, etc. raised for meat) and livestock raised for periodic products (e.g. dairy cows, egg-laying chickens, wool-producing sheep, breeding shrimp, breeding chickens, breeding fish, breeding pigs, etc.).

The following example table illustrates the classification between biological assets, agricultural products and agricultural products processed after harvest. However, in practice, the classification of a biological asset as a perennial plant for periodic products depends not only on the name but also on the characteristics , properties and ways of recovering benefits from that biological asset of the enterprise.

Fixed assets​	Biological assets	Agricultural products	Products processed after harvest
Cotton plant	Unharvested cotton	Cotton is harvested	Products made from cotton such as thread , clothes,…
Sugarcane dust	Sugarcane not harvested yet	Sugarcane is harvested	Products processed from sugarcane such as sugar,…
Tobacco plant	Unpicked tobacco leaves	Picked leaves	Products made from tobacco leaves such as dried tobacco fibers,…
Tea bushes	Unpicked tea leaves	Picked leaves	Products made from tea leaves such as dried tea,…
Vine	Unharvested grapes	Grapes are harvested	Products made from grapes such as wine,…
Fruit trees	Fruit on the tree has not been harvested yet.	Fruits are harvested	Products made from fruits such as canned pineapple,…
Oil palm tree	Unpicked fruit	Picked fruit	Products made from oil palm fruit such as palm oil
Rubber tree	Unharvested rubber latex on trees	Harvest compost​	Products made from rubber such as tires, rubber mattresses, medical gloves,…
	Trees grown in forests for timber	The tree has been cut down	Logs, sawn timber
	Dairy cow	Expressed milk	Dairy products​
	Pig	Pork	Pork products
	Sheep	Hair	Yarn, carpet

1.3. Accounting principles for biological assets

1.3.1. For perennial plants that produce periodic products, working animals are accounted for according to the instructions in Account 211 – Tangible fixed assets.

1.3.2. For remaining biological assets other than perennial plants for periodic products or working animals:

1. a) Livestock for periodic products: Accounting is similar to that for fixed assets. Accordingly:

– The costs of purchasing, caring for, raising these animals,… incurred from the beginning until the maturity stage (ready for production or ready for sale) (The ability to perform specific tasks according to technical requirements) is included in the original cost of biological assets.

– When the biological asset reaches the mature stage (the biological asset reaches the stage technically in the way intended by the enterprise, such as to create new biological products (e.g. egg-laying hens, pregnant cows, etc.),… the enterprise begins to depreciate the biological asset on the basis of the depreciable value. The method of determining the depreciable value of the parent biological asset is similar to the depreciation of the enterprise’s fixed assets.

– When a parent biological asset begins to produce products (e.g., egg-laying hens, milk-producing cows, etc.) or gives birth to other biological assets (mother cows giving birth to calves, etc.): The original cost of the newly created biological asset ( calves, chicken eggs, cow milk, etc.) must include the care and nurturing costs incurred during the period for that new biological asset and the depreciation costs of the parent biological asset. The allocation of care and nurturing costs during the period for related biological assets (parent biological assets, newly created biological assets, agricultural products, etc.) must be based on the characteristics, properties, management requirements, and methods of recovering economic benefits from the enterprise’s biological assets. The enterprise must consistently apply the selected method to allocate care and nurturing costs during the period for related biological assets through accounting periods and must explain the selected method in the Financial Statements.

– When preparing and presenting the Financial Statements, the value of biological assets such as livestock for periodic products must be presented as long-term assets on the Financial Statements of the enterprise.

At the end of the accounting period: In case there is an indication or evidence that these biological assets are damaged or the net realizable value is lower than the book value of the biological assets, the enterprise must set up a provision for asset loss.

1. b) Livestock that produces products once

– All costs of purchase, care, maintenance,… incurred directly related to these assets are included in the original cost of biological assets.

– At the end of the accounting period: In case there is any sign or evidence that these assets are lost or the net realizable value is lower than the book value of the biological assets, the enterprise must set up a provision for the loss of biological assets.

– In case of livestock raised for one-time product production with an expected harvest time of 12 months or less or within a normal business cycle from the end of the accounting period, these biological assets are presented as assets. short-term assets on the Statement of Financial Position of the enterprise. For livestock raised for one-time product production, the remaining are presented as long-term assets on the Statement of Financial Position of the enterprise.

1. c) Seasonal crops or one-time products:

– All costs of purchase, cultivation, care, etc. directly related to these assets are included in the original cost of biological assets. In case these costs do not increase the future economic benefits of the enterprise, they must be recorded as production and business costs in the period. period​

– At the end of the accounting period: In case there is an indication or evidence that these assets are damaged or the net realizable value is lower than the book value of the biological assets, the enterprise must set up a provision for asset loss.

– In case of seasonal crops or one-time products with an expected harvest time of 12 months or less or within a normal business cycle from the end of the accounting period, these biological assets are presented as short-term assets on the financial position statement of the enterprise. For seasonal crops or one-time products remaining, they are presented as long-term assets on the financial position statement of the enterprise.

1.4. In case the costs of purchasing, cultivating, caring , etc. arise and do not create or are not related to specific biological assets, and do not increase the future economic benefits of the enterprise (for example, researching new types of biological assets), they must be recorded as production and business costs in the period.

1.5. Depending on the characteristics of each type of biological assets of the enterprise in the production and business process and the management requirements of the unit, enterprises should organize the management, detailed monitoring and accounting of biological assets accordingly.

The purchase, investment, asset classification, depreciation , liquidation procedures, and sale of perennial gardens, working animals and/or products of state-owned enterprises shall comply with the guidance of the law on state-owned enterprises.

1.6. Enterprises shall explain on their financial statements the information for biological assets as prescribed:

1. a) Description of biological assets whose value accounts for 10% or more of the total value of biological assets: nature and characteristics of each type of biological asset, accounting policies applied to each type of biological asset,…
2. b) Method of allocating care and cultivation costs during the period for parent biological assets, newly created biological assets, agricultural products, etc .;
3. c) Method of depreciation of biological assets;
4. d) Useful life or depreciation rate of biological assets;
5. d) Total book value and accumulated depreciation value at the beginning and end of the accounting period;
6. e) Provisions for loss of biological assets (if any);
7. g) Value of biological assets used as collateral to secure payable debts at the end of the period;
8. h) Commitments to invest in or purchase biological assets;
9. i) Changes such as disclosure of fair value less costs to sell of observable and measurable biological assets (if any).
10. Structure and content of Account 215 – Biological assets

Debtor :​

– The value of biological assets increases due to actual purchases, care, cultivation, etc. incurred during the period.

Creditor:

– The value of biological assets decreases due to depreciation, sale, liquidation, loss, use for business activities,…

Debit Balance:

The value of the enterprise’s existing biological assets at the end of the accounting period.

Account 215 has 3 sub-accounts :

– Account 2151 – Livestock for periodic products. This account has 2 sub-accounts:

+ Account 21511 – Livestock for periodic products that have not reached maturity;

+ Account 21512 – Livestock for periodic products to maturity, this account includes 2 level 4 accounts : Account 215121 – Original price ; Account 215122 – Accumulated depreciation value .

– Account 2152 – Livestock for one-time product collection.

– Account 2153 – Seasonal crops or one-time products.

Enterprises can open additional detailed accounts Account 215 – Biological assets to track each type of biological asset in accordance with the characteristics of production and business activities and management requirements of their unit.

3. Accounting methods for some major economic transactions

3.1. For livestock that produce products periodically:

1. a) When the enterprise incurs costs for purchasing, caring for, and nurturing these biological assets up to the maturity stage (beginning to reach the technical stage to create new biological products), based on related documents, record:

Debit account 215 – Biological assets (21511)

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331, 334, 338, …

1. b) When the biological asset is a periodically produced animal that reaches maturity, begins to be in a working state or reaches a stage where it is technically possible to produce a new biological product:

– Transfer of biological assets from livestock for periodic products that have not reached maturity to livestock for periodic products that have reached maturity , record:

Debit account 21512 – Working animals or animals that periodically produce products reaching maturity

Account 21511 – Working animals or animals that periodically produce products that have not yet reached adulthood.

– Accounting or allocating care, cultivation and other costs arising after the maturity stage for newly created biological assets according to appropriate criteria depending on the characteristics of the biological assets and production and business activities as well as the management requirements of the enterprise:

Debit account 215 – Biological assets (details for each type of related biological assets)

Debit account 133 – Deductible VAT (if any)

There are Accounts 111, 112, 331, 334, 338,…

1. c) Depreciation of livestock for periodic products reaching maturity stage is allocated to newly created biological assets according to appropriate criteria depending on the characteristics of biological assets and production and business activities as well as the management requirements of the enterprise:

Debit account 215 – Biological assets (details for each type of biological assets)

Credit account 215122 – Accumulated depreciation value.

1. d) When the new biological asset reaches harvest:

– If the enterprise converts new biological assets into agricultural products for further processing, record:

Debit accounts 152, 154,…

There is account 215 – Biological assets (details for each type of new biological asset).

– If the enterprise sells the new biological assets immediately without moving to the processing stage:

+ Reflects cost of goods sold:

Debit account 632 – Cost of goods sold

There is account 215 – Biological assets (details for each type of biological asset).

+ Reflects revenue from sale of biological assets:

Debit account 111, 112, 131, …

Credit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and amounts payable to the state (if any).

3.2. For animals raised for single-use products:

1. a) During the period, when the enterprise incurs costs for purchasing, caring for, and cultivating biological assets, based on related documents, record:

Debit account 215 – Biological assets (2152)

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331,…

1. b) When biological assets reach harvest time, if the enterprise converts biological assets into agricultural products for further processing, record:

Debts Accounts 152, 154,…

Credit account 215 – Biological assets (2152).

1. c) In case an enterprise immediately sells biological assets when it is time to harvest without moving to the processing stage, record:

– Reflecting cost of goods sold, record:

Debit account 632 – Cost of goods sold

Credit account 215 – Biological assets (2152) .

– Reflecting revenue from sale of biological assets, record:

Debit accounts 111, 112, 131,…

Credit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and amounts payable to the state (if any).

1. d) In case an enterprise uses biological assets to serve its operations (for example, sales, research, giving, donating, etc.), based on the purpose of using biological assets and related documents, record:

Debit accounts 641, 642,…

Credit account 215 – Biological assets

Credit account 3331 – Taxes and amounts payable to the state (if any).

3.3. For seasonal crops or one-time product harvesting; Accounting is similar to that for livestock for one-time product harvesting as instructed in section 3.2 mentioned above.

3.4. For perennial plants that produce periodic products and working animals: Accounting is performed according to the instructions in Account 211 – Tangible fixed assets .

 

ACCOUNT 217 – INVESTMENT REAL ESTATE

1. Accounting principles

1.1. This account is used to reflect the current value and the increase or decrease in the investment real estate (RE) of the enterprise at its original price, which is tracked in detail for each object similar to fixed assets. REI includes: Land use rights, houses or part of houses or both houses and land, infrastructure held by the owner or lessee of the asset under a financial lease contract for the purpose of earning profits from renting or waiting for price increase, not for:

– Use in the production or supply of goods or services or for administrative purposes; or

– Sold in the normal course of production and business.

1.2. This account is used to reflect the value of real estate that qualifies for recognition as investment real estate. This account does not reflect the value of real estate held for sale in the ordinary course of business or under construction for sale in the near future, real estate used by the owner, real estate in the process of construction that has not been completed with the purpose of being used in the future as investment real estate.

real estate is recognized as an asset when it satisfies both of the following conditions:

– Certain to gain economic benefits in the future; and

– Original cost must be determined reliably.

1.3. Investment real estate is recorded in this account at its original cost. The original cost of investment real estate is the total cost (cash or cash equivalents) that the enterprise spends or the fair value of other amounts given in exchange to acquire the investment real estate up to the time of purchase or completion of construction of that investment real estate.

– Depending on each case, the original price of investment real estate is determined as follows:

+ The original cost of purchased investment real estate includes the purchase price and costs directly related to the purchase, such as: Consulting service fees, registration fees and other related transaction costs,…

+ The original cost of self-constructed investment real estate is the actual cost and directly related costs of the investment real estate up to the date of completion of construction work;

+ In case the financial leased real estate for the purpose of operating lease satisfies the recognition criteria as investment real estate, the original cost of that investment real estate at the time of the initial lease shall be implemented according to the provisions of Vietnamese Accounting Standard No. 06 – Leases.

– The following costs are not included in the original price of investment real estate:

+ Initial costs incurred but not necessary to bring the investment real estate into a state capable of operating in the manner intended by the enterprise;

+ Costs when first putting the investment real estate into operation before the investment real estate reaches the expected normal operating state;

+ Abnormal costs of raw materials, materials, labor or other resources in the process of constructing real estate.

1.4. Expenses related to investment property arising after initial recognition must be recorded as production and business expenses in the period, unless these expenses are likely to make the investment property generate more economic benefits in the future than the initially assessed level of operation, then they are recorded as an increase in the original cost of the investment property.

1.5 During the operating lease period, investment real estate must be depreciated and recorded as business expenses during the period (including during the period of suspension of leasing). Enterprises can rely on real estate of the same type used by the owner to estimate the depreciation period and determine the appropriate depreciation method for investment real estate.

– In case the real estate leasing enterprise receives rental payments in advance for many periods, the recognition of revenue from real estate leasing services is carried out according to the principle of allocating the rental payment received in advance in accordance with the leasing period.

– Depreciation costs of investment real estate and other costs directly related to leasing, such as: Outsourcing service costs, salary costs of employees directly managing the leased real estate, depreciation costs of auxiliary works serving the leasing of investment real estate, etc. are included in the cost price of investment real estate leasing services.

1.6. Enterprises do not depreciate investment real estate held for appreciation (except for investment real estate in the lease period). In case there is solid evidence that investment real estate has decreased in value compared to market value and the decrease is reliably determined, the enterprise is assessed reduce the original cost of investment real estate and record the loss in the cost of goods sold (similar to setting up a provision for real estate goods).

At the end of the accounting period, if there is certain and reliable evidence that the investment real estate discount no longer exists, the enterprise is allowed to increase the original value of the investment real estate and reduce the cost of goods sold by a maximum amount equal to the recorded reduction and not exceeding the original cost of the investment real estate.

1.7. For investment properties that are purchased but must be constructed, renovated, or upgraded before being used for investment purposes, the value of the property, the purchase cost, and the cost of construction, renovation, or upgrading of the investment property are reflected in Account 241 – Construction in progress. When the construction, renovation, or upgrading process is completed, the original cost of the completed investment property must be determined to be transferred to Account 217 – Investment property .

1.8. The transfer from owner-occupied real estate to investment real estate or from investment real estate to owner-occupied real estate or inventory is only when there is a change in the purpose of use as in the following cases:

– Investment real estate is converted into owner-occupied real estate when the owner begins to use this property;

– Investment real estate is converted into inventory when the owner begins to develop it for the purpose of sale;

– Owner-occupied real estate is converted into investment real estate when the owner stops using the property to lease it to another party for operations;

– Inventory is converted into investment real estate when the owner begins to lease it to another party for operation;

– Construction real estate is converted into investment real estate when the construction phase is completed, handed over for investment activities for lease or held for price increase for sale (during the construction phase, it must be accounted for according to Vietnamese Accounting Standard No. 03 – Tangible fixed assets).

The conversion of use purpose between investment real estate and owner-occupied real estate or inventory does not change the book value of the converted asset and does not change the original cost of the real estate in determining value or preparing Financial Statements.

1.9. When an enterprise decides to sell an investment property without any repair, renovation or upgrading phase, the enterprise will continue to record it as investment property in Account 217 – Investment property until the investment property is sold without converting it into inventory.

1.10. Profits or losses arising from the sale of investment real estate are determined by the difference between revenue and expenses directly related to the sale. Investment real estate and the remaining value of investment real estate. This profit or loss is presented as a net amount on the Income Statement for the period (In case of sale and leaseback of investment real estate assets, it is carried out in accordance with the provisions of Vietnamese Accounting Standard No. 06 – Leases).

– Revenue from the sale of investment real estate is the selling price excluding VAT in cases where the enterprise pays VAT calculated by the tax deduction method.

– In case of selling investment real estate by installment payment , the revenue from selling investment real estate is determined based on the cash price (the selling price does not include VAT for enterprises paying VAT calculated by the tax deduction method). Periodically, enterprises record the interest on installment payments in the financial revenue of each period. Information on interest on installment payments when selling investment real estate by installment payment must be monitored in detail in the accounting books and explained in the financial statements of the enterprise (total interest on installment payments, deferred payments receivable, interest collected and interest receivable).

1.11. Enterprises record a decrease in investment real estate in the following cases:

– Change the purpose of use from investment real estate to inventory or to owner-occupied real estate;

– Sale and liquidation of investment real estate;

– Upon expiration of the financial lease term, the investment real estate will be returned to the lessor.

2. Structure and content of Account 217 – Investment real estate

Debit:

Original price of investment real estate increased during the period.

Side C :

Original price of investment real estate decreased during the period.

Debit Balance:

Original cost of existing investment real estate at the end of the accounting period.

3. Accounting methods for some major economic transactions

3.1. When buying investment real estate:

1. a) In case of buying investment real estate and paying immediately, if input VAT is deductible, record:

Debit account 217 – Investment real estate

Debit account 133 – Deductible VAT (1332)

There are accounts 111, 112.

In case input VAT is not deductible, the original price of investment real estate includes VAT.

1. b) Purchase of investment real estate by installment payment:

– When purchasing real estate by installment payment, record:

Debit account 217 – Investment real estate (purchase price paid immediately)

Debit account 133 – Deductible VAT (1332) (if any)

There are Accounts 111, 112, 331,…

– Periodically, reflect the interest on deferred payment and installment payments of real estate investment payable to the seller in the financial expenses of each period, record:

Debit account 635 – Financial expenses

Credit account 331 – Payable to sellers.

– Periodically, when paying the seller including principal and interest for late payment and installment payments, record:

Debit account 331 – Payable to sellers

There are accounts 111, 112

3.2. In case of investment real estate formed due to completed basic construction, deliver:

– When construction costs of investment real estate arise, based on related documents and vouchers, the enterprise collects costs into the Debit side of Account 241 – Unfinished Construction (similar to basic construction of tangible fixed assets, as instructed in section Account 211 – Tangible fixed assets ) .

– When the construction investment phase is completed and the investment assets are transferred into real estate, the accountant shall base on the handover documents and record:

Debit account 217 – Investment real estate

Have account​ 241 – Construction in progress.

3.3. When converting from owner-occupied real estate or inventory into investment real estate, the enterprise shall record in the conversion of use purpose file:

1. a) In case of converting fixed assets into investment real estate for lease or investment real estate held for price increase, record:

Debit account 217 – Investment real estate

There are accounts 211, 213,…

At the same time, transfer the accumulated depreciation, record:

Debit account 2141, 2143

Credit account 2147 – Depreciation of investment real estate

1. b) When converting from inventory to investment real estate, based on the conversion records of purpose of use, record:

Debit account 217 – Investment real estate

There are accounts 155 and 156.

3.4. When an enterprise leases real estate under a financial lease method for the purpose of leasing under one or more operating lease contracts, if the leased property satisfies the criteria of investment real estate:

1. a) Based on the financial lease contract and related documents, record:

Debit account 217 – Investment real estate

There are accounts 111, 112, 3412,…

(Accounting for transactions related to financial leasing of investment real estate is performed similarly to the instructions in Account 212 – Financial leasing fixed assets).

1. b) When the asset lease term expires under the financial leasing method

– If returning financial leased assets classified as investment real estate, record:

Debit account 2147 – Depreciation of investment real estate

Debit account 632 – Cost of goods sold (difference between original price of leased investment real estate and accumulated depreciation) (if any)

Credit account 217 – Investment real estate (original cost).

– If buying back financial leased real estate classified as investment real estate for continued investment, the additional amount to be paid is recorded as an increase in the original cost of the investment real estate, recorded as follows:

Debit account 217 – Investment real estate

There are accounts 111, 112,…

– If purchasing financial leased real estate classified as investment real estate to use for production, business or management activities of the enterprise, it must be reclassified as owner-occupied real estate, recorded :

Debit account 211 – Tangible fixed assets , or

Debit account 213 – Intangible fixed assets

Credit account 217 – Investment real estate

There are accounts 111, 112 (additional amount payable).

At the same time, transfer the accumulated depreciation, record:

Debit account 2147 – Depreciation of investment real estate

There are accounts 2141 and 2143.

3.5. When costs arise after the initial recognition of investment property, if they satisfy the conditions for capitalization or the asset purchase price includes the enterprise’s obligations to incur the necessary costs that will arise to bring the investment property to a state capable of operating in the manner intended by the enterprise, these costs are also recorded as an increase in the original cost of investment property:

– Collect actual costs incurred after initial recording (upgrading, renovating investment real estate), record:

Debit account 241 – Construction in progress

Debit account 133 – Deductible VAT (1332) (if any)

There are accounts 111, 112, 152, 331,…

– When the investment real estate upgrading, renovation,… activities are completed, the original value of the investment real estate is increased and recorded as follows:

Debit account 217 – Investment real estate

There is account 241 – Construction in progress.

3.6. Accounting for the sale and liquidation of investment real estate held for lease or held for price increase for sale:

1. a) Recording revenue from sale and liquidation of investment real estate:

Debts Account 111, 112, 131 (total payment amount)

Credit account 511 – Sales revenue and service provision (selling price excluding VAT)

Credit account 333 – Taxes and amounts payable to the State (if any).

1. b) Record the original cost and remaining value of the sold investment real estate:

Debit account 2147 – Depreciation of investment real estate (2147) (if any)

Debit account 632 – Cost of goods sold (remaining value of investment real estate)

Credit account 217 – Investment real estate (original cost of investment real estate).

1. c) When costs of selling investment real estate arise, based on relevant accounting documents, record:

Debit account 632 – Cost of goods sold ( remaining value of investment real estate )

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331,…

1. d) At the end of the period, carry forward to offset the selling price with the remaining value and the cost of selling and liquidating the investment real estate to determine the profit/loss of the sale and liquidation of the investment real estate:

– In case of profit:

Debit account 511 – Sales revenue and service provision (selling price, liquidation of investment real estate)

Credit account 632 – Cost of goods sold (remaining value + selling and liquidation costs of investment real estate)

Credit account 911 – Determine business results (profit)

– In case of loss:

Debit account 511 – Sales revenue and service provision (selling price, liquidation of investment real estate)

Debit account 911 – Determine business results (loss)

Credit account 632 – Cost of goods sold (remaining value + selling and liquidation costs of investment real estate)

When preparing and presenting the Business Performance Report, enterprises base on the profit or loss after offsetting revenue with the remaining value and Cost of selling and liquidating investment real estate to be presented in the indicator “Profit/loss of selling and liquidating investment real estate”.

3.7. Accounting for leasing of real estate investment activities

1. a) Recording revenue from leasing investment real estate:

Debit accounts 111, 112, 131,…

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (33311) (if any).

1. b) Recording the cost of rental real estate investment

Debit account 632 – Cost of goods sold

Credit account 2147 – Depreciation of investment real estate

There are accounts 111, 112, 331,335,…

3.8. Accounting for converting investment real estate into inventory or into owner-occupied real estate:

1. a) In case investment real estate is converted into inventory when the owner decides to repair, renovate and upgrade for sale:

– When there is a decision to repair, renovate, or upgrade investment real estate for sale, the enterprise transfers the remaining value of the investment real estate to Account 156 – Goods, recording:

Debit account 156 – Goods (Remaining value of investment real estate)

Debit account 2147 – Depreciation of investment real estate (if any)

Credit account 217 – Investment real estate (original cost).

– When incurring repair, renovation, and upgrade costs for the purpose of sale, record:

Debit account 154 – Cost of production and unfinished business

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 152, 334, 331,…

– At the end of the repair, renovation, and upgrade phase for the purpose of sale, transfer all costs to increase the original price of real estate goods awaiting sale , record:

Debit account 156 – Goods (Real estate goods)

Credit account 154 – Cost of production and business in progress.

1. b) In case of converting investment real estate into owner-occupied real estate, record:

Debit account 211, 213

Credit account 217 – Investment real estate.

At the same time, transfer accumulated depreciation, record:

Debit account 2147 – Depreciation of investment real estate (if any)

There are accounts 2141, 2143.

3.9. For investment real estate held for price increase, enterprises do not depreciate but determine the loss of investment real estate reflected in cost of goods sold if there is evidence that the value of investment real estate has decreased, recording:

Debit account 632 – Cost of goods sold

Credit account 217 – Investment real estate.

3.10. When there is certain and reliable evidence that the investment real estate discount no longer exists, the enterprise shall reverse the entry to record a reduction in cost of goods sold as follows:

Debit account 217 – Investment real estate

Credit account 632 – Cost of goods sold

 

PRINCIPLES OF
ACCOUNTING FOR INVESTMENTS IN OTHER ENTITIES

1. Investments in other entities include investments in subsidiaries, joint ventures, associated companies and other capital contributions with the purpose of holding long-term. Investments can be made in the following forms:
2. a) Investment in the form of capital contribution to another entity (by the invested party raising capital): Under this form, the assets of the capital contributor are recorded in the Financial Statement of the capital recipient;
3. b) Investment in the form of repurchasing capital contributions at other entities (repurchasing capital contributions of other owners): Under this form, the assets of the buyer (investor, transferee of capital contributions) are transferred to the seller (transferor of capital contributions) without being recorded in the Financial Statement of the investee.
4. When making investments using non-monetary assets, investors must base on the form of investment to apply appropriate accounting methods, specifically:
5. a) If the investment is in the form of capital contribution in the form of non-monetary assets, the value of the non-monetary assets contributed as capital must be determined reliably and in accordance with the market. The determination of the value of capital contribution in the form of non-monetary assets is carried out in accordance with the provisions of the law on enterprises and relevant laws. The difference (if any) between the revaluation value and the book value or the remaining value of the non-monetary assets contributed as capital shall be accounted for in other income or other expenses of the party contributing assets;
6. b) If the investment is in the form of buying back the capital contribution of another unit and paying the capital transferor with non-monetary assets:

– If the non-monetary asset used for payment is inventory, the investor must account for it as a transaction selling inventory in the form of barter (recording revenue and cost of inventory exchanged for the purchased capital);

– If the non- monetary asset used for payment is fixed assets or investment real estate, the investor must account for it as a liquidation or sale transaction of fixed assets or investment real estate (record revenue, other income, other expenses, etc.);

– If the assets used for payment are equity instruments (stocks) or debt instruments ( bonds , receivables…), the investor must account for the liquidation transaction of the sale of financial investments (recording profits and losses in financial revenue or financial expenses).

3. The cost of investments is reflected at original cost , including the purchase price plus (+) costs directly related to the investment (if any), such as: Transaction costs, brokerage, consulting, auditing, fees, taxes and bank fees… In the case of enterprises borrowing capital to invest in other units, the interest expense is recorded in financial expenses without being capitalized. In the case of investment in non-monetary assets, the cost of the investment is recorded at the fair value of the non-monetary assets at the time of occurrence.
4. Enterprises must open detailed books to track investments in each subsidiary, joint venture, associated company and each investment in other units. The time to record investments in other units is the time when the enterprise officially has ownership, specifically as follows:

– Listed securities are recorded at the time of order matching (T+0);

– Unlisted securities and other investments are recorded at the time of official ownership as prescribed by law.

5. Enterprises must fully and promptly account for dividends and profits distributed in the separate financial statements of investors at the time they are entitled to receive dividends and profits. For units that have registered and centrally deposited at the Vietnam Securities Depository and Clearing Corporation, the time when investors are entitled to receive dividends is the last registration date. For the remaining units, the time when investors are entitled to receive dividends and profits is determined according to the provisions of the Enterprise Law, the Enterprise Charter and relevant laws. Dividends and profits distributed in some cases are accounted for as follows:

5.1. For the investee:

1. a) The investee must record the payable dividends and profits at the time when it has no right to refuse to pay dividends and profits. In which:

– For enterprises subject to regulation by securities law, the time when the investee does not have the right to refuse to pay dividends is based on the provisions of securities law.

– For the remaining enterprises, the time when the investee does not have the right to refuse to pay dividends is based on the provisions of the Enterprise Law and the Enterprise Charter .

1. b) On the principles of accounting for dividends and profits payable:

– In case dividends and profits are paid in cash or non-cash assets, the investee shall record a decrease in undistributed post-tax profits and an increase in the amount payable for dividends and profits.

– In case the investee issues shares to pay dividends or distribute profits to owners or in other cases of using the owner’s capital, equity funds and other sources of equity to increase or supplement the charter capital, the enterprise shall record a decrease in undistributed profit after tax, sources of equity and record an increase in other capital when issuing shares or distributing profits. When being granted a Certificate of Business Registration, the enterprise shall record a decrease in other capital and an increase in the owner’s capital contribution .

Enterprises must present in the notes to the Financial Statements the cases where, at the end of the accounting period, the enterprise is carrying out or has completed transactions to increase or supplement charter capital but has not yet received the Certificate of Business Registration to record the increase in owner’s capital contribution in the financial statements.

5.2. For the investor:

1. a) In case dividends and profits are distributed in cash:

– The time when the investor records the receivable for dividends distributed in cash is the last registration date (for the investment recipient being a registered unit, centrally deposited at the Vietnam Securities Depository and Clearing Corporation) or records the receivable for dividends, profits on the date entitled to receive dividends, profits (for the investment recipient being the remaining units). In which:

+ Dividends and profits distributed in cash for the period after the investment date are recorded in financial operating revenue;

+ Dividends and profits distributed in cash for the period before the investment date are not included in financial operating revenue but are accounted for as a decrease in the value of the investment.

1. b) In case the investee pays dividends in shares or distributes profits to owners in the form of using other capital of the owner , funds belonging to equity, undistributed profit after tax to increase or supplement charter capital, the investor only monitors the number of increased shares or the value of increased charter capital of the enterprise at the investee on the notes to the Financial Statements, not recording the increase in the value of the investment in financial operating revenue.
2. c) For investors that are state-owned enterprises, the accounting for dividends and profits distributed when the investee pays dividends in shares or distributes profits to owners in the form of using other capital of the owner, funds belonging to equity, undistributed profits after tax to increase or supplement the charter capital of the enterprise at the investee, if there are provisions different from the principles specified in Point b, Clause 5.2 of this account, shall be carried out in accordance with the provisions of law for state-owned enterprises.
3. The cost of financial investments upon liquidation or sale is determined by the weighted average method. Upon liquidation, sale or recovery of capital contributions to subsidiaries, joint ventures or associates, based on the value of recovered assets, the enterprise shall reduce the book value of the investment. The difference between the fair value of recovered assets and the book value of the investment shall be recorded as financial income (if profitable) or financial expenses (if loss) .
4. Enterprises are not allowed to reclassify investments in subsidiaries, joint ventures, and associates into trading securities unless they have actually liquidated or sold the investment, resulting in loss of control over the subsidiary, loss of joint control over the joint venture, and no longer have significant influence over the associate.
5. In case the right to control, joint control, or significant influence is temporary, it must be determined at the time of initial recognition of the investment. In this case, the enterprise records the investment as an investment in capital contribution to another entity or trading securities, without recording receive investments in subsidiaries, joint ventures and associates.
6. When preparing the Financial Statements, the enterprise must determine the loss value of the investment in other units according to the instructions in Account 229 – Provision for asset loss to set up a provision for investment loss.

 

ACCOUNT 221 – INVESTMENT IN SUBSIDIARIES

1. Accounting principles
2. a) This account is used to reflect the current value and the increase or decrease in direct capital investment in a subsidiary. A subsidiary is a legal entity with independent accounting and is under the control of another entity (called the parent company).
3. b) For the purpose of accounting and preparing Financial Statements, only record in Account 221 – Investment in subsidiaries when the investor holds more than 50% of voting rights (except for the case in point c below) and has the right to control the financial policies and operations of another unit to gain economic benefits from the activities of that enterprise. When the parent company no longer has control over the subsidiary, record a decrease in the investment in the subsidiary. In case the investor temporarily holds more than 50% of voting rights at the unit but does not intend to exercise the voting rights because the investment purpose is to buy and sell capital instruments to make a profit (holding the investment for commercial purposes and the control is only temporary), do not record the investment in this account but record it as trading securities.
4. c) For the purpose of accounting and preparing Financial Statements, when the investor holds less than 50% of the voting rights at the investee, but has the following other agreement, the investment is still recorded in Account 221 – Investment in subsidiaries:

– Other investors agree to give the investor more than 50% of voting rights;

– Investors have the right to control financial and operating policies according to the agreed regulations;

– The investor has the right to appoint or remove the majority of the members of the Board of Directors or equivalent management level;

– Investors have the right to cast a majority of votes at meetings of the Board of Directors or equivalent management level.

1. d) In case of purchasing an investment in a subsidiary in a business consolidation transaction, the buyer must determine the purchase date, the cost of the investment and carry out accounting procedures in accordance with the provisions of Vietnamese Accounting Standard No. 11 – Business consolidation.
2. d) Accounting for investments in subsidiaries must comply with the accounting principles for investments in other entities prescribed in this Circular.
3. e) When liquidating, transferring, or recovering an investment in a subsidiary, the enterprise shall record a reduction in the investment in the subsidiary based on the ratio of the investment in the subsidiary that is liquidated, transferred, or recovered. The difference between the fair value of the assets obtained and the book value of the investment in the subsidiary Liquidation, sale or repossession of subsidiaries is recorded as financial revenue (if profitable) or financial expenses (if loss).
4. g) The fact that an enterprise intends to liquidate a subsidiary in the future shall not be considered as a parent company having temporary control over the subsidiary.
5. h) An investor may not have the right to dominate or control an investee, even if the investor holds a majority of the voting rights in that investee if those voting rights are not of any real significance. For example, an investor holding more than half of the voting rights in an investee may no longer have the right to dominate or control that investee if the relevant activities of that investee are subject to the management and supervision of the Government, the court, the management agency, the administrator or other parties (for example, after a competent authority has decided to open bankruptcy proceedings against that investee, etc.). In these cases, the enterprise must consider and assess whether the investor actually still has the right to dominate or control the investee.
6. Structure and content of Account 221 – Investment in subsidiaries

Debit:

Actual value of investments in subsidiaries increased.

Creditor:

Actual value of investments in subsidiaries decreased.

Debit Balance:

Actual value of investments in subsidiaries still held at the end of the accounting period.

3. Accounting methods for some major economic transactions

3.1. In case the parent company invests in a subsidiary in the form of capital contribution

1. a) When a parent company invests in a subsidiary with cash, based on the investment amount and costs directly related to the investment in the subsidiary, record:

Debit account 221 – Investment in subsidiaries

Credit account 112 – Demand deposits.

At the same time, open a detailed book to track each type of stock by par value (if investing in a subsidiary in the form of buying shares) or track the charter capital value at the subsidiary (if the subsidiary is not a joint stock company).

1. b) In case the parent company contributes capital to a subsidiary with non-monetary assets:

– In case the book value or remaining value of the assets contributed as capital If the value is less than the value re-evaluated by the parties, the enterprise reflects the increase in the difference due to revaluation of assets in other income, recording:

Debit account 221 – Investment in subsidiaries (value of contributed capital is assessed)

Debit account 214 – Depreciation of fixed assets

There are accounts 211, 213, 217 (if capital contribution is in the form of fixed assets or investment real estate) (original value of fixed assets, investment real estate)

There are accounts 152, 153, 155, 156 (if capital contribution is by inventory) (book value of inventory)

Credit account 711 – Other income (difference in increased valuation).

– In case the book value or remaining value of the contributed asset is greater than the value re-evaluated by the parties, the enterprise shall reflect the difference due to revaluation of the asset in other expenses, recording:

Debit account 221 – Investment in subsidiaries (value of contributed capital is assessed)

Debit account 214 – Depreciation of fixed assets

Debit account 811 – Other expenses (difference in valuation decrease)

There are accounts 211, 213, 217 (if capital contribution is in the form of fixed assets or investment real estate) (original value of fixed assets, investment real estate)

There are accounts 152, 153, 155, 156 (if capital contribution is by inventory) (book value of inventory).

3.2. In case the parent company invests in a subsidiary in the form of repurchasing capital contributions:

At the acquisition date, the investor determines and reflects the cost of the investment in the subsidiary including: The fair value at the date of exchange of the assets exchanged , liabilities incurred or assumed and equity instruments issued by the acquirer in exchange for control rights in the subsidiary plus (+) Costs directly related to the acquisition of equity interest in a subsidiary.

1. a) If the purchase of an investment in a subsidiary is paid by the buyer in cash or cash equivalents, record:

Debit account 221 – Investment in subsidiaries

There are accounts 111, 112, 1281…

1. b) If the acquisition of an investment in a subsidiary is made by the purchaser issuing shares:

– If the issue price (at fair value) of the shares on the date of conversion is greater than the par value of the shares, record:

Debit account 221 – Investment in subsidiaries (at fair value)

Credit account 4111 – Owner’s equity (at par value)

Credit account 4112 – Capital surplus (the difference between fair value and par value of shares).

– If the issue price (at fair value) of the shares on the date of conversion is less than the par value of the shares, record:

Debit account 221 – Investment in subsidiaries (at fair value)

Debit account 4112 – Capital surplus (the difference between the fair value being less than the par value of the stock)

Credit account 4111 – Owner’s equity (at par value).

1. c) If the acquisition of an investment in a subsidiary is paid for by the buyer exchanging non-monetary assets of its entity with the seller:

– In case of exchange by fixed assets :

+ When exchanging fixed assets, reflect a decrease in fixed assets:

Debit account 811 – Other expenses (remaining value of fixed assets exchanged )

accumulated depreciation value )

Credit account 211 – Tangible fixed assets (original price).

+ At the same time, record an increase in other income and an increase in investment in subsidiaries due to the exchange of fixed assets:

Debit account 221 – Investment in subsidiaries (total payment price)

Credit account 711 – Other income (fair value of fixed assets exchanged )

Credit account 3331 – VAT payable (33311) (if any).

– In case of exchange of products and goods:

+ When exporting products and goods for exchange, reflect the cost of goods sold, record:

Debit account 632 – Cost of goods sold

There are accounts 155, 156,…

+ At the same time, reflect sales revenue and record an increase in investment in subsidiaries:

Debit account 221 – Investment in subsidiaries

Credit account 511 – Sales revenue and service provision (fair value of exchanged inventory)

Credit account 333 – Taxes and amounts payable to the State (33311) (if any).

1. d) If the acquisition of an investment in a subsidiary is paid for by the buyer by issuing bonds:

Debit account 221 – Investment in subsidiaries (at fair value)

Credit account 343 – Issued bonds (3431, 3432).

3.3. Expenses incurred directly related to the acquisition of investments in subsidiaries such as legal consulting fees, valuation fees, etc., the purchasing enterprise records:

Debit account 221 – Investment in subsidiaries

There are Accounts 111, 112, 331,…

3.4. Other expenses incurred in connection with capital contribution activities to subsidiaries such as interest on loans for capital contribution and other expenses, recorded:

Debit account 635 – Financial expenses

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 152,…

3.5. Parent company records dividends and profits distributed in cash:

– Reflecting receivables for dividends and distributed profits, record:

Debit account 138 – Other receivables (1388)

Credit account 515 – Financial activity revenue (in case dividends and profits are distributed for the period after the investment date)

Credit account 221 – Investment in subsidiaries (in case dividends and profits are distributed for the period before the investment date)

– When receiving dividends, profits are divided in cash, record:

Debit accounts 111, 112

Credit account 138 – Other receivables (1388).

3.6. In case an enterprise makes additional investments so that investments in joint ventures, associates, and other investments become investments in subsidiaries, record:

Debit account 221 – Investment in subsidiaries

There are accounts 222, 228

There are accounts 111, 112,… (fair value of additional investment).

3.7. When liquidating part or all of an investment in a subsidiary:

Debit related accounts (fair value of proceeds from liquidation)

Debit account 222 – Investment in joint ventures and associates (subsidiaries become joint ventures and associates)

Debit account 228 – Other investments (subsidiary becomes other investment)

Debit account 229 – Provision for asset losses (provision set aside to cover losses) (if any)

Debit account 635 – Financial expenses (If loss )

Credit account 221 – Investment in subsidiaries (book value)

Credit account 515 – Financial activity revenue (if profit).

The reversal of provisions made for investments in subsidiaries may be recorded immediately for each transaction at the time of disposal or when determining the amount of provisions made at the end of each accounting period, but must be consistent with the provisions of Vietnamese accounting standards.

 

ACCOUNT 222 – INVESTMENT IN JOINT VENTURE AND ASSOCIATED COMPANIES

1. Accounting principles
2. a) This account is used to reflect the current value and the increase and decrease of all investments in joint ventures and associated companies; the recovery of investment capital in joint ventures and associated companies; and profits and losses arising from investment activities in joint ventures and associated companies.

– A joint venture company established by joint venture capital contributors has the right to jointly control financial and operating policies, and is a unit with independent accounting legal status. The joint venture company must organize and perform separate accounting work in accordance with current accounting laws, and is responsible for controlling assets, liabilities, revenues, other income and expenses arising at its unit. Each joint venture capital contributor is entitled to a portion of the joint venture company’s operating results according to the joint venture contract.

– An investment is classified as an investment in an associate when the investor holds directly or indirectly through subsidiaries from 20% to less than 50% of the voting rights of the investee without other agreements.

1. b) Accounting for investments in joint ventures must comply with the accounting principles for investments in other entities prescribed in this Circular.
2. c) When the investor no longer has joint control over the investee, the investment in the joint venture must be reduced; when the investor no longer has significant influence over the investee, the investment in the associate must be reduced .
3. d) Expenses directly related to investments in joint ventures and associates are recorded in the cost of investments in those joint ventures and associates.
4. d) When liquidating, transferring, or recovering capital contributions to joint ventures or associates, the enterprise shall reduce the book value of the investment in the joint venture or associate based on the ratio of the investment in the liquidated, transferred, or recovered joint venture or associate. The difference between the fair value of the assets obtained and the book value of the investment in the liquidated, transferred, or recovered joint venture or associate shall be recorded as financial income. (if profit) or financial costs (if loss).
5. e) Enterprises must open detailed accounting books to track capital investments in each joint venture, associated company, each investment, each liquidation and sale.
6. Structure and content of Account 222 – Investment in joint ventures and associates

Debit:

The value of investments in joint ventures and associates increased.

Creditor:

The value of investments in joint ventures and associates decreased.

Debit Balance:

Value of investment in joint ventures and associates remaining at the end of the accounting period.

3. Accounting methods for some major economic transactions

3.1. When contributing capital in cash to a joint venture or associated company, based on the investment amount and expenses directly related to the investment in the joint venture or associated company, record:

Debit account 222 – Investment in joint ventures and associates

Credit account 112 – Demand deposits

At the same time, open a detailed book to track each type of stock by par value (if investing in a joint venture or associated company in the form of buying shares) or track the charter capital value at the joint venture or associated company (if the joint venture or associated company is not a joint stock company).

3.2. In case an investor contributes capital to a joint venture or associated company with non-monetary assets:

1. a) In case the book value or remaining value of the contributed asset is less than the value re-evaluated by the parties, the enterprise shall reflect the increased difference due to revaluation of assets in other income, recording:

Debit account 222 – Investment in joint ventures and associates

Debit account 214 – Depreciation of fixed assets (accumulated depreciation value of fixed assets, investment real estate)

There are accounts 211, 213, 217 (if capital contribution is in the form of fixed assets or investment real estate) (original value of fixed assets, investment real estate)

There are accounts 152, 153, 155, 156 (if capital contribution is by inventory) (Book value of inventory)

Credit account 711 – Other income (difference in increased valuation).

1. b) In case the book value or remaining value of the contributed asset is greater than the value re-evaluated by the parties, the enterprise shall reflect the difference due to revaluation of the asset in other expenses, recording:

Debit account 222 – Investment in joint ventures and associates

Debit account 214 – Depreciation of fixed assets ( accumulated depreciation value of fixed assets, investment real estate)

Debit account 811 – Other expenses (difference in valuation decrease)

There are accounts 211, 213, 217 (capital contribution by fixed assets or investment real estate) (original price of fixed assets, investment real estate)

There are accounts 152, 153, 155, 156 (if capital contribution is by inventory) (Book value of inventory).

3.3. In case an enterprise invests in a joint venture or associated company in the form of buying back capital contributions:

At the acquisition date, the investor determines and reflects the cost of the investment in a joint venture or associate, including: The fair value at the date of exchange of the exchanged assets, incurred or assumed liabilities and equity instruments issued by the acquirer in exchange for joint control or significant influence in the joint venture or associate plus (+) Expenses directly related to the acquisition of the capital contribution in the joint venture or associate.

1. a) If the purchase of an investment in a joint venture or associate is paid by the buyer in cash or cash equivalents, record:

Debit account 222 – Investment in joint ventures and associates

There are accounts 111, 112, 1281…

1. b) If the acquisition of an investment in a joint venture or associated company is made by the buyer issuing shares:

– If the issue price (at fair value) of the shares on the date of conversion is greater than the par value of the shares, record:

Debit account 222 – Investment in joint ventures and associates (at fair value)

Credit account 4111 – Owner’s capital contribution (at par value )

Credit account 4112 – Capital surplus (the difference between fair value and par value of shares).

– If the issue price (at fair value) of the shares on the date of conversion is less than the par value of the shares, record:

Debit account 222 – Investment in joint ventures and associates (at fair value)

Debit account 4112 – Capital surplus (the difference between fair value and par value of shares)

Credit account 4111 – Owner’s equity (at par value).

1. c) If the acquisition of an investment in a joint venture or associate is paid for by the buyer exchanging non-monetary assets of its entity with the seller:

– In case of exchange by fixed assets :

+ When exchanging fixed assets, reflect a decrease in fixed assets:

Debit account 811 – Other expenses (remaining value of exchanged fixed assets)

Debit account 214 – Depreciation of fixed assets (accumulated depreciation value)

Credit account 211 – Tangible fixed assets (original price).

+ At the same time, record an increase in other income and an increase in investment in a joint venture company due to the exchange of fixed assets:

Debit account 222 – Investment in joint ventures and associated companies (total payment price)

Credit account 711 – Other income (fair value of fixed assets exchanged )

Credit account 3331 – VAT payable (33311) (if any).

– In case of exchange of products and goods:

+ When exporting products and goods for exchange, reflect the cost of goods sold, record:

Debit account 632 – Cost of goods sold

There are Accounts 155, 156,…

+ At the same time, reflect sales revenue and record an increase in investment in joint ventures and associates:

Debit account 222 – Investment in joint ventures and associates

and provision of services ( fair value of inventory exchanged )

Credit account 333 – Taxes and amounts payable to the State (33311) (if any).

1. d) If the acquisition of an investment in a joint venture is paid for by the buyer by issuing bonds:

Debit account 222 – Investment in joint ventures and associates (at fair value )

Credit account 343 – Issued bonds.

3.4. Expenses incurred directly related to investing in joint ventures and associated companies (information, brokerage, and transaction costs during the investment process) are recorded as follows:

Debit account 222 – Investment in joint ventures and associates

There are accounts 111, 112, 331,…

3.5. Other expenses arising in relation to joint venture and association capital contribution activities such as interest on loans for capital contribution and other expenses, record:

Debit account 635 – Financial expenses

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112,…

3.6. Accounting for dividends and profits distributed in cash:

– Reflecting receivables for dividends and distributed profits, record:

In debt Account 138 – Other receivables (1388)

Credit account 515 – Financial activity revenue (in case dividends and profits are distributed for the period after the investment date)

Credit account 222 – Investment in joint ventures and associated companies (in case dividends and profits are distributed for the period before the investment date)

– When receiving dividends, profits are divided in cash, record:

In debt the Account 111, 112

Credit account 138 – Other receivables (1388).

3.7. Accounting for liquidation and sale of investments in joint ventures and associated companies:

Debit accounts 112, 131,… (fair value of the amount received from liquidation)

Debit account 228 – Other investments (if no longer significantly affected)

Debit account 229 – Provision for asset losses (provision set aside to offset losses when investing in joint ventures and associated companies) (if any)

Debit account 635 – Financial expenses (if loss)

Credit account 222 – Investment in joint ventures and associates (book value)

Credit account 515 – Financial activity revenue (if profit).

The reversal of provisions made for investments in joint ventures and associates may be recorded immediately for each transaction at the time of transfer or when determining the amount of provisions for investment losses in other entities at the end of each accounting period, but must be consistent with the provisions of Vietnamese accounting standards.

3.8. Expenses for liquidation and sale of investments in joint ventures and associates, record:

Debit account 635 – Financial expenses

Debit account 133 – Deductible VAT (if any)

There are Accounts 111, 112, 331…

3.9. In case of additional investment to make a joint venture or associated company become a subsidiary and hold control, record:

Debit account 221 – Investment in subsidiaries

There are accounts 111, 112 (value of additional investment)

Credit account 222 – Investment in joint ventures and associates.

3.10. Accounting for purchase and sale transactions between joint venture participants and joint venture companies: Accounting reflects the transaction as for purchase and sale transactions with normal customers (unless the equity method is applied ) .

 

ACCOUNT 228 – OTHER INVESTMENTS

1. Accounting principles
2. a) This account is used to reflect the current value and the increase or decrease in other investments (other than investments in subsidiaries, investments in joint ventures and associates), such as:

– Investments in equity instruments of other entities but without control or joint control, without significant influence on the investee; Investments in BCC contracts in which the enterprise does not have joint control but enjoys benefits depending on the after-tax profit of the BCC contract.

– Precious metals and gemstones not used as raw materials for manufacturing products or purchased and sold as goods; Paintings, photographs, documents, valuable items not involved in normal production and business activities. In cases where there is solid evidence that these investments have decreased in value compared to market value and the decrease is reliably determined, the enterprise is allowed to reduce the value of the investment and record the loss in financial expenses.

– Other investments.

1. b) Enterprises must monitor in detail each other investment according to the number of shares and capital contributions at the investee.
2. c) Accountants comply with the accounting principles for investments in other units as prescribed in this Circular.
3. Structure and reflection content of Account 228 – Other investments

Debit:

The value of other investments increased.

Creditor:

The value of other investments decreased.

Debit Balance:

Value of other investments existing at the end of the accounting period.

Account 228 – Other investments has 2 sub-accounts:

– Account 228 1 – Capital investment in other entities: Reflects investments in capital instruments but the enterprise does not have control, joint control or significant influence over the investee. In addition, this account also reflects investments in BCC contracts in which the enterprise does not have joint control but enjoys benefits depending on the after-tax profit of the BCC contract.

– Account 2288 – Other investments: Reflects investments in non-financial assets other than investment real estate and amounts reflected in other accounts related to investment activities. Other investments may include precious metals, precious stones (not used as inventory), paintings, photographs, documents, other valuable items (other than those classified as fixed assets)… not involved in normal production and business activities but purchased for the purpose of holding for price increase.

3. Accounting methods for some major economic transactions

3.1. When an enterprise invests in buying shares or making long-term capital contributions but does not have control, joint control or significant influence over the investee:

1. a) In case of investment in cash

Debit account 228 – Other investments (2281) (according to the original cost of the investment + Direct costs related to investment activities, such as brokerage costs,…)

Credit account 112 – Demand deposits.

At the same time, open a detailed book to track each type of stock by par value (if investing in the form of buying shares) or track the charter capital value at the invested company (if the invested enterprise is not a joint stock company).

1. b) In case of investment with non-monetary assets:

– In case of capital contribution in the form of non-monetary assets, based on the revaluation price of materials, goods, and fixed assets, record:

Debit account 228 – Other investments (2281)

Debit account 214 – Depreciation of fixed assets (accumulated depreciation value)

Debit account 811 – Other expenses (the difference between the revaluation price being less than the book value of inventory or the remaining value of fixed assets)

There are accounts 152, 153, 156, 211, 213,… (book value of inventory or original price of fixed assets)

Credit account 711 – Other income (the difference between the revaluation price and the book value of inventory or the remaining value of fixed assets).

– In case of repurchasing capital contribution with non-monetary assets:

+ In case of exchange by fixed assets:

Debit account 811 – Other expenses (remaining value of exchanged fixed assets)

Debit account 214 – Depreciation of fixed assets (depreciation value)

There are accounts 211, 213 (original price).

At the same time, record other income and increase other long-term investments due to exchange of fixed assets:

Debit account 228 – Other investments (2281) (total payment price)

Credit account 711 – Other income

Credit account 3331 – VAT payable (account 33311) (if any).

+ In case of exchange of products or goods, when exporting products or goods for exchange, record:

Debit account 632 – Cost of goods sold

Have the Accounts 155, 156,…

Also reflects sales revenue and increases other investments:

Debit account 228 – Other investments (2281) (total payment price)

Credit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and amounts payable to the State (33311) (if any).

3.2. Accounting for dividends and profits distributed in cash:

– Reflecting receivables for dividends and distributed profits, record:

In debt Account 138 – Other receivables (1388)

Credit account 515 – Financial activity revenue (in case dividends and profits are distributed for the period after the investment date)

Credit account 228 – Other investments (2281) (in case dividends and profits are distributed for the period before the investment date).

– When receiving dividends, profits are divided in cash, record:

Debit accounts 111, 112

Credit account 138 – Other receivables (1388).

3.3. When an investor sells part of its investment in a subsidiary, joint venture or associated company, resulting in no longer having control or no longer having joint control or no longer having significant influence, record:

Debit accounts 112, 131…

Debit account 228 – Other investments (2281)

Debit account 635 – Financial expenses (if loss)

There are accounts 221, 222

Credit account 515 – Financial activity revenue (if profit).

3.4. Liquidation and sale of other investments:

– In case of profitable sale or liquidation, record:

Debit accounts 112, 131,… (selling price)

Credit account 228 – Other investments (book value)

Credit account 515 – Financial activity revenue (selling price is greater than book value).

– In case of sale or liquidation at a loss, record:

Debit accounts 112, 131… (sale price)

Debit account 635 – Financial expenses (selling price is less than book value)

Credit account 228 – Other investments (book value).

3.5. When an investor contributes additional capital and converts another investment into an investment in a subsidiary or associate, record:

Debit accounts 221, 222

There are accounts 111, 112 (additional investment amount)

Credit account 228 – Other investments .

 

ACCOUNTING FOR BUSINESS COOPERATION CONTRACTS TRANSACTIONS

1. Accounting principles

1.1. A business cooperation contract (BCC) is a contractual agreement between two or more parties to jointly carry out an economic activity without forming an independent legal entity. This activity may or may not be jointly controlled by the capital contributors or controlled by one of the parties to the contract.

1.2. A BCC contract can be implemented in the form of joint construction of assets or cooperation in some business activities. The parties participating in a BCC can agree to share revenue, products or after-tax profits according to the results of the BCC activities or to share fixed benefits regardless of the results of the BCC activities.

1.3. In all cases, when receiving money or assets contributed by other parties to BCC, the receiving party must account for them as liabilities and not record them in equity.

1.4. Enterprises need to base on the terms and nature of the BCC contract to determine whether the enterprise has joint control or non-joint control over the BCC contract to perform appropriate accounting.

1.5. In case the enterprise is the party with joint control over the BCC

1.5.1. For BCC in the form of jointly controlled assets

1. a) Assets jointly controlled by BCC participants are assets purchased, constructed, used by BCC participants for BCC purposes and bringing benefits. Benefits for the parties participating in BCC according to the provisions of the contract. The parties participating in BCC are recognized as assets in the Financial Statements of their units.
2. b) Each party participating in the BCC receives products or revenue from the use and exploitation of jointly controlled assets and bears a portion of the costs incurred as agreed in the contract.
3. c) BCC participants must open detailed accounting books on the same accounting system to record and reflect in their Financial Statements the following contents:

– Capital contribution to jointly controlled assets, classified according to the nature of the assets;

– Liabilities arising separately from each party contributing capital to BCC;

– The common liabilities that the BCC participants must bear from the BCC’s operations;

– Income from the sale or use of the shared product portion together with the incurred expenses divided from the BCC;

– Expenses incurred in connection with capital contribution to BCC.

For fixed assets and investment real estate when contributed as capital to a BCC and the ownership is not transferred from the capital contributor to the joint ownership of the parties, the asset recipient shall track the assets as assets held on behalf of the parties, without accounting for an increase in assets and capital contribution of the owner; the asset contributor shall not record a decrease in assets in the accounting books but shall only track in detail the location, position, place of the assets, and the party managing and using the assets.

For fixed assets and investment real estate contributed as capital with ownership transferred from the capital contributor to joint ownership, during the construction of jointly controlled assets, the party contributing the assets must record a decrease in assets in the accounting books . After the jointly controlled assets are completed, handed over, and put into use, based on the value of the divided assets, the parties record an increase in their assets in accordance with the purpose of use.

1.5.2. For BCC in the form of jointly controlled business activities

1. a) A business cooperation contract in the form of jointly controlled business activities is a business cooperation activity that does not establish a new business establishment. The parties participating in the BCC have obligations and are entitled to benefits according to the agreement in the contract. The activities of the BCC are carried out by the capital contributors along with other normal business activities of each party.
2. b) The business cooperation contract stipulates the separate expenses incurred for jointly controlled business activities to be incurred by each party participating in the BCC . The party must bear the common costs (if any). The common costs (if any) shall be divided among the capital contributors based on the agreements in the contract.
3. c) BCC participants must open accounting books to record and reflect in their Financial Statements the following contents:

– Assets contributed to the BCC contract and controlled by the party contributing capital to the BCC;

– Liabilities incurred ;

– Revenue shared from the sale or provision of services of BCC;

– Costs to be borne.

1. d) When a BCC participant incurs common costs, it must open an accounting book to record and collect all such common costs. Periodically, based on the agreements in the BCC on the allocation of common costs, the BCC accounting party shall prepare a Common Cost Allocation Table, which shall be confirmed by the BCC participants and given to each party to keep one copy (original). The Common Cost Allocation Table with accompanying legal original documents shall be the basis for each BCC participant to account for common costs allocated from the contract.
2. d) In case the BCC contract stipulates product division, periodically according to the agreement in the contract, the accounting party for the BCC must prepare a Product Division Table for the capital contributing parties and have the parties confirm the quantity and specifications of the products divided from the contract and delivered to the parties. When actually delivering the products, the accounting party for the BCC must prepare a Product Delivery Receipt to serve as a basis for the BCC participants to record the accounting books, monitor and serve as a basis for contract liquidation.
3. e) In case BCC incurs common costs and revenues that the parties to the BCC contract must bear or enjoy, the parties to the BCC shall base on the Table of common revenue and cost allocation notified by the accounting party for the BCC contract to record them in the unit’s revenue and expenses.

1.5.3. For BCC in the form of profit sharing after tax

1. a) In this case, the BCC contract stipulates that the participating parties can only share profits if the BCC’s operating results are profitable, and must bear losses if the BCC’s operating results are unprofitable. The parties must appoint one party to account for all BCC transactions, record revenue and expenses, separately monitor the BCC’s business results, and issue invoices and declare taxes according to the contract and tax laws.
2. b) The accounting and tax settlement party for BCC records all revenue and expenses arising from BCC in the accounting books of related accounts to serve as a basis for comparison and determination of taxable revenue and expenses of BCC. However, only the revenue and expenses corresponding to the portion that the enterprise is entitled to or New liabilities are recorded and presented in the related revenue and expense indicators on the enterprise’s Income Statement.
3. c) Parties to a BCC contract shall comply with accounting regulations similar to those in the case of jointly controlled business activities.

1.6. In case the enterprise is the party that does not have joint control over the BCC

1. a) Enterprises need to base on the content of the terms and nature of the BCC contract to determine whether the enterprise that does not have the right to jointly control the BCC is entitled to benefits that depend on the business results of the BCC or is entitled to fixed benefits that do not depend on the business results of the BCC, in order to perform appropriate accounting.
2. b) In case the BCC contract stipulates that the parties participating in the BCC receive benefits depending on the business results of the BCC, the capital contributions to the BCC contract and the benefits that the investor receives from the BCC contract shall be made according to the instructions in Account 2281 – Investment in other entities.
3. c) In case the BCC contract stipulates that the participating parties are entitled to fixed benefits regardless of the business results of the BCC, the accounting shall be as follows depending on the nature of the contract:

– For the accounting side for BCC:

+ Record all revenue, expenses and after-tax profits of BCC on its Business Performance Report; Earnings per share and financial analysis indicators are calculated for all revenue, expenses and profits of BCC;

+ Record all of BCC’s after-tax profit into the “Undistributed after-tax profit” indicator on the Financial Statement. Financial indicators related to the after-tax profit margin are determined to include all of BCC’s results.

– For parties participating in BCC, record revenue from asset leasing or loan interest for the amount divided from BCC. In which:

+ If the nature is asset leasing (the enterprise contributes to BCC with non-monetary assets), the enterprise will account for it as an asset leasing transaction.

+ If the nature is a loan transaction (the enterprise contributes cash to BCC), the enterprise accounts for it as a loan transaction.

1.7. Explanation of BCC contract on the enterprise’s Financial Statements

For BCC contracts with a value of 10% or more of the total value of BCC contracts, the enterprise must explain in detail the information about BCC contract on the unit’s Financial Statements as prescribed in this Circular.

2. Accounting method for the case where the enterprise is the party with joint control over BCC

2.1. BCC case in the form of jointly controlled assets

1. a) In case the parties participating in BCC contribute money to purchase jointly controlled assets, each party shall base on the actual amount contributed to purchase the assets, record:

Debit account 211, 213, 217,…

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331, 341,…

1. b) In case the parties participating in BCC themselves carry out or coordinate with other partners to invest in construction to obtain jointly controlled assets, based on the actual costs incurred by the parties participating in BCC, record:

Debit account 241 – Construction in progress (details of jointly controlled assets)

Debit account 133 – Deductible VAT ( if any)

There are accounts 111, 112, 152, 153, 155, 156, 331, 341,…

1. c) When the construction investment project is completed and put into use, the parties must settle and divide the value of jointly controlled assets. Based on the minutes of division of jointly controlled assets for accounting in accordance with the provisions of law, record:

Debit account 211, 213, 217 (details of jointly controlled assets by value) reasonableness of each part of the property divided)

Debit account 138 – Other receivables (unapproved expenses, must be recovered – if any)

Debit account 811 – Other expenses (if the fair value of the asset is divided into smaller parts) construction investment costs)

Credit account 241 – Construction in progress

Credit account 711 – Other income (if the fair value of the divided asset is greater than the construction investment cost).

1. d) The method of recording economic transactions related to accounting for costs and revenues that the parties participating in BCC in the form of jointly controlled assets must bear or receive when the assets come into operation and the BCC changes to the form of jointly controlled activities is implemented as prescribed for the case of jointly controlled business activities.

2.2. BCC cases in the form of jointly controlled business activities

1. a) Accounting for capital contributions and capital receipts in jointly controlled business activities

– At the capital recipient

+ Based on the capital contribution minutes of the parties participating in the jointly controlled BCC contract, the capital recipient records:

Debit account 111, 112, 152, 155, 156…

Credit account 338 – Other payables.

In case of receiving capital contribution in the form of fixed assets without transferring ownership, the capital recipient only monitors the details on the management system and explains as assets held in trust.

+ When returning the capital contribution to the parties, the receiving party reverses the above entry. If there is a difference between the book value of the returned asset and the value of the contribution received from the parties, the enterprise reflects other income or other expenses.

– At the capital contributor

+ Based on the capital contribution minutes of the parties participating in the jointly controlled BCC contract, the capital contributor records:

Debit account 138 – Other receivables

There are accounts 111, 112, 152, 155, 156,…

In case of capital contribution in the form of fixed assets without transfer of ownership, the capital contributor does not record a decrease in fixed assets but only monitors details on the management system and explains the location of the assets, the party managing and using the assets.

+ When receiving back the contributed capital , the capital contributor reverses the above entry. If there is a difference between the fair value of the received asset and the value of the contributed capital, the enterprise reflects other income or other expenses.

1. b) Accounting for costs incurred separately by each party participating in BCC

– Based on related invoices and documents, collect the separate expenses incurred by the BCC participants when participating in jointly controlled business activities, record:

Debit accounts 621, 622, 627, 641, 642 (details for BCC contract)

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331,…

– At the end of the period, transfer the separately incurred costs to summarize the production and business costs of the BCC contract, record:

Debit account 154 – Production and business costs in progress (details for contract) BCC)

There are accounts 621, 622, 627 (details for BCC contract).

1. c) Accounting for common costs incurred by each party participating in BCC:

– Accounting at the BCC participant where common costs arise:

+ When common costs arise that each party participating in BCC must bear, based on related invoices and documents, record:

Debit accounts 621, 622, 627, 641, 642,… (details for BCC contract)

Debit account 133 – Deductible VAT (if any)

There are Accounts 111, 112, 331,…

+ In case the BCC contract stipulates the division of common costs, at the end of the period, based on the provisions of the contract, the party incurring common costs shall prepare a table allocating common costs to the capital contributors and after being accepted by the BCC participants, based on the costs allocated to the other capital contributors, record:

Debit account 138 – Other receivables (details for each partner)

Credit account 133 – Deductible VAT (if input tax is divided) (if any)

Credit account 3331 – VAT payable (if input tax of general expenses has been fully deducted, must increase output tax payable) (if any)

There are accounts 621, 622, 627, 641, 642,…

– The accountant at the BCC participant does not record common costs for the BCC contract: Based on the Table of common cost allocation of the BCC contract accepted by the capital contributing parties (notified by the BCC participant that incurs common costs), record:

Debit accounts 621, 622, 623, 641, 642 (details for BCC contract)

Debit account 133 – Deductible VAT (if any)

Credit account 338 – Other payables (details for BCC participants that incur common expenses ).

1. d) Accounting in case of product sharing contract:

– When receiving products divided from the BCC contract imported into the warehouse, based on the product delivery note from the contract, warehouse receipt and related documents, record:

Debit account 152 – Raw materials, supplies (if the divided product is not the final finished product)

Debit account 155 – Products (if products are divided into finished products, semi-finished products)

Debit account 157 – Goods sent for sale (if the products are sent to be divided and sold immediately without going through the warehouse)

Credit account 154 – Production and business costs, unfinished (including separate costs and common costs that each party participating in BCC must bear) (details for BCC contract).

– When receiving products divided from the contract and immediately putting them into use for manufacturing other products, based on the product delivery note from the contract and related documents, record:

Debit account 621 – Direct material and raw material costs

Credit account 154 – Unfinished production and business costs (including separate costs and common costs that each party participating in BCC must bear) (details for BCC contract).

– In case the BCC contract stipulates that the products are not divided but are delivered to one party for sale, after issuing invoices to the product seller, transfer the separate costs incurred and common costs that each party participating in the BCC must bear to the cost of goods sold, record:

Debit account 632 – Cost of goods sold

Credit account 154 – Unfinished production and business costs (including separate costs and common costs that each party participating in BCC must bear) (details for BCC contract).

1. d) Accounting for product sales revenue in case one party to a BCC contract sells goods on behalf of other partners and shares revenue with other partners:

– Accounting on the product sales side:

+ When selling products according to the provisions of the contract, the seller must issue invoices for all products sold, and at the same time reflect the total amount of product sales of BCC activities, recording:

In debt the Accounts 111, 112, 131,…

Credit account 338 – Other payables (BCC contract details)

Credit account 3331 – VAT payable (if any).

+ Based on the provisions of the BCC contract and the Revenue Allocation Table, reflect the revenue corresponding to the benefits enjoyed by the BCC participants:

(+) For the revenue part of the product seller , record :

Debit account 338 – Other payables ( details for BCC contract)

Credit account 511 – Sales revenue and service provision (benefits that the seller receives according to the agreement in the contract).

+ For the revenue portion divided for the BCC partner, based on the Revenue Division Table and invoices prepared by the partner, record:

Debit account 338 – Other payables (details for BCC contract)

Debit account 133 – Input VAT (if any )

Credit account 338 – Other payables (Details for BCC partners).

+ After comparing the common costs incurred by each party and the revenue divided among the parties according to the contract, the enterprise offsets other receivables and other payables (details for each party participating in the BCC contract), recording:

Debit account 338 – Other payables (Details for BCC partners)

Credit account 138 – Other receivables (Details for BCC partners).

+ When paying for the sale of products by a partner participating in BCC who is not the seller of the damaged product , record:

Debit account 338 – Other payables (each partner participating in BCC)

There are accounts 111, 112,…

– Accountant on the non-product sales side:

+ For BCC participants who do not sell products, based on the revenue allocation table confirmed by BCC participants and related documents provided by the product seller, invoice the product seller according to the revenue that they are entitled to, record :

Debit account 138 – Other receivables (including VAT if output VAT is divided, details for partners participating in BCC contracts to sell products)

Credit account 511 – Sales revenue and service provision (details for BCC contract and according to the amount divided)

Credit account 3331 – VAT payable (if dividing output VAT).

+ After comparing the common costs incurred by each party and the revenue divided among the parties according to the contract, the enterprise offsets other receivables and other payables (details for each party participating in the BCC contract), recording:

Debit account 338 – Other payables

There is account 138 – Other receivables.

+ When the partner participating in the BCC contract pays for the sale of products, based on the actual amount received, record:

Debit accounts 111, 112,… (amount paid by contract partners)

Credit account 138 – Other receivables (details of each product seller).

2.3. In case BCC divides after-tax profits depending on the business results of the BCC contract

1. a) At the accounting side for the BCC contract

– When receiving money, materials, goods, and fixed assets from capital contributors, record:

Debit accounts 112, 152, 156,…

Credit account 338 – Other payables.

– When recording revenue of BCC contract, accountants record all revenue arising in accounting book account 511 as a basis for comparison, explanation and determination of taxable revenue for BCC:

+ Record revenue of BCC contract, record:

Debit account 112, 131

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable.

On the Income Statement, only the revenue corresponding to the portion the enterprise enjoys is presented in the “Sales and service revenue” indicator.

+ Periodically, the enterprise reduces the revenue of the BCC contract corresponding to the portion the parties are entitled to, recording:

Debit account 511 – Sales revenue and service provision

Debit account 3331 – VAT payable (if including VAT)

Credit account 338 – Other payables.

– When recording costs of a BCC contract, the enterprise records all costs in the accounting books of related cost accounts as a basis for comparison and determination of costs of the BCC contract:

+ When costs of BCC contract arise, record:

Debit accounts 632, 641, 642…

There are accounts 112, 331, 154, 155…

On the Income Statement, only expenses that are attributable to the portion incurred are presented in the expense categories.

+ Periodically, the accountant records a reduction in the cost of the BCC contract corresponding to the portion that other parties must bear, recording:

Debit account 138 – Other receivables

There are accounts 632, 641, 642.

+ When determining the amount of corporate income tax payable for the BCC contract, the tax settlement party shall notify the other parties of each party’s obligation to pay tax, recording:

Debit account 8211 – Corporate income tax expense (amount payable by the tax settlement party)

Debit account 138 – Other receivables (amount paid on behalf of other parties in the BCC contract)

Credit account 3334 – Corporate income tax (total corporate income tax payable).

+ After comparing the common costs incurred by each party and the revenue divided among the parties according to the contract, the enterprise offsets other receivables and other payables (details for each party participating in the BCC contract), recording:

Debit account 338 – Other payables

Credit account 138 – Other receivables.

– When returning to the parties the money and materials received as capital contribution, record:

Debit account 338 – Other payables

There are accounts 112, 152, 156,…

If there is a difference between the book value of the returned asset and the value of the capital contributed by the parties, the enterprise reflects other income or other expenses .

1. b) At the non-accounting party for the BCC contract

– When contributing capital to a BCC contract, record:

In debt Account 138 – Other receivables

There are accounts 112, 152, 156…

– Based on the cost allocation table of the BCC contract accepted by the participating parties, record:

Debit accounts 621, 622, 623, 641, 642 (details for BCC contract)

Debit account 133 – Deductible VAT (if any)

Credit account 338 – Other payables.

– Based on the notified corporate income tax payable, record:

Debit account 821 – Current corporate income tax expense

Credit account 338 – Other payables.

– Based on the revenue allocation table confirmed by the BCC participants and related documents provided by the product seller, invoice the product seller according to the revenue that you are entitled to, record:

Debit account 138 – Other receivables (including VAT if output VAT is divided, details for partners participating in BCC contracts to sell products)

Credit account 511 – Sales revenue and service provision (details for BCC contract and according to the amount divided)

Credit account 3331 – VAT payable (if dividing output VAT).

– After comparing the common costs incurred by each party and the revenue divided among the parties according to the contract, the accountant offsets other receivables and other payables (details for each party participating in the BCC contract), recording:

Debit account 338 – Other payables

There is account 138 – Other receivables.

– When the accounting party for BCC divides the results of BCC to the partners participating in the BCC contract, based on the actual amount received, record:

Debit accounts 111, 112,… (amount paid by contract partners)

Credit account 138 – Other receivables (details of each product seller).

– When receiving capital contribution back, record:

In debt the Account 112, 152, 156…

There is account 138 – Other receivables

If there is a difference between the fair value of the assets received and the value of the capital contribution, the accountant reflects other income or other expenses.

3. Accounting method for the case where the enterprise is the party without joint control over the financial statement

3.1. In case the BCC contract stipulates that the parties participating in the BCC enjoy benefits depending on the business results of the BCC, the capital contributions Investments in BCC contracts and benefits received by investors from BCC contracts are made according to the instructions in Account 2281 – Investments in other entities.

3.2. In case the BCC contract stipulates that the participating parties are entitled to fixed benefits regardless of the business results of the BCC, the accounting will be appropriate depending on the nature of the contract, whether it is an asset lease or a loan.

1. a) In case the nature of the BCC contract is asset leasing:

– The party performing accounting and tax settlement for BCC shall account for it as an asset leasing transaction.

– The party that does not perform accounting and tax settlement for BCC shall account for it as an asset leasing transaction.

1. b) In case the nature of the BCC contract is a loan:

– The party performing accounting and tax settlement for BCC shall account for it as a loan transaction.

– The party that does not perform accounting and tax settlement for BCC shall account for it as a loan transaction.

 

ACCOUNT 229 – PROVISION FOR ASSET LOSS

1. Accounting principles

1.1. This account is used to reflect the current amount and the increase and decrease in provisions for asset losses, including:

1. a) Provision for devaluation of trading securities: Is the provision for the loss in value that may occur due to devaluation of securities that the enterprise is holding for business purposes;
2. b) Provision for loss on investment in other entities (except for trading securities): This is a provision when the enterprise receiving the invested capital suffers a loss or the investment in other entities declines in value, leading to the possibility of the investor losing capital or when there is evidence that part or all of the investment held until maturity by the enterprise is likely to be unrecoverable.
3. c) Provision for doubtful debts: Is a provision for the value of receivables when there is evidence that the enterprise is unlikely to recover or is unable to recover part or all of the enterprise’s receivables.
4. d) Provision for inventory devaluation: This is a provision established when there is evidence that the net realizable value is lower than the original price of the inventory.
5. d) Provision for impairment of biological assets: This is a provision established when there is evidence that the net realizable value is lower than the original cost of the biological asset.

1.2. Accounting principles for provisions for devaluation of trading securities

1. a) Enterprises are allowed to make provisions for the possible loss in value when there is solid evidence showing that the market value of the securities the enterprise is holding for business purposes has decreased compared to the book value.
2. b) Provisions for losses on trading securities are made as follows:

– For trading securities that are listed securities or whose fair value is reliably determined, provisions are made based on the market value of the securities at the end of the accounting period;

– For trading securities whose fair value cannot be determined at the end of the accounting period, provisions are made based on the loss of the investee.

1. c) The provision for or reversal of the provision for devaluation of trading securities is made at the time of preparing the Financial Statement:

– If the amount of provision to be established this year is higher than the provision balance currently recorded in the accounting books, the enterprise shall make additional provisions for the difference and record it in financial expenses for the period.

– If the amount of provision to be established this year is lower than the unused balance of the previous year’s provision, the enterprise shall reverse the difference and record a reduction in financial expenses for the period.

1.3. Accounting principles for provision for investment losses in other entities

1. a) For invested units that are parent companies, the basis for investors to set aside provisions for investment losses in other units is the consolidated financial statements of that parent company. For invested units that are independent enterprises without subsidiaries, the basis for investors to set aside provisions for investment losses in other units is the financial statements of that invested party.

– For investments in joint ventures and associates, investors only set up provisions due to losses in joint ventures and associates if the Financial Statements do not apply the equity method to investments in joint ventures and associates.

– For investments that investors hold for a long time (not investments in trading securities, investments in subsidiaries, joint ventures, or associates), provisions are made as follows:

+ For investments in listed shares or for which the fair value of the investment is reliably determined, the provision is based on the market value of the shares;

+ For investments whose fair value cannot be determined at the reporting date, provisions are made based on the loss of the investee.

– For investments held to maturity: Provisions are made when there is evidence that part or all of the enterprise’s investments held to maturity are likely to be unrecoverable.

1. c) The provision and reversal of investment loss provisions in other entities are made at the time of preparing the Financial Statement for each investment according to the following principles:

– If the amount of provision to be established this year is higher than the provision balance currently recorded in the accounting books, the enterprise shall make additional provisions for the difference and record it in financial expenses for the period.

– If the amount of provision to be established this year is lower than the unused balance of the provision established last year , the enterprise shall reverse the difference and record a reduction in financial expenses for the period.

1.4. Accounting principles for provisions for doubtful debts

1. a) At the end of the accounting period, the enterprise determines the bad debt receivables that are overdue or likely to be irrecoverable to set up or reverse the bad debt provision.
2. b) Enterprises set up provisions for doubtful debts when there is a receivable debt that is overdue or not yet due for payment but there is evidence that part or all of the receivable debt of the enterprise is estimated to be likely to be lost due to the debtor or debtor being missing, absconding, or having difficulty or being unable to pay the debt .

– Enterprises have receivables that are overdue as stated in economic contracts, loan agreements, contract commitments or debt commitments, but have not yet been collected. The determination of the overdue period of receivables that are determined to be difficult to collect and must set up a provision is based on the principal repayment period according to the original purchase and sale contract, not taking into account debt extensions between the parties;

– The enterprise is unlikely or unable to recover part or all of the debt receivable from the BCC contract due to the project being suspended or prolonged not due to technical requirements, the project is unable to continue implementation,…;

– The enterprise has receivables that have not yet reached the payment deadline but the debtor has gone bankrupt or is in the process of dissolution, missing, or absconding ;

1. c) Provision level for doubtful debts

– For overdue receivables, the provision level is as follows:

+ 30% of the value for overdue receivables from 6 months to less than 1 year.

+ 50% of the value for overdue receivables from 1 year to less than 2 years.

+ 70% of the value for overdue receivables from 2 years to less than 3 years.

+ 100% value for receivables 3 years or more old.

– For telecommunications service businesses and goods retail businesses, receivables from telecommunications, information technology, postpaid television service fees and receivables from retail sales of goods in the form of deferred/installment payments by debtors who are individuals that are overdue for payment, the provisioning level is as follows:

+ 30% of the value for overdue receivables from 3 months to less than 6 months.

+ 50% of the value for overdue receivables from 6 months to less than 9 months.

+ 70% of the value for overdue receivables from 9 months to less than 12 months.

+ 100% of the value for receivables from 12 months or more.

– For receivables that have not yet reached the payment deadline but the enterprise has evidence that the economic organization has gone bankrupt, has opened bankruptcy proceedings, has fled the business location; the debtor is being prosecuted, detained, tried by law enforcement agencies or is serving a sentence or is suffering from a serious illness or has died or the debt has been requested by the enterprise to be enforced but cannot be enforced because the debtor has fled the place of residence; the debt has been sued by the enterprise but the case has been suspended or for other reasons, the enterprise shall estimate the level of irrecoverable loss (up to the value of the debt being monitored in the accounting books) to set up a provision for bad debts.

Where the enterprise has more reliable evidence or another method is more suitable in determining the recoverable value of the receivable, it may apply that method to determine the provision for doubtful debts.

1. d) The provision or reversal of bad debt provision is made at the time of preparing the Financial Statement.

– In case the provision for doubtful debts to be established at the end of this accounting period is greater than the balance of the provision for doubtful debts currently recorded in the accounting books, the larger difference is recorded as an increase in the provision and an increase in the business management expenses of the period.

– In case the provision for doubtful debts to be established at the end of this accounting period is smaller than the balance of the provision for doubtful debts recorded in the accounting books, the smaller difference will be reversed and recorded as a reduction in the provision and a reduction in the business management expenses of the period.

1. d) For bad debts that have lasted for many years, the enterprise has tried to use all measures to collect the debt but still cannot collect the debt and determines that the debtor is truly unable to pay , the enterprise may have to carry out procedures to sell the debt to a debt buying and selling company or delete the bad debts on the accounting books. The deletion of bad debts must be carried out in accordance with the provisions of law and the enterprise’s charter. This debt book is monitored in the enterprise’s management system and presented in the Financial Statements explanation. If after the debt has been deleted, the enterprise can collect the debt that has been handled, the amount collected will be recorded in Account 711 – Other income.

1.5. Accounting principles for inventory price reduction provisions

1. a) Provision for inventory devaluation is an amount estimated in advance to include in production and business costs the portion of the value that has decreased lower than the recorded value of inventory and to compensate for actual losses caused by the decrease in price of inventory materials, products, and goods. Enterprises make provisions for inventory devaluation when there is evidence that the net realizable value is lower than the original price of inventory.
2. b) The provision for inventory devaluation is made or reversed at the time of preparing the Financial Statement. The provision for inventory devaluation must be made in accordance with the provisions of Vietnamese Accounting Standard No. 02 – Inventories .
3. c) The provision for inventory price reduction must be calculated for each type of materials, goods, and inventory products. For unfinished services, the provision for inventory price reduction must be calculated for each type of service with a separate price.

realizable value of inventories is the estimated selling price of inventories in the ordinary course of business less (-) the estimated costs of completing the products and the estimated costs necessary to make their sale.

1. d) At the end of the accounting period, the enterprise shall base on the quantity, original price, and net realizable value of each type of material, goods, and each type of unfinished services to determine the inventory price reduction provision that needs to be set up or reversed at the end of the accounting period as follows:

– In case the inventory devaluation reserve to be established at the end of this accounting period is greater than the inventory devaluation reserve currently recorded in the accounting books, the larger difference is recorded as an increase in the reserve and an increase in the cost of goods sold in the period.

– In case the inventory devaluation reserve to be established at the end of this accounting period is smaller than the inventory devaluation reserve currently recorded in the accounting books, the smaller difference will be reversed and recorded as a reduction in the provision and a reduction in the cost of goods sold in the period.

1.6. Principles of accounting for provisions for losses on biological assets

1. a) Enterprises make provisions for losses on biological assets when there is evidence that the net realizable value is less than the original price of the biological asset. The accounting for the establishment and reversal of provisions for losses on biological assets is performed similarly to the enterprise’s inventories.
2. b) When preparing the Financial Statements, enterprises need to base on the quantity, original price, and net realizable value of each type of biological asset to determine the provision for biological asset losses that must be set up or reversed at the end of the accounting period as follows:

– In case the provision for loss of biological assets to be established at the end of this accounting period is greater than the provision for loss of biological assets currently recorded in the accounting books, the larger difference is recorded as an increase in the provision and an increase in the cost of goods sold in the period.

– In case the provision for loss of biological assets to be established at the end of this accounting period is smaller than the provision for loss of biological assets currently recorded in the accounting books, the smaller difference will be reversed and recorded as a reduction in the provision and a reduction in the cost of goods sold in the period.

2. Structure and content of account 229 – Provision for asset losses

Debtor :​

– Reversal of the difference between the amount of provision to be set up this period being less than the amount of provision set up in the previous period that has not been fully used;

– Offset the value of investments in other entities when there is a decision to use the established reserves to offset losses that occur.

– Offset the provisioned value of the irrecoverable receivable that must be written off.

Creditor:

Provisions for asset impairment at the end of the accounting period maths.

Credit Balance: The amount of the existing asset impairment reserve at the end of the accounting period.

Account 229 – Provision for asset losses has 5 sub-accounts

Account 229 1 – Provision for devaluation of trading securities : This account reflects the provision or reversal of provision for devaluation of trading securities.

Account 2292 – Provision for investment losses in other entities : This account reflects the provision or reversal of provision for investment losses in other entities.

doubtful debts : This account reflects the provision or reversal of provisions for doubtful debts.

Account 2294 – Provision for inventory devaluation: This account reflects the provision or reversal of provision for inventory devaluation.

Account 2295 – Provision for loss of biological assets: This account reflects the provision or reversal of provision for loss of biological assets (except for biological assets accounted for as fixed assets).

3. Accounting methods for some major economic transactions

3.1. Accounting method for provision for decline in value of trading securities

1. a) At the end of the accounting period, if there is any sign or evidence that the types of securities that the enterprise is holding for business purposes may suffer losses due to price reduction, the enterprise must make provisions for price reduction of trading securities during the period, recording:

Debit account 635 – Financial expenses

Credit account 229 – Provision for asset losses (2291).

1. b) At the end of the following accounting periods:

– If the amount of provision for devaluation of trading securities that must be set up this period is greater than the amount of provision made in the previous period, the enterprise shall set up additional provision for the difference, recording:

Debit account 635 – Financial expenses

Credit account 229 – Provision for asset losses (2291).

– If the amount of provision for devaluation of trading securities that must be set up this period is less than the amount of provision set up in the previous period, the enterprise shall reverse the difference and record:

Debit account 229 – Provision for asset losses (2291)

Credit account 635 – Financial expenses.

1. c) When transferring trading securities that are not yet traded on the stock market, the enterprise shall handle the provisioned amount (if any) in the following cases:

– In case of profit, record:

Debit account 111, 112, 131… (Total amount collected)

Debit account 229 – Asset loss provision (the provision amount set up corresponds to the sold trading securities)

Credit account 121 – Trading securities (cost price)

Have account 515 – Financial revenue (difference).

– In case of loss, record:

Debit accounts 111, 112,… (Total amount collected)

Debit account 229 – Provision for asset losses (2291) (the provision amount set up corresponds to the sold trading securities)

Debit account 635 – Financial expenses (Difference between actual loss and provision amount)

Credit account 121 – Trading securities (original price of trading securities).

The reversal of provisions made for trading securities may be recorded immediately for each transaction at the time of transfer of trading securities or when determining the amount of provisions made for devaluation of trading securities at the end of each accounting period, but must be consistent with the provisions of Vietnamese accounting standards.

3.2. Accounting method for provision for loss on investment in other entities

1. a) At the end of the accounting period, if there is any sign or evidence that the investment in another unit of the enterprise may be lost or its value may decrease , the enterprise must make a provision for investment loss in other units during the period, recording:

Debit account 635 – Financial expenses

Credit account 229 – Provision for asset losses (2292).

1. b) At the end of the following accounting periods:

– If the amount of provision for investment losses in other units that must be set up this period is greater than the amount of provision set up in the previous period, the enterprise shall set up additional provision for the difference, recording:

Debit account 635 – Financial expenses

Credit account 229 – Provision for asset losses (2292).

– If the amount of provision for investment losses in other units that must be set up this period is less than the amount of provision set up in the previous period, the enterprise shall reverse the difference and record:

Debit account 229 – Provision for asset losses (2292)

Credit account 635 – Financial expenses.

1. c) When liquidating or selling investments in other entities where the recovered value is lower than the original cost, the enterprise decides to use the provision for investment losses in other entities that has been set up to compensate for the loss , and records:

Debit accounts 111, 112,… (recovery value)

Debit account 229 – Provision for asset losses (2292) (amount of provision made)

Debit account 635 – Financial expenses (amount not yet provisioned)

There are accounts 221, 222, 228,… (original cost of lost investment).

The reversal of provisions made for investments in other entities may be recorded immediately for each transaction at the time of recovery or when determining the amount of provisions for investment losses at the end of each accounting period, but must be consistent with the provisions of Vietnamese accounting standards.

3.3. Accounting method for provision for doubtful debts

1. a) At the end of the accounting period, if there is any sign or evidence that the enterprise is unlikely to recover or is unable to recover part or all of the enterprise’s receivables, the enterprise must make provisions for doubtful debts during the period, recording:

Debit account 642 – Business management costs

Credit account 229 – Provision for asset losses (2293).

1. b) At the end of the following accounting periods:

– If the amount of provision for doubtful debts to be set up this period is greater than the amount of provision set up in the previous period , the enterprise shall set up additional provision for the difference, recording:

Debit account 642 – Business management costs

Credit account 229 – Provision for asset losses (2293).

– If the amount of provision for bad debts to be set up this period is less than the amount of provision set up in the previous period, the enterprise shall reverse the difference and record:

Debit account 229 – Provision for asset losses (2293)

Credit account 642 – Business management costs.

1. c) For receivables determined to be difficult to collect or impossible to collect, the enterprise shall write off the receivables. Based on the debt cancellation decision, record:

Debit accounts 111, 112, 331, 334… (part of compensation that organizations and individuals must pay)

Debit account 229 – Provision for asset losses (2293) (part of provision)

Debit account 642 – Business management costs (part included in expenses)

There are accounts 131, 138,…

At the same time, the enterprise opens a detailed book to track bad debts that have been handled according to regulations.

1. d) For bad debts that have been written off, if the enterprise recovers them later, the enterprise shall base on the actual value of the recovered debt to record:

Debit accounts 111, 112,…

Credit account 711 – Other income.

1. d) For receivables sold at agreed prices, depending on each actual case, the enterprise records as follows:

– In case the receivable debt has not been provisioned for doubtful debts, record:

Debit accounts 111, 112 (according to agreed selling price)

Debit account 642 – Business management expenses (loss from debt sale) (if any)

There are accounts 131, 138,…

– In case an enterprise sells receivables that have been provisioned for bad debts but the amount of provision is not enough to offset the loss when selling the receivables, the remaining loss (if any) is accounted for in the enterprise’s management expenses, recorded as follows :

Debit accounts 111, 112 (according to agreed selling price)

Debit account 229 – Provision for asset loss (2293) (amount of provision made)

Debit account 642 – Business management expenses (remaining loss from selling receivables)

There are accounts 131, 138,…

The reversal of provisions for doubtful debts may be recorded immediately for each transaction at the time of sale of the receivable or when determining the amount of provisions for doubtful debts at the end of each accounting period but must be consistent with the provisions of Vietnamese accounting standards.

3.4. Accounting method for inventory price reduction provisions

1. a) At the end of the accounting period, if the net realizable value is lower than the original price of the inventory, the enterprise must make a provision for inventory devaluation during the period, recording:

Debit account 632 – Cost of goods sold

Credit account 229 – Provision for asset losses (2294).

1. b) At the end of the following accounting periods:

– If the amount of inventory price reduction provision to be set up this period is greater than the amount of provision set up in the previous period, the enterprise shall set up an additional provision for the difference, recording:

Debit account 632 – Cost of goods sold

Credit account 229 – Provision for asset losses (2294).

– If the amount of inventory price reduction provision to be set up this period is less than the amount of provision set up in previous periods, the enterprise shall reverse the difference and record:

Debit account 229 – Provision for asset losses (2294)

Credit account 632 – Cost of goods sold.

1. c) Accounting for handling inventory depreciation provisions for materials and goods that are destroyed due to expiration, loss of quality, damage, or no longer of use value, records:

Debit account 229 – Asset loss reserve (amount offset by reserve)

Debit account 632 – Cost of goods sold ( if the loss is higher than the provisioned amount)

There are accounts 152, 153, 155, 156,…

The reversal of provisions made for inventories may be recorded immediately for each transaction at the time the inventory is disposed of or when determining the amount of provisions for inventory devaluation at the end of each accounting period but must be consistent with the provisions of Vietnamese accounting standards.

3.5. Accounting method for provision for loss of biological assets

1. a) At the end of the accounting period, if the net realizable value is lower than the original price of the biological asset, the enterprise must make a provision for the loss of biological assets during the period, recording:

Debit account 632 – Cost of goods sold

Credit account 229 – Provision for asset losses (2295).

1. b) At the end of the following accounting periods:

– If the amount of biological asset reserves to be set up this period is greater than the amount of reserves set up in the previous period, the enterprise shall set up additional provisions for the difference, recording:

Debit account 632 – Cost of goods sold

Credit account 229 – Provision for asset losses (2295).

– If the amount of biological asset reserves to be set up this period is less than the amount of reserves set up in previous periods , the enterprise shall reverse the difference and record:

Debit account 229 – Provision for asset losses (2295)

Credit account 632 – Cost of goods sold.

1. c) In case an enterprise suffers loss of biological assets due to natural disasters, floods, etc., based on the value of the lost biological assets, record:

Debit account 229 – Asset loss reserve (amount offset by reserve)

Debit account 632 – Cost of goods sold (if the loss is higher than the provisioned amount)

Credit account 215 – Biological assets

 

ACCOUNT 241 – CONSTRUCTION IN PROGRESS

1. Accounting principles
2. a) This account is only used in units that do not establish a project management board to reflect the costs of implementing construction investment projects (including purchasing new fixed assets; basic construction of new fixed assets; periodic repair and maintenance; upgrading and renovating fixed assets to increase capacity or extend the usage time, increase economic benefits of fixed assets) and the settlement of construction investment costs in enterprises.

Investment in construction and repair, periodic maintenance or upgrading and renovation of fixed assets of an enterprise can be carried out by contracting or self-made method. In enterprises that invest in construction and repair by self -made method, this account reflects all costs incurred during the construction and repair process.

1. b) The cost of implementing construction investment projects is the total cost necessary to build new ones or repair, upgrade, renovate, expand or re-equip technical works. The determination of construction investment costs is carried out in accordance with the provisions of the current law on management of construction investment costs. Only costs directly related to investment activities in construction of fixed assets and investment real estate (which are necessary and unavoidable costs when implementing construction investment activities) and the process of investing in construction of unfinished assets that is not abnormally interrupted due to slow implementation or slow progress compared to the expected construction time, etc. are capitalized into the value of fixed assets and investment real estate.

Borrowing costs directly related to the loan (other than interest payable), such as appraisal, auditing, loan application preparation, loan arrangement costs, etc., are accounted for in financial expenses, except in cases where these borrowing costs arise from a separate loan for investment, construction or production purposes. Unfinished assets that satisfy the conditions specified in Vietnamese Accounting Standard No. 16 – Borrowing costs are capitalized. In case of borrowing to invest in subsidiaries, joint ventures, associates, etc., borrowing costs are not capitalized.

Account 241 is opened in detail for each project and construction item. Each construction item must be accounted for in detail for each content of construction investment costs and monitored cumulatively from the commencement of construction until the project or construction item is completed in a state capable of operating in the manner intended by the enterprise and is accepted.

In case the project or project item that the enterprise is investing in construction or cooperating in business to invest in construction but cannot continue to implement the project, the enterprise must base on the practical situation to assess the ability to recover the investment costs of construction and installation that have been spent , the difference, if any, will be accounted for in the business results of the enterprise in period

1. c) When investing in construction and equipment, construction and installation costs are often calculated directly for each project and project item; project management costs and other costs are often shared. Enterprises must calculate and allocate project management costs and other costs for each project and project item according to the following principles:

– If project management costs and other costs directly related to each project or construction item can be determined separately, they will be calculated directly for that project or construction item;

– Project management costs and other general costs related to many projects and construction items that cannot be directly calculated for each project or construction item shall be allocated by the unit according to the most appropriate criteria for each project or construction item.

1. d) In case the project has been completed and put into a state capable of operating in the manner intended by the enterprise but the project settlement has not been approved, the enterprise shall record an increase in the original value of fixed assets at the provisional price (the provisional price must be based on actual costs incurred and estimated costs that will certainly have to be spent to obtain the fixed assets) to depreciate the fixed assets, but must then adjust according to the approved settlement price.
2. d) Regular repair and maintenance costs for fixed assets in normal operation are directly accounted for in the production and business costs of the period of the department using the fixed assets. For fixed assets that require periodic repair and maintenance according to technical requirements, the enterprise is allowed to deduct repair and maintenance costs in advance (if required) or calculate the repair and maintenance costs incurred into expenses. awaiting allocation and periodically allocated to the production and business costs of the department using fixed assets. For costs arising after initial recognition related to upgrading and renovation to increase capacity or extend the usage time of fixed assets, they are accounted for as an increase in the original cost of fixed assets.
3. e) Real estate construction enterprises use this account to collect construction costs of fixed assets or investment real estate. In case the construction real estate is used for multiple purposes (as an office, for rent or for sale, for example, a mixed-use building), the enterprise still collects costs directly related to the construction investment on Account 241 – Unfinished basic construction. When the construction or project is completed and handed over for use, the enterprise bases on the actual way of using the asset to transfer the construction investment costs in accordance with the nature of each type of asset.
4. g) During the construction investment phase to form fixed assets or investment real estate, enterprises are not allowed to capitalize exchange rate differences into the value of unfinished assets.
5. h) In case an investment project is cancelled or suffers losses, the enterprise must liquidate and recover the costs incurred in the project. The difference between the actual investment costs incurred and the amount collected from liquidation is recorded in other expenses or the compensation responsibility of the organization or individual is determined for recovery.
6. i) For perennial trees that periodically produce products that satisfy the criteria of fixed assets (tea, coffee, rubber, pepper, fruit trees, etc.), the costs of land reclamation, land preparation, planting, tree care, etc. during the construction period ( before the maturity stage, when the first product begins to be produced) are reflected in Account 241 – Construction in progress. When the perennial trees that periodically produce products mature and begin to produce products, the enterprise transfers from Account 241 – Construction in progress to Account 211 – Tangible fixed assets.

Account 241 – Construction in progress, has 4 sub-accounts:

– Account 2411 – Fixed Asset Purchase: Reflects the cost of purchasing fixed assets and the settlement of fixed asset purchase costs in cases where they must be installed and tested before being put into use (including purchasing new or used fixed assets). If the purchased fixed assets require additional investment and equipment before they can be used, all costs of purchasing and equipment are also reflected in this account.

– Account 2412 – Basic construction: Reflects the cost of capital investment in construction and the settlement of capital investment in construction. This account is opened in detail for each project and project item (according to each asset formed through investment) and for each asset, each content of capital investment cost in construction must be monitored in detail.

– Account 2413 – Periodic repair and maintenance of fixed assets : Reflects the cost of periodic repair and maintenance of fixed assets and the settlement of costs of periodic repair and maintenance of fixed assets. In case of regular repair of fixed assets, it is not recorded in this account but is recorded directly in the production and business expenses of the period.

– Account 2414 – Upgrading and renovating fixed assets: Reflects the costs of upgrading and renovating fixed assets and the settlement status of costs of upgrading and renovating fixed assets.

2. Structure and content of Account 241 – Construction in progress

Debit:

– Cost of purchasing fixed assets and investment real estate (in case there is a need for construction investment or installation and testing phase);

– Investment costs for construction of fixed assets or real estate;

– Cost of upgrading and renovating fixed assets;

– Cost of periodic repair and maintenance of fixed assets.

Creditor:

– Value of fixed assets or investment real estate formed through purchase, completed construction investment and put into a state capable of operating in the manner intended by the enterprise;

– The value of the completed upgrading and renovation project of fixed assets or investment real estate will be transferred when the settlement is approved;

– Settlement of repair and periodic maintenance costs of fixed assets when the fixed assets are completed, handed over and put into use;

– The value of the eliminated works and other approved elimination costs are transferred when the settlement is approved;

Debit Balance:

– Costs of purchasing, investing in construction, repairing, periodic maintenance and upgrading of unfinished fixed assets at the end of the accounting period;

– Value of unfinished real estate construction investment at the end of the accounting period;

– Value of construction works and periodic repairs, maintenance, upgrading and renovation of fixed assets that have been completed but not yet handed over for use or the settlement has not been approved at the end of the accounting period.

3. Accounting methods for some major economic transactions

3.1. Accounting for fixed assets purchased must be installed and tested.

1. a) In case of trial costs arising but no product is obtained, based on accounting documents related to the purchase of fixed assets, record:

Debit account 241 – Construction in progress

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112,…

– When trial production costs arise, the enterprise collects them into account 241 to calculate the original price of fixed assets, based on related accounting documents, and records:

Debit account 241 – Construction in progress

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112,…

1. b) In case the trial cost includes products and trial scrap:

– When trial costs arise that create trial products, the enterprise collects all trial costs into the cost of production and unfinished business to calculate the cost of the trial product, recording:

Debit account 154 – Cost of production and unfinished business

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 152, 331,…

– When entering the trial product into the warehouse, record:

Debit account 155 – products

Credit account 154 – Cost of production and business in progress.

– When selling trial products:

+ Reflects sales revenue from trial products:

Debit accounts 111, 112,…

There are accounts 154, 155

Credit account 3331 – VAT payable (if any)

– Transfer the difference between trial production costs and revenue from selling trial production products:

+ In case the trial production cost is higher than the revenue from selling trial production products, the enterprise transfers the difference to record an increase in unfinished construction investment costs, recording:

Debit account 241 – Construction in progress

Credit account 154 – Cost of production and business in progress.

+ In case the trial production cost is less than the revenue from selling trial production products, the enterprise transfers the difference to reduce the investment cost of unfinished construction and works, recording:

Debit account 154 – Cost of production and unfinished business

Credit account 241 – Construction in progress.

1. c) When the trial run is completed and the fixed asset is handed over to a state capable of operating in the manner intended by the enterprise, record:

Debit account 211 – Tangible fixed assets

Credit account 241 – Construction in progress.

3.2. Accounting for construction investment costs

3.2.1. In case of advance payment to construction contractors, periodic repairs, maintenance or upgrading and renovation of fixed assets, based on related documents:

– Record the amount of advance payment to the contractor according to the contract, record

Debit account 331 – Payable to sellers

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112,…

– When receiving completed construction, repair, periodic maintenance or upgrading and renovation of fixed assets from the contractor, based on related documents, record:

Debit account 241 – Construction in progress (2412, 2413, 2414)

Debit account 133 – Deductible VAT (if any)

Credit account 331 – Payable to sellers.

3.2.2. Receive the completed construction volume, repair volume, periodic maintenance or upgrading, renovation of fixed assets handed over by the contractor or when construction investment costs arise by the self-made method, based on related documents, record:

Debit account 241 – Construction in progress (2412, 2413, 2414)

Debit account 133 – Deductible VAT (1332) (if any)

There are accounts 111, 112, 331, 335,…

3.2.3. When purchasing construction investment equipment, based on invoices and warehouse receipts, record:

Debit account 152 – Raw materials and supplies

Debit account 133 – Deductible VAT (1332) (if any)

Credit account 331 – Payable to sellers (total payment price).

In case of transferring equipment directly without installation to the construction site and handing it over to the contractor, record:

Debit account 241 – Construction in progress

Debit account 133 – Deductible VAT (1332) (if any)

Credit account 331 – Payable to sellers

Account 151 – Goods in transit.

3.2.4. Payment to contractors, suppliers of materials, goods and services related to construction investment, record:

Debit account 331 – Payable to sellers

There are accounts 111, 112,…

3.2.5. Export of construction investment equipment to the contractor:

1. a) For equipment that does not require installation, record:

Debit account 241 – Construction in progress

There is account 152 – Raw materials, materials.

1. b) For equipment to be installed:

– When delivering equipment to the contractor, the enterprise only tracks the details of the equipment being installed.

– When the completed installation volume is handed over by the contractor, accepted and accepted for payment, the value of the equipment to be installed will be included in the construction investment cost, recorded as:

Debit account 241 – Construction in progress (2412)

There is account 152 – Raw materials, materials.

3.2.6. When borrowing costs arise (including loan interest and costs to obtain the loan) if capitalized according to regulations, bidding costs (after offsetting with the amount collected from selling bidding documents), demolition costs to return the site (after offsetting with the amount of recoverable scrap)… record:

Debit account 241 – Construction in progress (2412)

Debit account 133 – Deductible VAT (1332) (if any)

There are accounts 111, 112, 331, 335, 3411, 343…

The remaining amount of money from selling bidding documents after deducting bidding costs is accounted for as a reduction in construction investment costs (recorded in the credit side of account 241).

3.2.7. The amount of penalty collected by the contractor, if its nature reduces the amount payable to the contractor, is recorded as:

Debit accounts 112, 331

There is account 241 – Construction in progress.

3.2.8. When the construction work or construction item is completed, the acceptance of the construction work or construction item has been completed, the assets are handed over and the fixed assets are put into a state capable of operating in the manner intended by the enterprise:

+ If the settlement is approved immediately, the value of assets formed through approved investment will be used as the basis for recording.

+ If the settlement has not been approved, record an increase in the value of assets formed through investment at the provisional price (the provisional price is the actual cost spent to acquire the asset, based on account 241 to determine the provisional price).

Both cases are recorded as follows:

Debit accounts 211, 213, 217

Credit account 241 – Construction in progress (approved price or provisional price).

– In case of construction and development expenses that are not approved by competent authority and must be recovered, record:

Debit account 138 – Other receivables

Credit account 241 – Construction in progress

– In case the project has been completed but has not been accepted and the procedures for handing over assets to put into use have not been completed, and is waiting for the preparation or approval of the final settlement, the enterprise must open a detailed account 241 – Construction in progress to separately monitor the completed project awaiting handover and final settlement approval.

3.2.9. When the final settlement of completed construction investment capital is approved, the enterprise shall readjust the provisional price according to the approved asset value, recording:

– If the value of assets formed through approved construction investment is lower than the provisional price:

Debit account 138 – Other receivables (if the competent authority decides that the unapproved expenses must be recovered)

There are accounts 211, 213, 217,…

– In case the value of assets formed through approved construction investment is higher than the provisional price or higher than the basic construction investment cost (if any according to the provisions of law), based on the decision of the competent authority on handling the higher value, record:

Debit accounts 211, 213, 217, 155,…

There are related accounts.

– If fixed assets are formed from welfare funds and used for welfare purposes, when the investor approves the investment capital settlement, the enterprise records an increase in the welfare fund that has formed the fixed assets:

Debit account 3532 – Welfare fund

Account 3533 – Welfare fund has formed fixed assets.

3.2.10. In case an investment project is cancelled or revoked, the enterprise liquidates the project and recovers the investment costs. The difference between the investment costs and the amount collected from the liquidation is reflected in other expenses or the compensation responsibility of the organization or individual is determined according to the handling decision of the competent authority, recorded:

Debit accounts 111, 112 (Proceeds from project liquidation)

Debit account 138 – Other receivables (Number of organizations and individuals that must compensate)

Debit account 811 – Other expenses (Amount included in other expenses)

There is account 241 – Construction in progress.

3.2.11. In case the enterprise is an investor and has established a dependent unit, which is a Project Management Board, to perform accounting work for construction investment activities:

1. a) Accounting at the investor:

– In case of receiving the handover of a settled project, the investor records the value of the project as the settled price, recording:

Debit accounts 211, 213, 217,…

Debit account 133 – Deductible VAT (if any)

Debit accounts 111, 112, 152, 153

Credit account 136 – Internal receivables

There are accounts 331, 333,… (receive payables if any).

– In case of receiving the handover of a project that has not been settled, the investor records the project value as a provisional price. When settling, the project value must be adjusted according to the settled price, and recorded:

+ If the final price is greater than the estimated price, record:

Debit accounts 211, 213, 217,…

There are related accounts.

+ If the final price is less than the estimated price, record:

Debits to related accounts

There are accounts 211, 213, 217,…

1. b) Accounting at the Project Management Board: Depending on the characteristics of the business production activities and management requirements of the enterprise, the enterprise shall guide the accounting work for the Project Management Boards under the enterprise in accordance with the guiding principles in Article 7 of this Circular , regulations of the law on construction investment and other relevant laws.

3.3. Accounting for periodic repair and maintenance of fixed assets

Repair work of fixed assets of enterprises can also be carried out by self-doing or contracting.

1. a) When the cost of repair and periodic maintenance of fixed assets arises, it is collected into the Debit side of Account 241 – Construction in progress (2413) and detailed for each project and repair work of fixed assets. Based on the arising documents related to the expenses to account for:

– If input VAT is deductible, record:

Debit account 241 – Construction in progress (2413) (purchase price excluding VAT)

Debit account 133 – Deductible VAT (1332)

There are accounts 111, 112, 152, 214,… (total payment amount).

– If input VAT is not deductible, the cost of repairing fixed assets including VAT, record:

Debit account 241 – Construction in progress (2413) (total payment price)

There are 111, 112, 152, 214, 334,… (total payment price).

1. b) When the project or project item undergoing periodic repair and maintenance is completed, handed over and put into use:

– Transfer periodic repair and maintenance costs to pending allocation costs, record:

Debit account 242 – Expenses awaiting allocation (periodic repair and maintenance expenses are gradually allocated)

Credit account 241 – Construction in progress (2413).

– Gradually allocate to production and business costs of the using department:

Debit accounts 623, 627, 641, 642,…

Credit account 242 – Expenses awaiting allocation

3.4. Accounting for upgrading and renovating fixed assets

– Collect costs for upgrading and renovating fixed assets, record:

Debit account 241 – Construction in progress (2414)

There are accounts 112, 331,…

– Transferring the increase in original cost of fixed assets when the renovation and upgrading of fixed assets is completed and handed over for use:

+ In case upon handover, the project has been settled immediately, record:

Debit account 211 – Tangible fixed assets

Credit account 241 – Construction in progress (2414).

+ In case of receiving the handover of a project that has not been settled, the investor records the value of the project as a provisional price, the accounting is similar to the basic construction of new fixed assets.

 

ACCOUNT 242 – EXPENSES PENDING FOR ALLOCATION

1. Accounting principles
2. a) This account is used to reflect actual costs incurred (including prepaid costs and unpaid costs) but related to the business performance of many accounting periods and the allocation of these costs to the business performance of the following accounting periods.
3. b) The contents reflected as costs awaiting allocation include:

– Costs of infrastructure rental and fixed asset operating rental (land use rights, factories, warehouses, offices, shops and other fixed assets) incurred to serve production and business for many accounting periods.

– Insurance costs (fire and explosion insurance, civil liability insurance for vehicle owners, auto insurance, property insurance, etc.) and expenses that the enterprise has paid at once for many accounting periods;

– Tools, equipment, circulating packaging, and rental equipment related to business operations in many accounting periods;

– Periodic repair and maintenance costs of fixed assets related to business operations over many accounting periods;

– The difference between the selling price and the remaining value of the fixed asset sold and leased back is a financial lease;

– The difference between the selling price and the fair value of the fixed assets sold and leased back is an operating lease;

– Goodwill arising from a business combination that does not form a parent company – subsidiary (purchase of net assets), except in the case of a business combination under common control;

– Other pending allocation expenses that do not satisfy the conditions of being fixed assets, such as other expenses arising in relation to many periods, costs for reading documents on resource and mineral exploitation, etc.

1. c) The calculation and allocation of costs awaiting allocation into production and business costs for each period must be based on the nature and level of each type of cost to select the appropriate allocation method and criteria. For example , for repair and periodic maintenance costs of fixed assets related to many accounting periods, the expected allocation time can be calculated from the time the fixed assets are repaired and maintained and put into use until the next periodic repair or maintenance is needed, or for tools, equipment, circulating packaging, and rental items related to business activities in many accounting periods, the allocation time can be the expected useful life of the tools, equipment, circulating packaging, or rental items, etc.
2. d) Enterprises must monitor in detail each expense item awaiting allocation by period, the amount incurred, the amount allocated to cost-bearing objects of each accounting period, and the remaining amount not yet allocated to expenses.
3. Structure and content of Account 242 – Expenses awaiting allocation

Debit:

The expenses awaiting allocation during the period.

Creditor:

The expenses awaiting allocation have been included in the production and business costs of the period.

Debit Balance:

The expenses awaiting allocation have not been included in the production and business costs of the period at the end of the accounting period.

3. Accounting methods for some major economic transactions
4. a) When expenses arise that must be gradually allocated to production and business costs of many periods, based on related accounting documents, record:

Debit account 242 – Expenses awaiting allocation

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 153, 331, 334, 338,…

Periodically allocate pending costs to production and business costs of each period, record:

Debit accounts 623, 627, 635, 641, 642,…

Credit account 242 – Expenses awaiting allocation.

1. b) When paying in advance for fixed asset rental, infrastructure rental under the operating lease method and serving business operations for many periods, record:

Debit account 242 – Expenses awaiting allocation

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112,…

1. c) When issuing tools, equipment, circulating packaging, and rental equipment related to production and business activities for many periods, record:

– When using or leasing, record:

Debit account 242 – Expenses awaiting allocation

There is account 153 – Tools and equipment.

– Periodically, allocate the value of tools, equipment, circulating packaging, and rental items that have been released from the warehouse according to reasonable criteria depending on the characteristics of production and business activities and management requirements of the enterprise, for example, the time of use or the level and volume of products and services that tools, equipment, circulating packaging, and rental items participate in production and business activities in each accounting period, etc. When allocating, record:

Debit accounts 623, 627, 641, 642,…

Credit account 242 – Expenses awaiting allocation.

1. d) In case the cost of periodic repair and maintenance of fixed assets is related to many accounting periods, when the periodic repair and maintenance work is completed:

– Transfer the cost of periodic repair and maintenance of fixed assets to the expense account awaiting allocation, record:

Debit account 242 – Expenses awaiting allocation.

Credit account 241 – Construction in progress (2413).

– Periodically, calculate and allocate costs of periodic repair and maintenance of fixed assets into production and business costs in each period, record:

Debit accounts 623, 627, 641, 642,…

Credit account 242 – Expenses awaiting allocation.

1. d) Goodwill arising at the date of acquisition in the case of a business combination that does not result in a parent-subsidiary relationship (purchase of a business), except in the case of a business combination under common control as prescribed:

– If the purchase or sale during a business merger is paid by the buyer in cash or cash equivalents, record:

Debit accounts 131, 138, 152, 153, 155, 156, 211, 213, 217…. (according to the fair value of the purchased assets)

Debit account 242 – Expenses awaiting allocation (details of commercial advantage)

There are accounts 331, 3411, … (according to the fair value of liabilities and potential liabilities to be incurred)

There are accounts 111, 112, 121 (cash or cash equivalents paid by the buyer).

– If the purchase and sale during a business merger is made by the buyer issuing shares, record:

Debit accounts 131, 138, 152, 153, 155, 156, 211, 213, 217,… (according to the fair value of the purchased assets)

Debit account 242 – Expenses awaiting allocation (details of commercial advantage)

Debit account 4112 – Capital surplus (issue price is less than par value) (if any)

Credit account 4111 – Owner’s equity (at par value)

There are accounts 331, 3411… (according to the fair value of payables and potential liabilities to be incurred)

Credit account 4112 – Capital surplus (issue price greater than par value) (if any).

 

ACCOUNT 243 – DEFERRED INCOME TAX ASSETS

1. Accounting principles
2. a) This account is used to reflect the current value and the increase and decrease of deferred income tax assets.

Deferred income tax assets

=

Deductible temporary difference

+

Carry-over of unused tax losses and tax credits

x

Current corporate income tax rate (%)

In case at the time of recording deferred income tax assets, it is known in advance that there will be a change in the corporate income tax rate in the future, if the reversal of the deferred income tax asset falls within the period when the new tax rate has taken effect, the tax rate applied to record the tax asset shall be calculated according to the new tax rate.

1. b) Tax base of assets or liabilities and Temporary differences:

– The tax base of an asset is the amount that will be deducted from taxable income when the book value of the asset is recovered. If the income is not taxable, the tax base of the asset is equal to the book value of that asset. The tax base of a liability is its book value minus (-) the amount that will be deducted from taxable income when the liability is paid in future periods. For revenue received in advance, the tax base is its book value, minus (-) the amount of revenue that is not taxable in the future.

– Temporary differences are the differences between the carrying amount of assets or liabilities in the Statement of Financial Position and the tax base of those assets or liabilities. Temporary differences are of two types: Deductible temporary differences and Taxable temporary differences. Deductible temporary differences are temporary differences that give rise to deductible amounts when determining taxable income in the future when the carrying amount of assets is recovered or liabilities are settled.

+ Temporary timing differences are just one of the cases of temporary differences, for example, temporary timing differences in corporate income tax expenses paid additionally to the state budget according to the regulations on global minimum tax (if any) between the arising period and the declaration period or other cases where accounting profit is recorded in this period but taxable income is calculated in another period.

+ Temporary differences between the book value of an asset or liability and the tax base of that asset or liability may not be temporary differences in time, for example: When revaluing an asset, the book value of the asset changes but if the tax base does not change, a temporary difference arises. However, the time to recover the book value and the tax base does not change, so this temporary difference is not a temporary difference in time.

+ Accountants do not continue to use the concept of “Permanent difference” to distinguish it from temporary difference when determining deferred income tax because the time to recover assets or pay liabilities as well as the time to deduct those assets and liabilities from taxable income is limited.

1. c) If the enterprise expects to have future taxable profits against which to utilize the deductible temporary differences, unused tax losses and unused tax incentives, the enterprise shall recognize deferred income tax assets for:

– All temporary differences are deductible (except temporary differences arising from the initial recognition of an asset or liability in a transaction that is not a business combination; and which affect neither accounting profit nor taxable income (or tax loss) at the time of the transaction).

– The remaining deductible value of unused tax losses and tax incentives carried forward to the following year.

1. d) At the end of the year, the enterprise must prepare a “Table of determining deductible temporary differences”, “Table of tracking unused deductible temporary differences”, the deductible value carried forward to the following year of unused tax losses and tax incentives as the basis for preparing a “Table of determining deferred income tax assets” to determine the value of deferred income tax assets recorded or reversed in the year.
2. d) The recognition of deferred income tax assets during the year is carried out according to the principle of offsetting between deferred income tax assets arising this year and corporate income tax assets recorded in previous years but reversed this year, according to the principle:

– If the deferred income tax asset arising in the year is greater than the deferred income tax asset reversed in the year, the difference is recorded as a deferred income tax asset and a reduction in deferred income tax expense is recorded.

– If the deferred income tax asset arising in the year is less than the deferred income tax asset reversed in the year, the difference is recorded as a decrease in the deferred income tax asset and an increase in the deferred income tax expense.

1. e) Enterprises must reverse deferred income tax assets when the deductible temporary differences no longer affect taxable profits (when the assets are recovered or the liabilities are settled in part or in full), when tax losses or tax incentives have been used.
2. g) When preparing the Financial Statements, if it is certain that there will be taxable income in the future, the deferred income tax assets not yet recognized from previous years are additionally recorded to reduce the deferred income tax expense.
3. h) Offsetting of deferred income tax assets and deferred income tax liabilities is only performed when preparing the Financial Position Statement, not when recording deferred income tax assets in the accounting books.
4. Structure and content of Account 243 – Deferred income tax assets

Debit:

Deferred tax assets increase.

Creditor:

Deferred tax assets decrease.

Debit Balance:

The remaining deferred income tax asset value at the end of the accounting period.

3. Accounting methods for some major economic transactions
4. a) If the deferred income tax asset arising in the year is greater than the deferred income tax asset reversed in the year, the enterprise records an increase in deferred income tax assets by the difference between the amount of deferred income tax asset arising and the amount reversed in the year, and records:

Debit account 243 – Deferred income tax assets

Credit account 8212 – Deferred corporate income tax expense.

1. b) If the deferred income tax asset arising in the year is less than the deferred income tax asset reversed in the year, the enterprise shall record a decrease in the deferred income tax asset by the difference between the deferred income tax asset arising and the amount reversed in the year, and record:

Debit account 8212 – Deferred corporate income tax expense

Credit account 243 – Deferred income tax assets.

 

ACCOUNT 244 – DEPOSIT, BET

1. Accounting principles
2. a) This account is used to reflect the amount of money that the enterprise deposits or bets with other enterprises and organizations in economic relations as prescribed by law. The enterprise does not use this account to reflect the assets that the enterprise uses as collateral or mortgage.
3. b) Deposits and bets must be closely monitored and promptly recovered when the deposit or bet expires. In case the enterprise’s deposits and bets are overdue but have not been recovered or are unlikely to be recovered, the enterprise may set up a provision for asset losses similar to the provision for bad debts.
4. c) Enterprises must monitor in detail the deposits and bets by type, subject, term, and currency. When preparing the Financial Statements, deposits and bets with a remaining term of 12 months or less are classified as short-term assets; those with a remaining term of more than 12 months are classified as long-term assets.
5. d) In case an enterprise has deposits or bets that are foreign currency items, when preparing the Financial Statements, it must be re-evaluated according to the average transfer exchange rate of the commercial bank where the enterprise regularly conducts transactions at the end of the accounting period.
6. d) When an enterprise pledges or mortgages a certificate of ownership or use of assets (such as a certificate of ownership or use of real estate, a savings book, etc.), the enterprise does not record a decrease in assets but must open a detailed tracking book and present in the notes to the Financial Statements the use of the certificate of ownership or use of assets pledged or mortgaged.
7. Structure and content of Account 244 – Deposits and bets

Debit:

– Amount deposited, bet;

– Exchange rate difference due to revaluation of deposit and wager balances is a foreign currency item at the end of the accounting period (in case the foreign currency exchange rate increases compared to the accounting currency).

Creditor:

– Deposit or bet amount received or paid;

– Deductions (e.g. fines) from deposits, bets (if any);

– Exchange rate difference due to revaluation of deposit and wager balances is a foreign currency item at the end of the accounting period (in case the foreign currency exchange rate decreases compared to the accounting currency).

Debit Balance:

Amount remaining on deposit or bet at the end of the accounting period.

3. Accounting methods for some major economic transactions
4. a) Use cash or non-term deposits as collateral, bet, record:

Debit account 244 – Deposit, bet

There are accounts 111 and 112.

1. b) When receiving back the deposit or bet, record:

Debit accounts 111, 112

Credit account 244 – Deposit, bet.

1. c) In case the enterprise fails to fulfill its commitments and is fined for breach of contract, the deposit or bet shall be deducted, record:

Debit account 811 – Other expenses (deducted amount)

Credit account 244 – Deposit, bet.

1. d) In case of using deposit or security deposit to pay to seller, record:

Debit account 331 – Payable to sellers

Credit account 244 – Deposit, bet.

 

PRINCIPLES OF ACCOUNTING FOR LIABILITIES PAYABLE

1. The contents of payable debts include: Payable to sellers; Payable dividends, profits; Taxes and amounts payable to the State; Payable to employees; Expenses payable; Internal payables; Other payables and payables; Loans and financial leasing debts; Issued bonds; Received deposits and bets; Deferred income tax payable; Payable provisions; Reward and welfare funds; Science and technology development funds; Price stabilization funds.

Payables must be tracked in detail by subject, payment term, currency type and other factors according to the management needs of the enterprise.

2. Classification of payables is carried out according to the following principles:
3. a) Payables to sellers are commercial payables arising from transactions of purchasing goods, services, and assets from suppliers or sellers (who are independent entities from the buyer). Payables to sellers include payables between parent companies and subsidiaries, joint ventures, associated companies, and payables when importing through consignees (in consignment import transactions).
4. b) Dividends and profits payable include dividends and profits paid by the enterprise to the owners of the enterprise (shareholders, members of LLCs,…).
5. c) Internal payables include payables between the head office and affiliated units or between affiliated units.
6. d) Other payables include non-commercial payables not related to the purchase and sale of goods or provision of services:

– Payables related to financial expenses, such as: interest payable, financial investment operating expenses, etc.;

– Amounts payable by third parties; Amounts received by the trustee from the trustees for payment as specified in the import-export trust transaction;

– Payables due to borrowing non-monetary assets, payables for fines, compensation, surplus assets awaiting settlement, payables for social insurance, health insurance, unemployment insurance, union funds, etc.

3. At the end of the accounting period, the enterprise shall base on the remaining term of payables to classify them as long-term or short-term according to the principles of classifying payables prescribed in this Circular.
4. When there is evidence that a loss is likely to occur, the enterprise must immediately record a payable according to the prudence principle.
5. Accounting principles for payables in foreign currency:

5.1. Enterprises must monitor in detail the payable debts in the original currency. When transactions related to payable debts in foreign currency arise, enterprises must convert them into the accounting currency according to the following principles:

1. a) The Credit side of the payable accounts applies the actual transaction exchange rate.
2. b) The debit side of payable accounts applies the actual transaction exchange rate or the book exchange rate.
3. c) In case the payables arise from prepayment transactions, the Debit side of the payables account shall apply the actual transaction exchange rate at the time of prepayment and upon receipt of goods, services, etc., the Credit side of the payables accounts corresponding to the prepaid foreign currencies shall apply the actual transaction exchange rate at the time of prepayment.

5.2. At the end of the accounting period, the enterprise must re-evaluate the balance of payables which are foreign currency items at the average transfer exchange rate of the commercial bank where the enterprise regularly conducts transactions.

5.3. Determination of actual transaction exchange rates, recorded exchange rates and arising transactions, and revaluation of foreign currency payables are guided in Account 413 – Exchange rate differences.

 

ACCOUNT 331 – PAYABLE TO VENDORS

1. Accounting principles
2. a) This account is used to reflect the current value and payment status of debts payable by the enterprise to sellers of materials, goods, service providers, sellers of fixed assets, investment real estate, and financial investments under signed economic contracts. This account is also used to reflect the payment status of debts payable to main and sub-contractors.
3. b) Debts payable to sellers, suppliers, and construction contractors must be accounted for in detail for each payable entity. In the details of each payable entity, this account reflects the amount of money advanced to sellers, suppliers, and construction contractors but the products, goods, services, and completed construction volume have not yet been received.
4. c) The consignor of import goods records in this account the amount payable to the seller for imported goods through the consignee of import goods as a normal payable to the seller.
5. d) When accounting for details of payables to sellers, enterprises must clearly and distinctly account for payment discounts, trade discounts, and sales discounts of sellers and suppliers if they are not yet reflected in purchase invoices.
6. Structure and content of Account 331 – Payable to sellers

Debit:

– Amount paid to sellers of materials, goods, service providers, and construction contractors;

– Amount of advance payment to sellers, suppliers, construction contractors but materials, goods, services, completed construction products have not been received and handed over;

– The amount the seller agrees to reduce the price of goods or services delivered under the contract;

– Payment discounts and trade discounts approved by the seller for the business to deduct from the debt payable to the seller;

– Value of missing or poor quality materials and goods upon inspection and return to the seller;

– Revaluation of payables to sellers in foreign currency (in case the foreign currency exchange rate decreases compared to the accounting currency).

Creditor:

– Amounts payable to sellers of materials, goods, service providers and construction contractors;

– Adjust the difference between the provisional price and the actual price of the received materials, goods and services;

– Revaluation of payables to sellers in foreign currency (in case the foreign currency exchange rate increases compared to the accounting currency).

Credit Balance:

Amounts payable to sellers, suppliers, and construction contractors at the end of the accounting period.

This account may have a debit balance. The debit balance (if any) reflects the amount advanced to the seller or the amount paid in excess of the amount payable to the seller according to the details of each specific object. When preparing the Financial Status Report, the detailed balance of each object reflected in this account must be taken to record in the two indicators on the “Assets” side and the “Capital Sources” side.

3. Accounting methods for some major economic transactions

3.1. Purchasing materials and goods to store in warehouse or purchasing fixed assets for immediate use,… without paying the seller:

1. a) In case of domestic purchase, record:

– If input VAT is deductible, record:

Debit accounts 152, 153, 156, 157, 211, 213,… (price excluding VAT)

Debit account 133 – Deductible VAT (1331)

Credit account 331 – Payable to sellers (total payment price).

– In case input VAT is not deductible, the value of materials, goods and fixed assets includes VAT (total payment price).

1. b) In case of import, record:

– Reflecting the value of imported goods including special consumption tax and environmental protection tax (if any), record:

Debit accounts 152, 153, 156, 157, 211, 213,…

Credit account 331 – Payable to sellers

Credit account 3332 – Special Consumption Tax (if any)

Credit account 3333 – Import and export tax (import tax details, if any)

Credit account 33381 – Environmental protection tax (if any).

– In case the VAT payable on imported goods is deductible, record:

Debit account 133 – Deductible VAT

Credit account 3331 – VAT payable (33312).

– In case the VAT payable on imported goods is not deductible, it must be included in the value of imported materials, goods and fixed assets, and recorded as follows:

Debit accounts 152, 153, 156, 211,…

Credit account 3331 – VAT payable (33312).

3.2. In case an enterprise implements construction investment by the method of contracting, when receiving the completed construction volume handed over by the construction contractor, based on the contract and the minutes of handover of construction volume, the invoice for completed construction volume:

– If input VAT is deductible, record:

Debit account 241 – Construction in progress (price excluding VAT)

Debit account 133 – Deductible VAT

Credit account 331 – Payable to sellers (total payment price).

– In case input VAT is not deductible, the value of construction investment includes VAT (total payment price).

3.3. When making an advance payment or paying the amount payable to the seller of materials, goods, service providers, or construction contractors, record:

Debit account 331 – Payable to sellers

There are accounts 111, 112, 341,…

3.4. When receiving a refund from the seller due to failure to provide goods or services, record:

Debit accounts 111, 112,…

Credit account 331 – Payable to sellers.

3.5. Receive services provided (transportation of goods, electricity, water, telephone, auditing, consulting, advertising, other services) from the seller:

Debit accounts 241, 242, 627, 641, 642,…

Debit account 133 – Deductible VAT (1331) (if any)

Credit account 331 – Payable to sellers (total payment price).

3.6. Payment discounts that businesses enjoy when purchasing materials and goods due to early payment are deducted from the debt payable to sellers and suppliers, recorded as:

Debit account 331 – Payable to sellers

Credit account 515 – Financial activity revenue.

3.7. In case purchased materials and goods must be returned or the seller accepts a discount due to incorrect specifications or quality, the amount is deducted from the debt payable to the seller and recorded as follows:

Debit account 331 – Payable to sellers

Credit account 133 – Deductible VAT (1331) (if any)

There are accounts 152, 153, 156,…

3.8. In case the debts payable to the seller cannot identify the creditor or have been determined to be non-debt and are recorded as an increase in the enterprise’s other income, record:

Debit account 331 – Payable to sellers

Credit account 711 – Other income.

3.9. For main contractors, when determining the value of construction volume payable to subcontractors according to signed economic contracts, based on invoices, construction price lists, minutes of acceptance of completed construction volume and subcontracting contracts, record:

Debit account 632 – Cost of goods sold (price excluding VAT)

Debit account 133 – Deductible VAT (1331)

Credit account 331 – Payable to sellers.

3.10. In case the enterprise accepts to sell products to agents to receive commission.

– When receiving goods for sale to agents, the enterprise monitors and records information about the goods received for sale to present in the Financial Statement notes.

– When selling to an agent, record:

Debit accounts 111, 112, 131,… (total payment amount)

Credit account 331 – Payable to sellers.

At the same time, the enterprise monitors and records information on goods received for sale by agents to present in the Financial Statements explanation.

– When determining the commission received by the agent, calculate it into the commission revenue from agent sales and record:

Debit account 331 – Payable to sellers

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (if any).

– When paying the delivery agent, record:

Debit account 331 – Payable to sellers

There are accounts 111, 112,…

3.11. Accounting for payables to sellers at the import consignment unit:

– When paying in advance a purchase trust amount under an import trust contract to the import trust unit opening an LC,… based on related documents, record:

Debit account 331 – Payable to sellers (details for each consignee)

There are accounts 111, 112, 341,…

– When receiving imported goods delivered by the consignee, the enterprise shall perform as for normal imported goods.

– When paying the import consignee for the amount of imported goods and costs directly related to the imported goods, based on relevant documents, record:

Debit account 331 – Payable to sellers (details for each consignee)

There are accounts 111, 112,…

– The import commission fee payable to the consignee is included in the value of imported goods, based on related documents, recorded as follows:

Debit accounts 151, 152, 156, 211,…

Debit account 133 – Deductible VAT

Credit account 331 – Payable to sellers (details for each consignee).

– Payment of tax obligations for imported goods is made in accordance with the provisions of Account 333 – Taxes and amounts payable to the State.

– The entrusted unit does not use this account to reflect the entrusted payment transactions but reflects them through Account 138 – Other receivables and Account 338 – Other payables.

 

ACCOUNT 332 – DIVIDENDS PAYABLE, PROFITS

1. Accounting principles
2. a) This account is used to reflect the amount of dividends and profits payable (in cash and non-cash assets) and the payment status of dividends and profits payable in cash to shareholders and capital contributors of the company.
3. b) The time when an enterprise records the payable dividend and profit is the time when the enterprise has no right to refuse the obligation to pay dividends and profits to shareholders and capital contributors of the company according to the provisions of relevant laws. Depending on each type of enterprise, the determination of the time and payment of dividends and profits is carried out as follows:

– For enterprises subject to regulation by securities law, the time when the investee does not have the right to refuse to pay dividends is based on the provisions of securities law.

– For the remaining enterprises, the time when the investee does not have the right to refuse to pay dividends is based on the provisions of the Enterprise Law and the Enterprise Charter.

2. Structure and content of Account 332 – Dividends and profits payable

Debit:

Dividends and profits paid in cash or non-cash assets to shareholders and capital contributors of the company.

Creditor:

Dividends and profits payable in cash or non-cash assets to shareholders and capital contributors of the company.

Credit Balance:

The amount of dividends and profits still payable to shareholders and capital contributors of the company at the end of the accounting period.

3. Accounting methods for some major economic transactions
4. a) On the date the enterprise does not have the right to refuse the obligation to pay dividends and profits to shareholders and capital contributors of the company, record:

Debit account 421 – Undistributed profit after tax

Credit account 332 – Dividends and profits payable.

1. b) In case an enterprise pays dividends or profits in cash or non-cash assets, record:

Debit account 332 – Dividends and profits payable

There are accounts 111, 112,…

 

ACCOUNT 333 – TAXES AND AMOUNTS PAYABLE TO THE STATE

1. Accounting principles
2. a) This account is used to reflect the amount payable and payment status of taxes, fees, charges and other amounts that the enterprise must pay, has paid, and must pay to the State Budget during the accounting period.
3. b) Enterprises proactively calculate, determine and declare taxes, fees, charges and other amounts payable to the State according to the law; Timely reflect in the accounting books the amount of taxes payable, paid, deducted, refunded, etc.
4. c) Indirect taxes such as VAT (including deduction method or direct method), special consumption tax, export tax, environmental protection tax and other indirect taxes are essentially third-party collections. Therefore, indirect taxes arising from the sale of products, goods and services are excluded from gross revenue figures on the Financial Statements or other reports. Enterprises can choose to record revenue and indirect taxes payable in the accounting books by one of two methods:

– Separate and record the indirect tax payable at the time of revenue recognition. According to this method, the revenue recorded in the accounting books does not include the indirect tax payable, consistent with the gross revenue figures on the Financial Statements and accurately reflecting the nature of the transaction;

– Record the amount of indirect tax payable by reducing the recorded revenue in the accounting books. According to this method, the enterprise periodically reduces the revenue for the amount of indirect tax payable, the revenue figures in the accounting books are different from the gross revenue in the Financial Statements.

In all cases, the “Sales and service revenue” and “Revenue deductions” items of the Income Statement do not include indirect taxes payable.

1. d) For refundable and reduced taxes, enterprises must clearly distinguish whether the refundable and reduced tax amount is tax paid at the purchasing stage or tax payable at the selling stage and follow the following principles:

– For the tax paid at the purchasing stage that is refunded (for example, in temporary import – re-export transactions, special consumption tax, import tax, environmental protection tax paid that are refunded upon re-export, etc.), the enterprise records a reduction in the value of purchased goods or a reduction in the cost of goods sold, or a reduction in other expenses depending on each specific case. As for the refunded input VAT, the deductible VAT amount is recorded as a reduction;

– For the tax paid at the import stage but the imported goods are not owned by the unit, when re-exported, the enterprise will record a reduction in other receivables (for example, the import tax paid on processed goods is refunded when re-exported,…);

– For the tax payable when selling goods or providing services but then reduced or refunded, the enterprise records it as other income (for example, export tax refund, reduction of special consumption tax, VAT, environmental protection tax payable when selling goods or providing services).

1. d) Obligations to the State budget in import-export entrustment transactions:

– In import-export entrustment transactions (or similar transactions), the obligation to the State budget is determined to be that of the entrusting party.

– The consignee is identified as the service provider for the consignor in preparing documents, declarations, and settlements with the State budget (the person paying taxes on behalf of the consignor).

– Account 333 – Taxes and amounts payable to the State are only used by the entrusting party, not by the entrusted party. The entrusted party, acting as an intermediary, only reflects the amount of tax payable to the State budget as payment on behalf of the entrusted party on Account 3388 – Other payables and reflects the right to receive back the amount paid on behalf of the entrusted party on Account 138 – Other receivables. The basis for reflecting the situation of the entrusting party’s performance of obligations to the State budget is as follows:

+ Upon receiving the notice of tax payable, the trustee shall hand over to the trustee all records, documents, and notices from the competent authority on tax payable as the basis for recording the tax payable on Account 333 – Taxes and amounts payable to the State.

+ Based on the receipt of payment to the State budget of the entrusted party, the entrusting party reflects the reduction of the amount payable to the State budget.

1. e) For the additional corporate income tax amount according to the regulations on global minimum tax, the enterprise must clearly explain in the Notes to the Financial Statements the period in which the tax liability arises, the tax declaration period, the criteria for allocating the tax liability of the constituent unit responsible for declaration to the constituent units not responsible for declaration, the estimated additional corporate income tax amount payable according to the regulations on global minimum tax of the enterprise, the difference between the estimated additional corporate income tax amount and the actual additional corporate income tax payable when declaring, etc. Particularly for the constituent unit responsible for declaration, it must clearly explain the tax liability of its unit and other constituent units not responsible for declaration.
2. g) Accountants must open detailed books to track each tax, fee, charge and amount payable, paid and remaining payable.
3. Structure and content of Account 333 – Taxes and amounts payable to the state

Debit:

– VAT amount deducted during the period;

– Taxes, fees, charges and amounts payable and paid to the State Budget;

– The tax amount is deducted from the tax payable;

– VAT amount of returned goods, discounted goods, trade discounts.

Creditor:

– Output VAT and import VAT payable;

– Taxes, fees, charges and other amounts payable to the State Budget.

Credit Balance:

Taxes, fees, charges and other amounts payable to the State Budget at the end of the accounting period.

In special cases, Account 333 – Taxes and amounts payable to the State may have a debit balance. The debit balance (if any) of Account 333 – Taxes and amounts payable to the State reflects the amount of taxes and amounts paid that is greater than the amount of taxes and amounts payable to the State or may reflect the amount of taxes paid that are considered for exemption, reduction or refund but have not been paid.

Account 333 – Taxes and amounts payable to the State, has 9 sub-accounts:

– Account 3331 – Value added tax payable: Reflects output VAT, VAT payable on imported goods, deducted VAT, VAT paid and payable to the State Budget.

Account 3331 has 2 sub-accounts:

+ Account 33311 – Output VAT: Used to reflect output VAT, deducted input VAT, VAT of returned or discounted goods, VAT payable, paid, and payable of products, goods, and services consumed during the period.

+ Account 33312 – Import VAT: Used to reflect the amount of imported VAT payable, paid, and remaining to be paid to the State Budget.

– Account 3332 – Special consumption tax: Reflects the amount of special consumption tax payable, paid and remaining to be paid to the State Budget.

– Account 3333 – Export and import tax: Reflects the amount of export and import tax payable, paid and remaining to be paid to the State Budget.

– Account 3334 – Corporate income tax: Reflects the amount of corporate income tax payable, paid and outstanding, including additional corporate income tax expenses according to regulations on global minimum tax payable, paid and outstanding to the State budget.

– Account 3335 – Personal income tax: Reflects the amount of personal income tax payable, paid and remaining to be paid to the State Budget.

– Account 3336 – Resource tax: Reflects the amount of resource tax payable, paid and remaining to be paid to the State Budget.

– Account 3337 – Real estate tax , land rent: Reflects the amount of real estate tax, land rent payable, paid and remaining to be paid to the State Budget.

– Account 3338 – Environmental protection tax and other taxes: Reflects the amount payable, paid and remaining payable of environmental protection tax and other taxes, such as: Tax paid on behalf of foreign organizations and individuals doing business in Vietnam,…

Account 3338 has 2 sub-accounts:

+ Account 33381: Environmental protection tax: Reflects the amount of environmental protection tax payable, paid and remaining to be paid to the State Budget.

+ Account 33382: Other taxes: Reflects the amount payable, paid, and remaining to be paid of other taxes. Enterprises can proactively open detailed level 4 accounts for each type of tax in accordance with management requirements.

– Account 3339 – Fees, charges and other payables: Reflects the amounts payable, paid and remaining to be paid for fees, charges and other payables to the State other than those recorded in accounts 3331 to 3338. This account also reflects the amounts of State subsidies to enterprises (if any) such as subsidies and price subsidies.

3. Accounting methods for some major economic transactions

3.1. VAT payable (Account 3331)

3.1.1. Output VAT accounting (Account 33311)

1. a) Accounting for output VAT payable under the deduction method:

When issuing VAT invoices for selling products, goods, services, etc., businesses reflect revenue and income based on selling prices excluding VAT and separate VAT payable at the time of issuing invoices, recording:

Debit accounts 111, 112, 131 (total payment amount)

There are accounts 511, 515, 711 (prices do not include VAT)

Credit account 3331 – VAT payable (33311).

1. b) Accounting for output VAT payable using the direct method

Depending on tax law regulations, businesses can choose one of the two following accounting methods:

– Method 1: If the VAT payable is separated when issuing an invoice, follow the procedure in point a above.

– Method 2: Record revenue including VAT payable using the direct method. Periodically, when determining the amount of VAT payable, the enterprise reduces revenue and income accordingly:

Debit accounts 511, 515, 711

Credit account 3331 – VAT payable (33311).

1. c) When paying VAT to the State Budget, record:

Debit account 3331 – VAT payable

There are accounts 111 and 112.

3.1.2. Accounting for VAT of imported goods (Account 33312)

1. a) When importing materials, goods, and fixed assets, the enterprise reflects the amount of import tax payable, the total amount to be paid, and the value of imported materials, goods, and fixed assets (excluding import VAT), recording:

Debit accounts 152, 153, 156, 211,…

Credit account 333 – Taxes and amounts payable to the State (3333)

There are accounts 111, 112, 331,…

1. b) Reflecting the VAT payable on imported goods:

– In case the VAT payable on imported goods is deductible, record:

Debit account 133 – Deductible VAT

Credit account 3331 – VAT payable (33312).

– In case the VAT payable on imported goods is not deductible, it must be included in the value of imported materials, goods and fixed assets, and recorded as follows:

Debit accounts 152, 153, 156, 211,…

Credit account 3331 – VAT payable (33312).

1. c) When paying VAT on imported goods to the State Budget, record:

Debit account 3331 – VAT payable (33312)

There are accounts 111, 112,…

1. d) In case of import on consignment (applied at the consigning party)

– Upon receiving notification of the obligation to pay import VAT from the consignee, the consignor records the deductible amount of import VAT payable, recording:

Debit account 133 – Deductible VAT

Credit account 3331 – VAT payable (33312).

– Upon receiving the tax payment documents to the State budget from the entrusted party, the entrusting party reflects the reduction of the obligation to the State budget on VAT on imported goods, recording:

Debit account 3331 – VAT payable (33312)

There are accounts 111, 112 (if paying immediately to the trustee)

Credit account 338 – Other payables (if VAT on imported goods has not been paid immediately to the consignee)

Credit account 138 – Other receivables (record a decrease in the amount advanced to the consignee to pay VAT on imported goods).

– The consignee does not reflect the amount of import VAT payable like the consignor, but only records the amount of tax paid on behalf of the consignor, recording:

Debit account 138 – Other receivables (must collect back tax paid on behalf)

Debit account 338 – Other payables (deducted from the amount received from the entrusting party to pay on behalf)

There are accounts 111 and 112.

3.1.3. Accounting for deductible VAT

– Periodically, the enterprise calculates and determines the deductible VAT amount with the output VAT amount payable in the period, recording:

Debit account 3331 – VAT payable (33311)

There is account 133 – Deductible VAT.

– In case at the time of transaction it is not yet determined whether the input VAT of goods and services is deductible or not, the enterprise records the entire input VAT amount in Account 133 – Deductible VAT. Periodically, when determining the amount of VAT that is not deductible from output VAT, the enterprise reflects it in related expenses, recording:

Debit accounts 152, 156, 211, 627, 632, 641, 642,… (input VAT is not deductible)

There is account 133 – Deductible VAT.

3.1.4. Accounting for VAT payable is reduced

In case the enterprise is entitled to a reduction in the amount of VAT payable, the enterprise records the reduced amount of VAT in other income, recording:

Debit account 33311 – VAT payable (If deducted from tax payable)

Debit accounts 111, 112 (If tax reduction is received in cash)

Credit account 711 – Other income.

3.1.5. Input VAT accounting is refunded

In case an enterprise is refunded VAT according to the law because the input tax is greater than the output tax, when receiving the refund, record:

Debit accounts 111, 112

There is account 133 – Deductible VAT.

3.2. Special consumption tax (SCT) (Account 3332)

3.2.1. Accounting principles

– This account is used for the person who is obliged to pay special consumption tax according to the provisions of law. In import-export consignment transactions, this account is only used for the consignor, not for the consignee.

– When a business sells products, goods, or services subject to special consumption tax, the business records sales revenue and service provision excluding the special consumption tax payable. In case the special consumption tax payable cannot be separated immediately at the time of revenue recognition, the business is allowed to record revenue including special consumption tax and periodically reduce revenue for the special consumption tax payable. In all cases, when preparing the Business Performance Report, the “Sales and Service Provision Revenue” and “Revenue Deductions” indicators do not include the special consumption tax payable.

Accounting for special consumption tax on imported goods (for example, gasoline according to tax law) is guided in Account 1383 – Special consumption tax on imported goods.

– Enterprises importing or purchasing domestic goods and fixed assets subject to special consumption tax shall record the tax payable in the original value of inventory. In case an enterprise imports goods on behalf of another enterprise but does not have ownership of the goods, for example, temporary import – re-export transactions on behalf of a third party, the import tax payable shall not be recorded in the value of inventory but shall be recorded as other receivables.

– Accounting for refunded and reduced special consumption tax is carried out according to the following principles:

+ Special consumption tax paid when importing goods and services, if refunded, is recorded as a reduction in cost of goods sold (if goods are exported for sale) or a reduction in value of goods (if returned due to borrowing, lending,…);

+ Special consumption tax paid when importing fixed assets, if refunded, is recorded as a reduction in other expenses (if selling fixed assets) or a reduction in the original price of fixed assets (if returning);

+ Special consumption tax paid when importing goods and fixed assets but the unit does not have ownership, when refunded, is recorded as a reduction in other receivables;

+ Special consumption tax payable when selling goods or providing services but then refunded or reduced is recorded in other income.

3.2.2. Special consumption tax accounting method

1. a) Accounting for special consumption tax payable when selling goods and providing services:

– In case the special consumption tax payable can be separated immediately at the time the transaction occurs, the enterprise reflects the sales revenue and service provision excluding special consumption tax, recording:

Debit accounts 111, 112, 131

Credit account 511 – Sales revenue and service provision

Credit account 3332 – Special consumption tax.

– In case the special consumption tax payable is not immediately separated at the time of transaction, the enterprise reflects the sales revenue and service provision including special consumption tax. Periodically, when determining the amount of special consumption tax payable, the enterprise reduces the revenue, recording:

Debit account 511 – Sales revenue and service provision

Credit account 3332 – Special consumption tax.

1. b) When importing goods subject to special consumption tax (except for gasoline according to tax law), enterprises base on the amount of special consumption tax payable on imported goods, record:

Debit accounts 152, 156, 211,…

Credit account 3332 – Special consumption tax.

For temporarily imported – re-exported goods not owned by the unit, for example, transit goods re-exported right at the bonded warehouse, when paying special consumption tax on imported goods, record:

Debit account 138 – Other receivables (1388)

Credit account 3332 – Special consumption tax.

1. c) When paying special consumption tax to the State Budget, record:

Debit account 3332 – Special consumption tax

There are accounts 111 and 112.

3. d) Accounting for refund of special consumption tax paid at the import stage (except for the case specified in Clause 3.12 of Account 138 – Other receivables):

– Special consumption tax paid at the import stage, refunded when re-exporting goods, recorded:

Debit account 3332 – Special consumption tax

Credit account 632 – Cost of goods sold (if goods are shipped for sale)

There are accounts 152, 153, 156 (if returning goods).

– Special consumption tax paid at the import stage, refunded when re-exporting fixed assets, recorded:

Debit account 3332 – Special Consumption Tax

Credit account 211 – Tangible fixed assets (if returning fixed assets)

Credit account 811 – Other expenses (if selling fixed assets).

– Special consumption tax paid at the import stage but the goods are not owned by the unit, refunded upon re-export, recorded:

Debit account 3332 – Special consumption tax

Credit account 138 – Other receivables (1388).

1. d) Accounting for special consumption tax payable when selling goods, fixed assets, providing services but then reduced or refunded: When receiving notification from a competent authority about the amount of tax at the sales stage that is reduced or refunded, record:

Debit account 3332 – Special consumption tax

Credit account 711 – Other income.

1. e) In case of exporting products, goods and services subject to special consumption tax for internal consumption, giving, donating, promoting or advertising without collecting money, record:

Debit accounts 641, 642,…

There are accounts 154, 155,…

Credit account 3332 – Special consumption tax (if any).

1. g) In case of import on consignment (applied at the consigning party)

– Upon receiving notice of the obligation to pay special consumption tax from the trustee, the trustee records the amount of special consumption tax payable, recording:

Debit accounts 152, 156, 211,…

Credit account 3332 – Special consumption tax.

– Upon receiving the tax payment documents to the State budget from the trustee, the trustee reflects the reduction of the obligation to the State budget on special consumption tax, recording:

Debit account 3332 – Special consumption tax

There are accounts 111, 112 (if paying immediately to the trustee)

Credit account 338 – Other payables (if special consumption tax has not been paid immediately to the consignee)

Credit account 138 – Other receivables (record a decrease in the amount advanced to the trustee to pay special consumption tax).

– The consignee does not reflect the amount of special consumption tax payable like the consignor, but only records the amount of tax paid on behalf of the consignor, recording:

Debit account 138 – Other receivables (must collect the amount paid on behalf of others)

Debit account 338 – Other payables (deducted from the amount received from the entrusting party)

There are accounts 111 and 112.

3.3. Export tax (Account 3333)

3.3.1. Accounting principles

– This account is used for the person who is obliged to pay export tax according to the provisions of law. In export entrustment transactions, this account is only used for the entrusting party, not for the entrusting party.

– Export tax is an indirect tax, not included in the revenue structure of the enterprise. When exporting goods, the enterprise must separate the export tax payable from the sales revenue and service provision. In case the export tax payable cannot be separated immediately at the time of revenue recognition, the revenue shall be recorded including tax but the revenue must be periodically reduced for the export tax payable. In all cases, the “Sales revenue and service provision” and “Revenue deductions” indicators of the Business Performance Report do not include the export tax payable when exporting goods and services.

– Export tax payable upon export but later refunded or reduced is recorded in other income.

3.3.2. Export tax accounting method

1. a) Accounting for export tax payable when selling goods and providing services:

– In case the export tax payable can be separated immediately at the time the transaction occurs, the enterprise reflects the sales revenue and service provision excluding export tax, recording:

Debit accounts 111, 112, 131 (total payment amount)

Credit account 511 – Sales revenue and service provision

Credit account 3333 – Export and import tax (export tax details).

– In case the export tax payable cannot be separated immediately at the time of transaction, the enterprise shall reflect the sales revenue and service provision revenue including export tax. Periodically, when determining the export tax payable to reduce revenue, record:

Debit account 511 – Sales revenue and service provision

Credit account 3333 – Export and import tax (export tax details).

1. b) When paying export tax to the State budget, record:

Debit account 3333 – Export and import tax (export tax details)

There are accounts 111, 112,…

1. c) Export tax refunded or reduced (if any), record:

Debit accounts 111, 112, 3333

Credit account 711 – Other income.

1. d) In case of export entrustment (applied at the entrusting party)

– When selling goods and services subject to export tax, enterprises shall reflect sales revenue and service provision and the amount of export tax payable as in the case of normal export as prescribed in Point a of this Section.

– Upon receiving the tax payment documents to the State budget from the entrusted party, the entrusting party reflects the reduction of the obligation to the State budget on export tax, recording:

Debit account 3333 – Export and import tax (export tax details)

There are accounts 111, 112 (if paying immediately to the trustee)

Credit account 338 – Other payables (if export tax has not been paid immediately to the consignee)

Credit account 138 – Other receivables (record a decrease in the amount advanced to the trustee to pay export tax).

– The consignee does not reflect the export tax payable like the consignor, but only records the amount of tax paid on behalf of the consignor as other receivables or other payables, recorded:

Debit account 138 – Other receivables (must collect the amount paid on behalf of others)

Debit account 338 – Other payables (deducted from the amount received from the entrusting party)

There are accounts 111 and 112.

3.4. Import tax (Account 3333)

3.4.1. Accounting principles

– This account is used for businesses that are obliged to pay import tax according to the provisions of law. In import entrustment transactions, this account is only used for the entrusting party, not for the entrustee.

– Enterprises importing goods and fixed assets are required to record the import tax payable in the original price of purchased goods. In case an enterprise imports goods on behalf of another enterprise but does not have ownership of the goods, for example, temporary import – re-export transactions on behalf of a third party, the import tax payable is not recorded in the value of the goods but is recorded as other receivables.

– Accounting for import tax refunds and reductions is carried out according to the following principles:

+ Import tax paid when importing goods and services, if refunded, is recorded as a reduction in cost of goods sold (if goods are exported for sale) or a reduction in value of goods (if returned due to borrowing, lending, etc.);

+ Import tax paid when importing fixed assets, if refunded, is recorded as a reduction in other expenses (if selling fixed assets) or a reduction in the original price of fixed assets (if returning);

+ Import tax paid when importing goods and fixed assets but the unit does not have ownership (for example, temporarily imported – re-exported goods for processing, manufacturing, etc.) when refunded, it is recorded as a reduction in other receivables.

3.4.2. Import tax accounting method

1. a) When importing materials, goods, and fixed assets, enterprises reflect the amount of import tax payable in the value of imported materials, goods, and fixed assets (price including import tax), recording:

Debit accounts 152, 156, 211,… (price including import tax)

Credit account 3333 – Import and export tax (import tax details)

There are accounts 111, 112, 331,…

For temporarily imported – re-exported goods not owned by the unit, for example, transit goods re-exported right at the bonded warehouse, when paying import tax, record:

Debit account 138 – Other receivables

Credit account 3333 – Import and export tax (import tax details).

1. b) When paying import tax to the State Budget, record:

Debit account 3333 – Export and import tax (import tax details)

There are accounts 111, 112,…

1. c) Accounting for import tax refund paid at the import stage

– Import tax paid at the import stage, refunded when re-exporting goods, recorded:

Debit account 3333 – Export and import tax (import tax details)

Credit account 632 – Cost of goods sold (if goods are shipped for sale)

There are accounts 152, 153, 156 (if returning goods).

– Import tax paid at the import stage, refunded when re-exporting fixed assets, recorded:

Debit account 3333 – Export and import tax (import tax details)

Credit account 211 – Tangible fixed assets (if returning fixed assets)

Credit account 811 – Other expenses (if selling fixed assets).

– Import tax paid at the import stage but the goods are not owned by the unit, refunded upon re-export (for example, import tax paid when importing goods for processing), recorded:

Debit account 3333 – Export and import tax (import tax details)

Credit account 138 – Other receivables.

– When receiving money from the State budget, record:

Debit account 112 – Demand deposits

Credit account 3333 – Import and export tax (import tax details).

1. d) In case of import on consignment (applied at the consigning party)

– Upon receiving notice of import tax payment obligation from the consignee, the consignor records the amount of import tax payable, recording:

Debit accounts 152, 156, 211,… (price including import tax)

Credit account 3333 – Import and export tax (import tax details).

– Upon receiving the tax payment documents to the State budget from the entrusted party, the entrusting party reflects the reduction of the obligation to the State budget on import tax, recording:

Debit account 3333 – Export and import tax (import tax details)

There are accounts 111, 112 (if paying immediately to the trustee)

Credit account 338 – Other payables (if import tax has not been paid immediately to the consignee)

Credit account 138 – Other receivables (record a decrease in the amount advanced to the trustee to pay import tax).

– The consignee does not reflect the amount of import tax payable like the consignor, but only records the amount of tax paid on behalf of the consignor, recording:

Debit account 138 – Other receivables (must collect the amount paid on behalf of others)

Debit account 338 – Other payables (deducted from the amount received from the entrusting party)

There are accounts 111 and 112.

3.5. Corporate income tax (Account 3334)

3.5.1. Current method of accounting for corporate income tax expenses

– Every quarter, enterprises reflect the current corporate income tax temporarily payable to the State Budget (excluding additional corporate income tax payable according to the provisions of the global minimum tax law), recording:

Debit account 8211 – Current corporate income tax expense

Credit account 3334 – Corporate income tax.

When paying corporate income tax to the State Budget, record:

Debit account 3334 – Corporate income tax

There are accounts 111, 112,…

– At the end of the fiscal year, based on the actual corporate income tax payable according to the tax finalization declaration or the tax amount notified by the tax authority to be paid (excluding additional corporate income tax payable according to the provisions of the global minimum tax law):

+ If the actual corporate income tax payable in the year is greater than the provisional corporate income tax payable, the enterprise shall additionally reflect the current corporate income tax payable, recording:

Debit account 8211 – Current corporate income tax expense

Credit account 3334 – Corporate income tax.

+ If the actual corporate income tax payable in the year is less than the provisional corporate income tax payable, the enterprise shall reduce current corporate income tax expense, recording:

Debit account 3334 – Corporate income tax

Credit account 8211 – Current corporate income tax expense.

– In case of discovering immaterial errors of previous years related to corporate income tax payable of previous years, the enterprise is allowed to record an increase (or decrease) in the amount of corporate income tax payable of previous years in the current income tax expense of the year in which the error is discovered.

+ In case of recording an increase in current corporate income tax expense of the current year, record:

Debit account 8211 – Current corporate income tax expense

Credit account 3334 – Corporate income tax.

+ In case of being allowed to reduce current corporate income tax expense in the current year, record:

Debit account 3334 – Corporate income tax

Credit account 8211 – Current corporate income tax expense.

3.5.2. The method of accounting for additional corporate income tax expenses payable under the global minimum tax regulations is implemented according to the instructions in Clause 3.2 of Account 821 – Corporate income tax expenses.

3.6. Personal income tax (Account 3335)

1. a) When determining the amount of personal income tax payable to be deducted at source based on the employee’s taxable income, record:

Debit accounts 622, 627, 641, 642,… (income payable to employees excluding personal income tax)

Debit account 334 – Payable to employees (income payable to employees includes personal income tax)

Credit account 333 – Taxes and amounts payable to the State (3335).

1. b) When paying income to outside individuals, the enterprise must determine the amount of personal income tax payable on irregular taxable income for each time the income arises, recording:

+ In case of paying remuneration, outsourcing services,… directly to outside individuals, record:

Debit accounts 623, 627, 641, 642,… (total amount payable); or

Debit account 353 – Reward and welfare fund (total amount payable) (3531)

Credit account 333 – Taxes and amounts payable to the State (3335) (personal income tax deducted at source)

There are accounts 111, 112 (actual amount paid).

+ When paying debts payable to individuals outside of the income, record:

Debit account 331 – Payable to sellers (total amount payable)

Credit account 333 – Taxes and amounts payable to the State (personal income tax amount to be deducted)

There are accounts 111, 112 (actual amount paid).

1. c) When paying personal income tax to the State Budget on behalf of income earners, record:

Debit account 333 – Taxes and amounts payable to the State (3335)

There are accounts 111, 112,…

3.7. Resource tax (Account 3336)

1. a) Determine the amount of resource tax payable to be included in general production costs, record:

Debit account 627 – General production costs (6275)

Credit account 3336 – Resource tax.

1. b) When paying resource tax to the State Budget, record:

Debit account 3336 – Resource tax

There are accounts 111, 112,…

3.8. Real estate tax, land rent (Account 3337)

– For real estate tax and land rent payable: Enterprises base on the land use purpose to allocate and record real estate tax and land rent to the appropriate land use department, recording:

Debit accounts 627, 641, 642,…

Credit account 3337 – Real estate tax, land rent.

– When paying real estate tax and land rent to the State Budget, record:

Debit account 3337 – Real estate tax, land rent

There are accounts 111, 112,…

3.9. Environmental protection tax (Account 33381)

3.9.1. Accounting principles:

– This account is used for environmental protection taxpayers according to the provisions of law. In import entrustment transactions, this account is only used for the entrusting party, not for the entrustee.

– Enterprises selling products and goods subject to environmental protection tax shall record revenue excluding the environmental protection tax payable. In case the tax payable cannot be separated immediately at the time of occurrence, revenue shall be recorded including environmental protection tax but the revenue shall be periodically reduced for the environmental protection tax payable.

– Enterprises importing or purchasing domestic inventories subject to environmental protection tax shall record the amount of environmental protection tax payable in the original cost of inventories. For enterprises producing and processing products and services, environmental protection fees arising in the production and processing stages shall be accounted for in general production costs (Account 6275).

– The time for calculating environmental protection tax is implemented according to the provisions of tax law.

– Accounting for environmental protection tax refunds and reductions is carried out according to the following principles:

+ Environmental protection tax paid when importing goods and services, if refunded, is recorded as a reduction in cost of goods sold (if goods are exported for sale) or a reduction in value of goods (if returned due to borrowing, lending…);

+ Environmental protection tax paid when importing fixed assets, if refunded, is recorded as a reduction in other expenses (if selling fixed assets) or a reduction in the original price of fixed assets (if returning);

+ Environmental protection tax paid when importing goods and fixed assets but the unit does not have ownership, when refunded, it is recorded as a reduction in other receivables;

+ Environmental protection tax must be paid when selling goods and providing services but is later refunded or reduced, then recorded in other income.

3.9.2. Environmental protection tax accounting method

1. a) When selling goods and providing services subject to environmental protection tax and VAT, enterprises reflect sales revenue and service provision excluding environmental protection tax and VAT, recording:

Debit accounts 111, 112, 131 (total payment amount)

Credit account 511 – Sales revenue and service provision (selling price excluding environmental protection tax and VAT)

Credit account 3331 – VAT payable (33311)

Credit account 33381 – Environmental protection tax (if any).

In case the tax payable cannot be determined immediately at the time of transaction, the revenue is recorded including tax, but periodically when determining the tax payable, the revenue must be reduced, recorded as follows:

Debit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and payables (details of each type of tax).

1. b) When importing goods subject to environmental protection tax, enterprises shall base on the amount of environmental protection tax payable and record:

Debit accounts 152, 156, 211, 627,…

Credit account 33381 – Environmental protection tax (if any).

1. c) In case of exporting products, goods and services subject to environmental protection tax for exchange, internal consumption or donation, record:

Debit accounts 641, 642,…

There are accounts 152, 154, 155

Credit account 33381 – Environmental protection tax (if any).

1. d) In case of entrusted import:

– For the entrusting party:

+ Upon receiving notice of the obligation to pay environmental protection tax from the trustee, the trustee records the amount of environmental protection tax payable, recording:

Debit accounts 152, 156, 211,…

Credit account 33381 – Environmental protection tax.

+ Upon receiving the tax payment documents to the State Budget from the trustee, the trustee reflects the reduction of the obligation to the State Budget on environmental protection tax, recording:

Debit account 33381 – Environmental protection tax

There are accounts 111, 112 (if paying immediately to the trustee)

Credit account 338 – Other payables (if environmental protection tax has not been paid immediately to the consignee)

Credit account 138 – Other receivables (record a decrease in the amount advanced to the trustee to pay environmental protection tax).

– For the consignee: do not reflect the amount of environmental protection tax payable as the consignor, but only record the amount of tax paid on behalf of the consignor as other receivables and payables, record:

Debit account 138 – Other receivables (must collect the amount paid on behalf of others)

Debit account 338 – Other payables (deducted from the amount received from the entrusting party)

There are accounts 111 and 112.

1. d) Accounting for refund of environmental protection tax paid at the import stage:

– Environmental protection tax paid at the import stage, refunded when re-exporting goods, recorded:

Debit account 33381 – Environmental protection tax

Credit account 632 – Cost of goods sold (if goods are shipped for sale)

There are accounts 152, 153, 156 (if returning goods).

– Environmental protection tax paid at the import stage, refunded when re-exporting fixed assets, recorded:

Debit account 33381 – Environmental protection tax

Credit account 211 – Tangible fixed assets (if returning fixed assets)

Credit account 811 – Other expenses (if selling fixed assets).

– Environmental protection tax paid at the import stage but the goods are not owned by the unit, refunded upon re-export, recorded:

Debit account 33381 – Environmental protection tax

Credit account 138 – Other receivables.

1. e) Accounting for environmental protection tax payable when selling goods (except petroleum products), fixed assets, providing services but then reduced or refunded: When receiving notification from a competent authority about the amount of tax at the sales stage that is reduced or refunded, record:

Debit account 33381 – Environmental protection tax

Credit account 711 – Other income.

3.10. Other taxes (Account 33382)

1. a) When determining the amount of tax payable, record:

Related account debt

Credit account 33382 – Other taxes

1. b) When paying other taxes, record:

Debit account 33382 – Other taxes

There are accounts 111 and 112.

3.11. Fees, charges and other payables (Account 3339)

3.11.1. Contractor tax in cases where enterprises must pay taxes on behalf of foreign contractors and foreign subcontractors according to the provisions of tax laws

1. a) In case the contract price includes contractor tax (corporate income tax and VAT), record:

– When receiving goods and services, reflect in the asset value or related production and business costs according to the contract value, record:

Debit accounts 627, 642,… (contract value does not include foreign contractor VAT if subject to VAT deduction)

Debit account 1388 – Other receivables (VAT of foreign contractors if eligible for VAT deduction)

Credit account 331 – Payable to sellers (contract value includes corporate income tax and VAT payable by the contractor).

– When making an advance payment or paying a contractor, record:

Debit account 331 – Payable to sellers

Credit account 333 – Taxes and amounts payable to the State (3339) (VAT and CIT payable on behalf of the contractor)

There are accounts 111, 112 (contract value after deducting VAT and CIT payable on behalf of the contractor).

– When a business pays contractor tax, record:

Debit account 333 – Taxes and amounts payable to the State (3339)

There are accounts 111, 112

Also, note:

Debit account 133 – Deductible VAT (if VAT paid by foreign contractors to the State budget is deductible)

Credit account 1388 – Other receivables (VAT of foreign contractors).

– In case there is a difference in the time of recognition between accounting expenses and deductible expenses when calculating corporate income tax for contractor tax, it shall be implemented according to the guidance in Vietnamese Accounting Standard No. 17 – Corporate Income Tax.

1. b) In case the price payable to the seller in the contract does not include contractor tax (both corporate income tax and VAT):

– When receiving goods and services, reflect in the asset value or related production and business costs according to the contract value, record:

Debit accounts 627, 642,… (contract value does not include foreign contractor VAT if VAT deduction is allowed and includes contractor corporate income tax)

Credit account 331 – Payable to seller (contract value does not include contractor tax)

Credit account 338 – Other payables (3388) (corporate income tax payable on behalf of contractors).

– Reflecting VAT on imported goods according to tax law regulations, record:

Debit account 133 – Deductible VAT (if deductible)

Debit accounts 627, 642,… (if not deductible)

Credit account 33312 – VAT on imported goods.

– When making an advance payment or paying a contractor, record:

Debit account 331 – Payable to sellers

There are accounts 111, 112 (contract value does not include contractor tax).

Also, note:

Debit account 3388 – Other payables (Corporate income tax payable on behalf of contractors)

Debit account 1388 – Other receivables (VAT of foreign contractors)

Credit account 333 – Taxes and amounts payable to the State (3339) (VAT and CIT payable on behalf of the contractor).

– When a business pays contractor tax, record:

Debit account 333 – Taxes and amounts payable to the State (3339)

There are accounts 111 and 112.

Also, note:

Debit account 133 – Deductible VAT (if VAT paid by foreign contractors to the State budget is deductible)

Debit accounts 627, 642,… (if not deductible)

Credit account 1388 – Other receivables (VAT of foreign contractors).

1. c) In case the price payable to the seller on the contract (including VAT of the contractor, excluding CIT of the contractor), the enterprise is only responsible for paying CIT on behalf of the contractor.

– When receiving goods and services, reflect in the asset value or related production and business costs according to the contract value, record:

Debit accounts 627, 642,.. (contract value does not include contractor’s VAT and includes contractor’s corporate income tax)

Credit account 331 – Payable to sellers (including VAT of contractor, excluding corporate income tax paid on behalf of contractor)

Credit account 3388 – Other payables (corporate income tax payable on behalf of contractors).

– When making an advance payment or paying a contractor, record:

Debit account 331 – Payable to sellers (contract value includes VAT of contractor, excluding corporate income tax paid on behalf of contractor)

There are accounts 111, 112 (contract value includes VAT of contractor, excluding corporate income tax paid on behalf of contractor)

Also, note:

Debit account 3388 – Other payables (Corporate income tax payable on behalf of contractors)

Debit account 1388 – Other receivables (VAT of foreign contractors)

Credit account 333 – Taxes and amounts payable to the State (3339) (VAT and CIT payable on behalf of the contractor)

– When the contractor incurs tax liability, record:

Debit account 333 – Taxes and amounts payable to the State (3339)

There are accounts 111 and 112.

Also, note:

Debit account 133 – Deductible VAT (if VAT paid by foreign contractors to the State budget is deductible)

Debit accounts 627, 642,… (if not deductible)

Credit account 1388 – Other receivables (VAT of foreign contractors).

3.11.2. Fees, charges and other payable amounts

1. a) When determining the registration fee calculated on the value of the purchased property (when registering ownership or usage rights), record:

Debit account 211 – Tangible fixed assets

Credit account 333 – Taxes and amounts payable to the State (3339).

1. b) Determine the amount of environmental protection fees payable at the production and processing stages of products and services according to the provisions of law, record:

Debit account 627 – General production costs (6275)

Credit account 333 – Taxes and amounts payable to the State (3339).

1. c) When paying fees, charges and other payable amounts, record:

Debit account 333 – Taxes and amounts payable to the State (3339)

There are accounts 111 and 112.

3.12. Accounting for State subsidies and subsidies for enterprises:

– Upon receiving a decision on subsidies and price supports from the State in the case where an enterprise performs the tasks of providing goods and services as required by the State, the enterprise reflects the revenue from subsidies and price supports granted by the State, recording:

Debit account 333 – Taxes and amounts payable to the State (3339)

Credit account 511 – Sales revenue and service provision.

– When receiving subsidies and subsidies from the State, record:

Debit accounts 111, 112

Credit account 333 – Taxes and amounts payable to the State (3339).

 

ACCOUNT 334 – PAYABLE TO EMPLOYEES

1. Accounting principles

This account is used to reflect the payables and payment status of payables to employees of the enterprise regarding salaries, wages, bonuses, social insurance paid according to salary and other payables related to employees’ income.

2. Structure and content of Account 334 – Payable to employees

Debit:

– Salaries, wages, bonuses of a salary nature, social insurance paid based on salary and other amounts paid, disbursed, or advanced to employees;

– Deductions from employees’ salaries and wages.

Creditor:

Salaries, wages, bonuses of a salary nature, social insurance and other amounts payable to employees.

Credit Balance:

Salaries, wages, bonuses of a salary nature and other amounts payable to employees at the end of the accounting period.

Account 334 may have a debit balance. The debit balance of Account 334 (if any) reflects the amount paid greater than the amount payable for salaries, wages, bonuses and other amounts to employees.

3. Accounting methods for some major economic transactions
4. a) Calculate salary and allowances as prescribed to be paid to employees, record:

Debit accounts 622, 623, 627, 641, 642, 241,…

Credit account 334 – Payable to employees.

1. b) Bonuses payable to employees:

Debit accounts 622, 623, 627, 641, 642, 241,… (if the enterprise does not have a bonus fund and the bonus is included in production and business costs)

Debit account 353 – Reward and welfare fund (3531) (if deducted from the reward fund)

Credit account 334 – Payable to employees.

– When paying bonuses, record:

Debit account 334 – Payable to employees

There are accounts 111, 112,…

1. c) Calculate social insurance premiums (sickness, maternity, accident,…) payable to employees, record:

Debit account 338 – Other payables (3383)

Credit account 334 – Payable to employees.

1. d) Calculate the actual leave salary payable to employees, record:

Debit accounts 622, 623, 627, 641, 642, 241,… (if the enterprise does not deduct leave salary in advance)

Debit account 335 – Payable expenses (if the business deducts leave salary in advance)

Credit account 334 – Payable to employees.

1. d) Amounts that must be deducted from the salary and income of the enterprise’s employees such as unspent advances, health insurance, social insurance, unemployment insurance, compensation for missing assets according to the handling decision,… record:

Debit account 334 – Payable to employees

There are accounts 138, 141, 338,…

1. e) Calculate the personal income tax that the enterprise’s employees must pay to the State, record:

Debit account 334 – Payable to employees

Credit account 333 – Taxes and amounts payable to the State (3335).

1. g) When advancing or actually paying salaries and wages to employees of the enterprise, record:

Debit account 334 – Payable to employees

There are accounts 111, 112,…

1. h) Payment of payables to employees of the enterprise, record:

Debit account 334 – Payable to employees

There are accounts 111, 112,…

1. i) In case of paying salaries or bonuses to employees of an enterprise in products or goods, the enterprise reflects sales revenue excluding VAT, recording:

Debit account 334 – Payable to employees

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (33311).

1. k) Determine and pay other amounts payable to the enterprise’s employees such as meal allowances, housing allowances, phone bills, tuition fees, membership cards, etc.:

– When determining the amount payable to the enterprise’s employees, record:

Debit accounts 622, 623, 627, 641, 642

Credit account 334 – Payable to employees.

– When paying employees of the enterprise, record:

Debit account 334 – Payable to employees

There are accounts 111, 112,…

 

ACCOUNT 335 – EXPENSES PAYABLE

1. Accounting principles
2. a) This account is used to reflect payables for goods and services received from sellers or provided to buyers during the reporting period but not actually paid due to insufficient vouchers, records, and accounting documents, recorded in production and business expenses of the reporting period.

This account also reflects the amounts payable to employees during the period such as vacation pay and production and business expenses of the reporting period that must be accrued in advance, such as:

– The costs during the period when the enterprise stops production seasonally can be planned for. The enterprise will calculate in advance and account for the costs of production and business in the period that will have to be incurred during the period of stopping production and business;

– Pre-deduct interest expenses payable on loans in case of deferred interest payments, deferred bond interest payments (when the bond matures).

1. b) Enterprises must distinguish between payable expenses (also known as prepaid expenses or accrued expenses) and payable provisions reflected in Account 352 – Provisions. payables to be recorded in the accounting books and presented in the Financial Statements in accordance with the nature of each item, specifically:

– Payable provisions are current liabilities but often have no specific payment time; Payable expenses are current liabilities with certain payment time;

– Estimated payable provisions but the amount to be paid may not be determined with certainty (for example, provision for product, goods, construction warranty, provision for business restructuring, etc.); Payable expenses with certain determination of the amount to be paid;

– On the Statement of Financial Position, provisions are presented separately from trade and other payables while accrued expenses are part of trade and other payables.

1. c) Prepaid expenses are not reflected in Account 335 – Payable expenses but are reflected as payable provisions, such as:

– Provision for product, goods, construction works warranty, provision for business restructuring;

– Other payable provisions (specified in Account 352 – Payable provisions).

1. d) The advance deduction into production and business expenses in the period must be calculated strictly (estimated costs and approved by competent authorities) and there must be reasonable and reliable evidence of the expenses that must be advanced in the period, to ensure that the amount of expenses payable recorded in this account is consistent with the actual expenses incurred. It is strictly forbidden to advance deduction into expenses of contents that are not included in production and business expenses.
2. d) About In principle, payable expenses must be settled with the actual expenses incurred. The difference between the provision and actual expenses is adjusted to increase/decrease the expenses of the relevant departments.
3. e) Capitalization of borrowing costs must comply with Vietnamese Accounting Standard No. 16 – Borrowing costs. Contractors do not capitalize interest when borrowing to serve the construction and building of works and assets for customers, including cases of separate loans, for example: Construction contractors borrow money to construct works for customers, shipbuilding companies under contracts for ship owners,…
4. g) Unused pre-accrued expenses at the end of the year must be explained in the notes to the Financial Statements.
5. Structure and content of Account 335 – Payable expenses

Debit:

– Carry forward actual expenses incurred that have been included in payable expenses;

– The difference in payable costs is greater than the actual costs recorded as a cost reduction.

Creditor:

Expenses that are expected to be paid in advance and recorded in production and business expenses.

Credit Balance:

Accrued expenses have been included in production and business costs but have not actually occurred at the end of the accounting period.

3. Accounting methods for some major economic transactions
4. a) Deduct in advance the cost of leave salary of production workers, record:

Debit account 622 – Direct labor costs

Credit account 335 – Payable expenses.

1. b) When calculating the actual leave salary payable to production workers, if the amount advanced is greater than the actual amount payable, record:

Debit account 335 – Payable expenses (pre-deducted amount)

Credit account 622 – Direct labor costs.

1. c) Pre-deduct from production and business expenses the estimated expenses to be incurred during seasonal or planned work stoppages, record:

Debit accounts 623, 627

Credit account 335 – Payable expenses.

1. d) Actual costs incurred related to pre-accrued expenses, record:

Debit accounts 623, 627 (if the actual cost incurred is greater than the amount provisioned in advance)

Debit account 335 – Payable expenses (pre-deducted amount)

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 152, 153, 331, 334,…

There are accounts 623, 627 (if the actual cost incurred is less than the amount deducted in advance).

1. d) In case of interest paid in arrears, at the end of the period, calculate the interest payable during the period, record:

Debit account 635 – Financial expenses (interest on loans for production and business)

Debit accounts 627, 241 (capitalized interest)

Credit account 335 – Payable expenses.

 

ACCOUNT 336 – INTERNAL PAYABLES

1. Accounting principles
2. a) This account is used to reflect the payment status of payables between the enterprise and its affiliated units and between the enterprise’s affiliated units with each other.
3. b) Do not reflect in Account 336 – Internal payables payment transactions between the parent company and subsidiaries and between subsidiaries.
4. c) Internal payables reflected in Account 336 – Internal payables include payables for business capital and amounts that affiliated units must pay to the enterprise, and other affiliated units; amounts that the enterprise must provide to affiliated units. Payables can be related to receiving assets, capital, current payments, payments on behalf of others, loan interest, exchange rate differences, etc.;
5. d) Depending on the management decentralization and operational characteristics, the enterprise decides that the affiliated unit records the business capital provided by the enterprise into Account 3361 – Internal payables for business capital or Account 411 – Owner’s investment capital.
6. d) Account 336 – Internal payables is accounted for in detail for each unit having payment relationship, in which each payable and payable item is monitored.
7. e) At the end of the period, the enterprise shall check and compare Account 136 – Internal receivables, Account 336 – Internal payables between units according to each internal payment content to prepare a clearing payment record for each working unit. The basis for offsetting is on these two accounts. When comparing, if there is a difference, the cause must be found and adjusted promptly.
8. Structure and content of Account 336 – Internal payables

Debit:

– Amount paid to affiliated units;

– Amount of money paid by the affiliated unit to the enterprise;

– Amount paid for items that affiliated units have paid on behalf of or collected on behalf of affiliated units;

– Offset receivables with payables of the same affiliated unit with payment relationship.

Creditor:

– Business capital of affiliated units provided by the enterprise;

– Amount of money that the affiliated unit must pay to the enterprise;

– Amount the enterprise must pay to its affiliated units;

– Amounts payable to other internal affiliated units for amounts paid by other affiliated units and amounts collected on behalf of other affiliated units.

Credit Balance:

Amounts payable to the enterprise and its internal affiliated units at the end of the accounting period.

Account 336 – Internal payables, has 4 sub-accounts:

– Account 3361 – Internal payables for business capital: This account is only opened at subordinate units to reflect the business capital assigned by the superior enterprise.

This account does not reflect the capital of subsidiaries or units that are essentially subsidiaries receiving contributions from the parent company.

– Account 3362 – Internal payables for exchange rate differences : This account is only opened at the Project Management Board under the Investor enterprise, used to reflect the exchange rate difference arising and payable to the enterprise.

– Account 3363 – Internal payables for eligible capitalized borrowing costs : This account is only opened at the Project Management Board under the Investor enterprise, used to reflect the capitalized borrowing costs incurred and must be transferred to the enterprise.

– Account 3368 – Other internal payables: Reflects all other payables between affiliated units within the same enterprise.

3. Accounting methods for some major economic transactions

3.7. At affiliated units

1. a) When a affiliated unit such as a branch, store, project management board, etc. receives capital provided by the enterprise, record:

Debit accounts 111, 112, 152, 155, 156, 211, 213, 217,…

Credit account 336 – Internal payables (3361).

1. b) Amounts payable to other internal units for amounts paid on behalf of others, or when receiving products, goods, and services transferred from internal units, record:

Debit accounts 152, 153, 156,… (if receiving goods and services transferred from internal units)

Debit accounts 331, 641, 642,… (amounts paid by internal units)

Debit account 133 – Deductible VAT (if any)

Credit account 336 – Internal payables.

1. c) When collecting money on behalf of or borrowing from other internal units, record:

Debit accounts 111,112,…

Credit account 336 – Internal payables.

1. d) When paying to the enterprise and internal units for payables, receivables, payments, and collections, record:

Debit account 336 – Internal payables

There are accounts 111,112,…

1. d) When there is a decision to transfer assets to other internal units and a decision to reduce operating capital, record:

Debit account 336 – Internal payables (3361)

Debit account 214 – Depreciation of fixed assets (if transferring fixed assets, investment real estate)

There are accounts 152, 155, 156, 211, 213, 217,…

1. e) Offsetting between receivables and payables arising from transactions with internal units, record:

Debit account 336 – Internal payables

Credit account 136 – Internal receivables.

1. g) In case the affiliated unit is not assigned to account for undistributed after-tax profits but only periodically transfers revenues, incomes and expenses through Account 336 – Internal payables or through Account 911 – Determining business results, record:

– Transfer revenue and income, record:

Debit accounts 511, 711

Credit account 911 – Determine business results (if the affiliated unit monitors business results during the period)

Credit account 336 – Internal payables (if the affiliated unit does not monitor business results).

– Transfer expenses, record:

Debit account 336 – Internal payables (if the affiliated unit is not assigned to monitor business results)

Debit account 911 – Determine business results (if the affiliated unit is assigned to monitor its own business results)

There are accounts 632, 635, 641, 642.

– Periodically, the subordinate units are assigned to monitor business results during the period and transfer business results to the enterprise.

+ In case of profit, record:

Debit account 911 – Determining business results

Credit account 336 – Internal payables.

+ In case of loss, record:

Debit account 336 – Internal payables

Credit account 911 – Determine business results.

1. h) In case a subordinate unit is assigned to account for undistributed profit after tax, the subordinate unit periodically transfers undistributed profit after tax to the superior unit, recording:

– Transferring interest, record:

Debit account 421 – Undistributed profit after tax

Credit account 336 – Internal payables.

– Carry forward losses, record:

Debit account 336 – Internal payables

Credit account 421 – Undistributed profit after tax.

3.2. Accounting at the enterprise

1. a) The number of reward funds and welfare funds to be allocated to affiliated units (if any), record:

Debit account 353 – Reward and welfare fund

Credit account 336 – Internal payables.

1. b) Payables to affiliated units, record:

Debit accounts 152, 153, 211, 331, 623, 627, 641, 642,…

Credit account 336 – Internal payables.

1. c) When paying payables to affiliated units, record:

Debit account 336 – Internal payables

There are accounts 111, 112,…

1. d) Offset internal receivables and payables of the same affiliated unit, record:

Debit account 336 – Internal payables

Credit account 136 – Internal receivables.

 

ACCOUNT 337 – PAYMENT ACCORDING TO CONSTRUCTION CONTRACT PROGRESS

1. Accounting principles
2. a) This account is used to reflect the amount customers must pay according to the planned progress and the amount receivable according to the revenue corresponding to the completed work portion determined by the contractor of the unfinished construction contract.
3. b) This account only applies to cases where the construction contract stipulates that the contractor is paid according to the planned progress, not to cases where the construction contract stipulates that the contractor is paid according to the value of the completed volume confirmed by the customer.
4. c) The basis for recording in the Debit side of Account 337 is the document determining revenue corresponding to the completed work in the period (not an invoice) prepared by the contractor himself, without having to wait for customer confirmation. The contractor must choose a method to determine the completed work and assign responsibility to relevant departments to determine the value of the completed work and prepare documents reflecting the construction contract revenue in the period.

The basis for recording in the credit side of Account 337 is the invoice prepared based on the payment schedule as specified in the contract. The amount recorded on the invoice is the basis for recording the amount the contractor must collect from the customer, not the basis for recording revenue in the accounting period.

1. d) Account 337 must be monitored in detail for each construction contract.
2. Structure and content of Account 337 – Payment according to construction contract progress

Debit:

Reflects the amount receivable based on recorded revenue corresponding to the completed portion of the unfinished construction contract.

Creditor:

Reflects the amount customers must pay according to the planned progress of an unfinished construction contract.

Debit Balance:

Reflects the difference between the recorded revenue of the contract being greater than the amount the customer must pay according to the planned progress of the unfinished construction contract.

Credit Balance:

Reflects the difference between the recorded revenue of the contract being less than the amount the customer must pay according to the planned progress of the unfinished construction contract.

3. Accounting methods for some major economic transactions
4. a) In case the construction contract stipulates that the contractor is paid according to progress, when the results of the construction contract performance are reliably estimated, the accountant shall base on the documents reflecting the revenue corresponding to the completed work (not invoices) determined by the contractor himself, record:

Debit account 337 – Payment according to construction contract progress

Credit account 511 – Sales revenue and service provision.

1. b) Based on the invoice prepared according to the progress to reflect the amount receivable according to the progress recorded in the contract, record:

Debit account 131 – Accounts receivable from customers

Credit account 337 – Payment according to construction contract progress

Credit account 3331 – VAT payable.

1. c) When the contractor receives payment from the customer, record:

Debit accounts 111, 112

Credit account 131 – Accounts receivable from customers.

 

ACCOUNT 338 – OTHER PAYABLES

1. Accounting principles
2. a) This account is used to reflect the payment status of payables and receivables other than those reflected in other accounts in group 33 (from account 331 to account 337). This account is also used to record revenue received in advance for services provided to customers; price differences arising in the sale and leaseback transactions of assets that are finance leases or operating leases.
3. b) The content and scope of reflection of this account include:

– The value of surplus assets has not been clearly determined, awaiting the decision of the competent authority; The value of surplus assets must be paid to individuals and groups (inside and outside the unit) according to the decision of the competent authority recorded in the handling minutes, if the cause has been determined;

– Amount of deduction and payment of social insurance, health insurance, unemployment insurance and union fees;

– Deductions from employees’ salaries according to court decisions;

– Borrowed materials and goods are temporary;

– Capital contributions received under business cooperation contracts (BCC) do not form new legal entities;

– Amounts collected on behalf of third parties must be returned, amounts received by the trustee from the principal to pay import and export taxes, import VAT and to make payments on behalf of the principal;

– Amounts collected in advance from customers in many accounting periods for leasing assets and infrastructure; Unrealized revenue and income;

– The difference between the selling price and the remaining value of the sold and leased back fixed assets is a financial lease; The difference between the selling price and the fair value of the sold and leased back fixed assets is an operating lease;

– Sponsored, donated, or given assets come with conditions;

– Other payables, such as payments to purchase voluntary pension insurance, life insurance and other support (other than salary) for employees,…

2. Structure and content of Account 338 – Other payables

Debit:

– Transfer the value of surplus assets to relevant accounts according to the decision recorded in the handling minutes;

– Union fees spent at the unit;

– Social insurance, health insurance, unemployment insurance, and union fund numbers submitted to the management agency of social insurance, health insurance, unemployment insurance, and union funds;

– Revenue awaiting allocation is calculated for each accounting period; advance payments are returned to customers when the asset leasing is no longer carried out;

– Carrying over the difference between the selling price and the remaining value of the fixed assets sold and leased back as financial leases to reduce production and business expenses;

– Carrying over the difference between the selling price and the fair value of the fixed assets sold and leased back as operating leases to reduce production and business expenses;

– Other paid and payable amounts.

Creditor:

– Value of surplus assets awaiting disposal (cause not yet determined); Value of surplus assets to be paid to individuals and groups (inside and outside the unit) according to the decision recorded in the disposal record due to the cause being immediately determined;

– Deduct social insurance, health insurance, unemployment insurance, and union fees from production and business expenses or from employees’ salaries;

– Payments to employees for housing, electricity and water;

– Excess union funds are compensated;

– Social insurance number paid to employees when paid by the Social Insurance agency;

– Revenue awaiting allocation arising during the period;

– The difference between the selling price and the remaining value of the sold and leased back fixed assets of the sale and leaseback transaction is a financial lease;

– The difference between the selling price and the fair value of the sold and leased back fixed assets of the sale and leaseback transaction is an operating lease;

– Materials, goods borrowed or temporarily borrowed, capital contributions received under business cooperation contracts that do not establish a legal entity (except in cases where the nature of the contract is to borrow or lease assets);

– Amounts collected on behalf of other units must be returned;

– Other payables.

Credit Balance:

– Social insurance, health insurance, unemployment insurance, and trade union fees have been deducted but not yet paid to the management agency or the trade union funds are left for the unit but not yet fully spent;

– Value of discovered surplus assets awaiting resolution;

– Revenue awaiting allocation at the end of the accounting period;

– The difference between the selling price and the fair value or the remaining value of the sold and leased back fixed assets that have not been transferred;

– Other payables and receivables.

account may have a debit balance: The debit balance reflects the amount paid or submitted in excess of the amount payable or payable, or the amount of social insurance paid to employees that has not been paid, and the excess union funds that have not been compensated.

Account 338 – Other payables, has 7 sub-accounts:

– Account 3381 – Surplus assets awaiting resolution: Reflects the value of surplus assets for which the cause has not been clearly determined and is awaiting a decision from the competent authority. In case the value of surplus assets has been determined for a reason and there is a resolution record, it will be recorded immediately in the relevant accounts and not recorded through account 338 (3381).

– Account 3382 – Trade union funds: Reflects the status of trade union fund deduction and payment at the unit.

– Account 3383 – Social insurance: Reflects the status of social insurance deduction and payment at the unit.

– Account 3384 – Health insurance: Reflects the status of health insurance deduction and payment at the unit.

– Account 3386 – Unemployment insurance : Reflects the situation of unemployment insurance deduction and payment at the unit.

– Account 3387 – Revenue awaiting allocation: Reflects the current amount and the increase or decrease in revenue awaiting allocation of the enterprise during the accounting period. Revenue awaiting allocation includes pre-received revenue such as: Amounts of money customers have paid in advance for one or more accounting periods for asset leasing; Other revenue awaiting allocation such as: Revenue corresponding to the value of goods, services or the amount of discounts for customers in traditional customer programs,…

Do not record the following items in this account:

+ Money received in advance from buyers for which the business has not yet provided products, goods, or services;

+ Uncollected revenue from asset leasing and multi-period service provision (pre-received revenue is only recorded when the money is actually collected, and cannot be recorded in correspondence between account 3387 and account 131).

– Account 3388 – Other payables: Reflects other payables of the unit in addition to the payables reflected in other accounts from account 3381 to account 3387.

3. Accounting methods for some major economic transactions

3.1. In case of discovery of surplus assets

1. a) For excess inventory or fixed assets discovered during inventory and the cause is determined, the accounting entries shall be made based on the cause of excess (due to mistakes, weighing, measuring, counting, forgetting to record, etc.). If the excess fixed assets during inventory are immediately determined to belong to other enterprises, the enterprise that owns the assets must be notified immediately. If the enterprise that owns the assets cannot be identified, the superior agency and the financial agency at the same level (if it is a state-owned enterprise) must be notified immediately for handling. In this case, the enterprise shall not record an increase in fixed assets and shall not record it in the credit side of account 338, but shall open a detailed fixed asset tracking book and present it in the Notes to the Financial Statements.
2. b) If the cause is not clearly determined and must be pending processing, reflect the value of inventory and excess fixed assets for which the cause is not yet determined, record:

Debit accounts 111, 152, 153, 156, 211

Credit account 338 – Other payables (3381).

– When there is a decision from a competent authority on handling excess inventory and fixed assets, record:

Debit account 338 – Other payables (3381)

There are related accounts.

3.2. Accounting for social insurance, health insurance, unemployment insurance, and union funds

– When deducting social insurance, health insurance, unemployment insurance, and trade union fees, record:

Debit accounts 622, 623, 627, 641, 642,… (amounts included in production and business expenses)

Debit account 334 – Payable to employees (amount deducted from employee’s salary)

Credit account 338 – Other payables (3382, 3383, 3384, 3386).

– When paying social insurance, health insurance, unemployment insurance, and union fees, record:

Debit account 338 – Other payables (3382, 3383, 3384, 3386)

There are accounts 111, 112,…

– Social insurance must be paid to employees when they are on sick leave, maternity leave, etc., record:

Debit account 338 – Other payables (3383)

Credit account 334 – Payable to employees.

– Union fund expenditure at the unit, record:

Debit account 338 – Other payables (3382)

There are accounts 111, 112,…

– The excess union budget is compensated. When receiving the money, record:

Debit accounts 111, 112

Credit account 338 – Other payables (3382).

3.3. When borrowing materials, goods or other non-monetary assets, record:

Debit accounts 152, 153, 156…

Credit account 338 – Other payables.

3.4. Accounting for revenue awaiting allocation from leasing fixed assets and investment real estate under the operating lease method, revenue of the accounting period is determined by the total amount of collected operating lease of fixed assets and investment real estate divided by the number of periods of pre-collection of operating lease of fixed assets and investment real estate:

– When receiving prepayments from customers for leasing fixed assets and investment real estate for many periods, the enterprise reflects prepaid revenue at prices excluding VAT, recording:

Debit accounts 111, 112,… (total amount received in advance)

Credit account 3387 – Revenue awaiting allocation

Credit account 3331 – VAT payable (33311) (if any).

– When calculating and recording revenue of each accounting period, record:

Debit account 3387 – Revenue awaiting allocation

Credit account 511 – Sales revenue and service provision.

– In case the asset lease contract is not performed, the money must be returned to the customer, record:

Debit account 3387 – Revenue awaiting allocation

Debit account 3331 – VAT payable (amount returned to the lessee for VAT of unrealized fixed asset leasing activities) (if any)

There are accounts 111, 112,… (returned amount).

3.5. In case of sale and leaseback of fixed assets under financial lease with selling price greater than remaining value of the fixed assets sold and leaseback:

– When completing the asset sale procedure, based on the invoice and related documents, record:

Debit accounts 111, 112,… (total payment amount)

Credit account 711 – Other income (remaining value of fixed assets sold and leased back)

Credit account 3387 – Revenue awaiting allocation (difference between selling price greater than remaining value of fixed assets)

Credit account 3331 – VAT payable.

At the same time, reduce fixed assets:

Debit account 811 – Other expenses (remaining value of fixed assets sold and leased back)

Debit account 214 – Depreciation of fixed assets (depreciation value) (if any)

Credit account 211 – Tangible fixed assets (original price of fixed assets).

– Periodically, transfer the larger difference (profit) between the selling price and the remaining value of the sold and leased back fixed assets to reduce production and business expenses in the period in accordance with the asset lease term, record:

Debit account 3387 – Revenue awaiting allocation

There are accounts 623, 627, 641, 642,…

3.6. Accounting for import-export consignment transactions

3.6.1. At the import consignee

1. a) When receiving money from the import entrusting enterprise to purchase imported goods, based on related documents, record:

Debit accounts 111, 112,…

Credit account 338 – Other payables (3388).

1. b) When transferring money to deposit to open LC (if paying by letter of credit), based on related documents, record:

Debit account 244 – Deposit, bet

There are accounts 111 and 112.

1. c) When importing materials, equipment, and goods for the consignor, the enterprise monitors the imported consignment goods on its management system and explains in the Financial Report the quantity, type, specifications, quality of the imported consignment goods, import period, payment subject…, and does not record the value of the imported consignment goods on the Financial Situation Report.
2. d) Accounting for import entrustment payment transactions:

– When transferring the deposit to open an L/C to pay the overseas seller as part of the payment for imported goods on consignment, record:

Debit accounts 138, 338

Credit account 244 – Deposit, bet.

– When paying the foreign seller for the amount payable for imported goods on consignment, record:

Debit account 138 – Other receivables (if the consignor has not advanced money to purchase imported goods)

Debit account 338 – Other payables (deducted from the amount received from the entrusting party)

There are accounts 111, 112,…

– Import tax, VAT on imported goods, special consumption tax must be paid on behalf of the import-entrusted enterprise:

In the entrusted import-export transaction (must have an entrusted import-export contract), the entrusted party is identified as the representative of the entrusting party to perform obligations to the State Budget (the person paying taxes on behalf of the entrusting party), the tax payment obligation is identified as that of the entrusting party. In this case, the entrusted party only reflects the tax amount paid to the State Budget as an amount paid on behalf of the entrusting party. When paying money to the State Budget, record:

Debit account 138 – Other receivables (must collect the amount paid on behalf of others)

Debit account 338 – Other payables (deducted from the amount received from the entrusting party)

There are accounts 111 and 112.

– Other expenses for import-entrusting enterprises related to import-entrusting activities (bank fees, customs inspection fees, warehouse rental fees, yard rental fees, loading and unloading fees, transportation fees, etc.), based on related documents, record:

Debit account 138 – Other receivables (details for each import-entrusted enterprise)

There are accounts 111, 112,…

1. d) For import commission fees and VAT calculated on import commission fees, based on VAT invoices and related documents, enterprises reflect import commission fee revenue, recording:

Debit accounts 131, 111, 112,… (total payment amount)

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (if any).

1. e) Offset other receivables and other payables at the end of the transaction, record:

Debit account 338 – Other payables

Credit account 138 – Other receivables.

3.6.2. At the export consignee

1. a) When receiving the export authorization of materials, equipment, and goods for the consignor, the enterprise monitors the goods received for export on its management system and explains on the Financial Report the quantity, type, specifications, quality of the goods received for export authorization, export period, payment subject…, and does not record the value of the goods received for export authorization on the Financial Situation Report. In the import-export authorization transaction (there must be an import-export authorization contract), the consignee is identified as the representative of the consignor to perform obligations to the State Budget (the person paying taxes on behalf of the consignor), the tax payment obligation is identified as that of the consignor.
2. b) Expenses on behalf of the export entrusting party, record:

Debit account 138 – Other receivables (1388)

There are accounts 111 and 112.

1. c) When receiving payment for goods from a foreign buyer, the enterprise reflects it as an amount payable to the consignor, recording:

Debit account 112 – Demand deposits

Credit account 338 – Other payables (3388).

1. d) Offset other receivables and payables, record:

Debit account 338 – Other payables

Credit account 138 – Other receivables.

3.7. Accounting for supported, sponsored, donated, or gifted assets

3.7.1. In case an enterprise is supported, sponsored, donated or given money or non-monetary assets, record:

Debit accounts 111, 112, 152, 211,…

Credit account 711 – Other income (if fixed assets are supported, sponsored, donated, or given without conditions and are not subject to the case of increasing the owner’s investment capital according to the decision of the competent authority)

Credit account 3387 – Revenue awaiting allocation (if fixed assets are supported, sponsored, donated, or given with conditions attached)

Credit account 4118 – Other capital (if allowed to increase owner’s investment capital according to decision of competent authority).

3.7.2. Accounting for conditional State support related to assets or income

1. a) Conditional State support is support in the form of the State transferring resources (money, non-monetary assets) to the enterprise, and the enterprise must comply with one or more certain conditions related to past or future business activities to receive State support. Including:

– State support related to assets: State support in which enterprises must meet all conditions related to the construction, investment, purchase, use,… of assets as prescribed by law to receive State support (for example, State support in a number of fields for enterprises to research, train and produce semiconductor chips, artificial intelligence,… or scientific and technological activities, innovation and national digital transformation,…).

– State support related to income: is other State support for enterprises in addition to the above-mentioned asset-related support.

1. b) Accounting for State support related to assets:

– When an enterprise receives State support with conditions related to assets, record:

Debit accounts 111, 112, 152, 211,…

Credit account 3387 – Revenue awaiting allocation.

– When the enterprise satisfies the prescribed conditions to receive support:

+ In case the financial mechanism prescribes or the decision of the competent authority allows the State support related to the formation of fixed assets of the enterprise to be recorded as an increase in State capital at the enterprise or other items, based on related documents, record:

Debit account 3387 – Revenue awaiting allocation

Credit account 411 – Owner’s investment capital

There is a related account.

+ For the remaining cases, the enterprise periodically allocates the State’s support related to assets according to the depreciation time of the fixed assets or according to the number of expense periods in which the State’s support is used to offset the enterprise’s expenses, recording:

Debit account 3387 – Revenue awaiting allocation

Credit account 711 – Other income.

1. c) Accounting for State support related to income:

– In case the State support is not accompanied by conditions, record: Debit accounts 111, 112, 152,…

Credit account 711 – Other income.

– In case the State support is accompanied by conditions, record:

+ When businesses receive state support:

Debit accounts 111, 112, 152,…

Credit account 3387 – Revenue awaiting allocation.

+ Periodically, allocation:

Debit account 3387 – Revenue awaiting allocation

Credit account 711 – Other income.

3.7.3. In case the enterprise fails to meet the prescribed conditions and must return the support to the State.

Debit account 3387 – Revenue awaiting allocation

There are accounts 111, 112,…

3.7.4. In case an enterprise receives support in the form of money, fixed assets, etc. from other organizations or individuals to relocate its business premises, workplace, etc.

– When receiving money, fixed assets,… compensation, support for relocation of business premises or workplace, record:

Debit accounts 111, 112, 211,…

Credit account 3387 – Revenue awaiting allocation.

– When an enterprise relocates its workplace or business location, it records a reduction in demolished assets to relocate its workplace or business location, and records:

Debit account 214 – Depreciation of fixed assets (accumulated depreciation value)

Debit account 811 – Other expenses (remaining value)

There is account 211 – Tangible fixed assets.

– When an enterprise uses the compensation and support received to invest in building working facilities and business locations, record:

Debit accounts 241, 211,…

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112,…

– Transfer to other income the part of compensation and support for relocation or investment in construction of working facilities and business locations when completing each part of the work for which support is received, record:

Debit account 3387 – Revenue awaiting allocation

Credit account 711 – Other income.

 

ACCOUNT 341 – LOANS AND FINANCIAL LEASE DEBITS

1. Accounting principles
2. a) This account is used to reflect the amount of loans, financial lease debts and the payment status of loans and financial lease debts of the enterprise. This account does not reflect loans in the form of bond issuance or preferred stock issuance classified as liabilities.
3. b) Enterprises must monitor in detail the payment terms of loans and financial leasing debts. Loans, borrowings, and financial leasing debts with a repayment period of more than 12 months from the end of the accounting period, enterprises must present them as long-term loans and financial leasing debts. Loans, borrowings, and financial leasing debts with a repayment period of 12 months or less from the end of the accounting period or the enterprise has no right to refuse the payment obligation at any time within 12 months from the end of the accounting period, enterprises must present them as short-term loans and financial leasing debts to have a payment plan.
4. c) Borrowing costs directly related to the loan (other than interest payable), such as appraisal, auditing, loan application preparation, loan arrangement costs, etc., are gradually allocated over the loan term. Capitalization of borrowing costs must comply with Vietnamese Accounting Standard No. 16 – Borrowing costs. In case of borrowing to invest in subsidiaries, joint ventures, associates, etc., borrowing costs cannot be capitalized.
5. d) For financial lease debt, the total lease debt reflected on the credit side of Account 341 – Borrowings and financial lease debt is the total amount payable calculated by the present value of the minimum lease payment or the fair value of the leased asset.
6. d) Enterprises must account in detail and monitor each entity that lends, borrows, or lends money to the enterprise, each loan contract, each type of loaned asset, each loan, borrowing, or debt term, etc.
7. Structure and content of Account 341 – Loans and financial leasing debts

Debit:

– Amount of debt paid for loans and financial leases;

– The loan amount and debt are reduced due to the approval of the lender or creditor;

– Exchange rate difference due to revaluation of loan balances and financial lease debts is an item with foreign currency origin at the end of the period (in case the foreign currency exchange rate decreases compared to the accounting currency).

Creditor:

– Amount of loans and financial lease debt arising during the period;

– Exchange rate difference due to revaluation of loan balance and financial lease debt is an item with foreign currency origin at the end of the period (in case the foreign currency exchange rate increases compared to the accounting currency).

Credit balance: outstanding loans, borrowings, and financial lease debts not yet due at the end of the accounting period.

Account 341 – Loans and financial lease debts, has 2 sub-accounts:

– Account 3411 – Loans: This account reflects the value of loans and borrowings in cash and the payment status of the enterprise’s loans and borrowings (this account does not reflect loans in the form of bond issuance).

In case an enterprise incurs loan procedure costs directly related to a loan contract to finance long-term production and business activities (for many accounting periods) and the enterprise is certain to gain economic benefits in the future, the enterprise can open a detailed account of this Account to separately track the principal debt and the borrowing costs, in which the loan procedure costs are gradually allocated to Account 635 – Financial expenses each period using the straight-line method or the effective interest rate method (similar to Account 343 – Issued bonds).

– Account 3412 – Financial lease debt: This account reflects the value of financial lease debt and the financial lease debt payment status of the enterprise.

3. Accounting methods for some major economic transactions
4. a) When a business borrows:

– Reflecting the principal borrowed, record:

Debit accounts 111, 112,…

Credit account 341 – Loans and financial lease debts.

– Borrowing costs directly related to the loan (other than interest payable) such as auditing costs, appraisal document preparation, loan arrangement costs, etc. are recorded as:

+ When expenses arise, record:

Debit account 341 – Loans and financial lease debts (3411)

There are TTK 111, 112, 331,…

+ When allocating borrowing costs, record:

Debit accounts 627, 241,… (if capitalized)

Debit account 635 – Financial expenses (if not capitalized)

Credit account 341 – Loans and financial lease liabilities (3411).

– Periodically, reflect the amount of loan interest payable included in production and business expenses or capitalized, record:

Debit accounts 635, 627, 241,…

There are accounts 111, 112,… (if loan interest is paid periodically).

Credit account 335 – Payable expenses (if interest is paid in arrears)

Credit account 341 – Loans and financial lease debts (if interest is paid in advance).

– At the end of the loan term, the enterprise pays the principal and interest of the loan, recording:

+ In case of prepayment of interest, record:

Debit accounts 635, 627, 241,… (interest amount of last period)

Debit account 341 – Loans and financial lease debts.

There are accounts 111, 112,…

+ In case of periodic interest payment, record:

Debit accounts 635, 627, 241,… (interest amount on maturity date)

Debit account 341 – Loans and financial lease debts.

There are accounts 111, 112,…

+ In case of interest payment later, record:

Debit accounts 635, 627, 241,… (interest amount on maturity date)

Debit account 335 – Payable expenses (accumulated interest amount to maturity date)

Debit account 341 – Loans and financial lease debts.

There are accounts 111, 112,…

1. b) In case the loan is transferred directly to the seller to purchase inventory, fixed assets, or to pay for construction investment, record:

Debit accounts 152, 153, 156, 211, 213, 241,…

Debit account 133 – Deductible VAT (1332) (if any)

Credit account 341 – Loans and financial lease liabilities (3411).

1. c) Borrowing to pay or advance capital (pay in advance) to sellers and contractors for construction and installation to pay expenses, record:

Debit accounts 331, 641, 642,…

Credit account 341 – Loans and financial leases (3411).

1. d) Borrowing to invest in subsidiaries, joint ventures, associates, other investments,… record:

Debit accounts 221, 222, 228,…

Credit account 341 – Loans and financial lease liabilities (3411).

1. d) In case the interest payable is entered into the principal, record:

Debit account 635 – Financial expenses

Debit accounts 627, 241,… (if loan interest is capitalized)

Credit account 341 – Loans and financial lease liabilities (3411).

1. e) When repaying loans in cash or by customer debt collection, record:

Debit account 341 – Loans and financial lease debts (3411)

There are accounts 112, 131,…

1. g) In case of borrowing or lending using foreign currency items or borrowing or lending to purchase assets or repay debts, it must be converted into accounting currency units at the actual transaction exchange rate, recorded:

Debit accounts 111, 112, 211, 213, 221, 222, 331,…

Debit account 133 – Deductible VAT (if any)

Credit account 341 – Loans and financial lease liabilities (3411).

1. h) Accounting for transactions related to financial leasing activities: Implement according to the provisions of Account 212 – Financial leasing fixed assets.

 

ACCOUNT 343 – ISSUED BONDS

1. Accounting principles

1.1. This account is only applicable to enterprises that borrow capital by issuing bonds, used to reflect the bond issuance situation, including convertible bonds and the bond payment situation of the enterprise. This account is also used to reflect bond discounts, premiums, bond issuance costs and the allocation of discounts and premiums when determining borrowing costs to be included in production and business costs or capitalized for each period.

1.2. The nominal interest rate of issued bonds is determined according to the provisions of law.

The real interest rate (also known as the effective interest rate) is the intrinsic interest rate of the loan/borrowing including bond discounts or premiums. The real interest rate makes the present value of the cash flows payable from a regular, non-convertible bond during the expected life of the bond equal to the issue price minus (-) transaction costs at the issue date.

1.3. Accounting principles for ordinary bonds (bonds without conversion rights)

1. a) When a business borrows capital by issuing bonds, it can issue bonds at par value or with a discount or premium. In which:

– Issuing bonds at par value (issue price equal to par value): Issuing bonds at a price equal to the par value of the bond. This often occurs when the market interest rate is equal to the nominal interest rate of the issued bond;

– Issuing bonds at a discount (issue price is less than face value): Issuing bonds at a price less than the face value of the bond. The difference between the bond issue price being less than the face value of the bond is called the bond discount. This often occurs when the market interest rate is greater than the nominal interest rate of the issued bond;

– Issuing bonds with premium (issue price greater than face value): Issuing bonds at a price greater than the face value of the bond. The difference between the bond issue price greater than the face value of the bond is called the bond premium. This case often occurs when the market interest rate is less than the nominal interest rate of the issued bond.

1. b) Bond discounts and premiums only arise when a business borrows by issuing bonds and at the time of issuance there is a difference between the market interest rate and the nominal interest rate accepted by bond investors. Bond discounts and premiums are determined and recorded at the time of bond issuance. The difference between the market interest rate and the nominal interest rate after the time of bond issuance does not affect the value of the recorded premium or discount.
2. c) Enterprises use account 3431 – Ordinary bonds to reflect in detail the contents related to issued bonds, including: Bond face value; Bond discount/premium; Bond issuance costs. Enterprises must open detailed accounting books to track each type of ordinary bond according to each term, interest rate, face value and discount/premium (if any).
3. d) In case the enterprise issues bonds with discounts or premiums, such discounts or premiums shall be gradually allocated to financial expenses or capitalized according to the provisions of Vietnamese Accounting Standard No. 16 – Borrowing costs in accordance with the term of the bond using the straight-line method or the effective interest rate method. However, if the bond premium allocated periodically is greater than the bond interest at the nominal interest rate of the bond, the difference shall be accounted for in financial revenue. The use of the method of allocating discounts or premiums must be consistent with the provisions of Vietnamese Accounting Standards.
4. d) Enterprises must monitor discounts and premiums for each type of bond issued and the allocation of each discount and premium when determining borrowing costs to be included in production and business expenses or capitalized for each period according to the provisions of Vietnamese Accounting Standard No. 16 – Borrowing costs, specifically:

– Bond discounts are gradually allocated to each period’s borrowing costs throughout the term of the bond;

– Bond premium is gradually allocated to reduce borrowing costs each period during the term of the bond;

– In case the interest expense of bonds is eligible for capitalization, the loan interest and the discount or premium amortization capitalized in each period must not exceed the actual interest incurred and the discount or premium amortization in that period;

– The allocation of the discount or premium may use the effective interest method or the straight-line method:

According to the effective interest rate method: The discount or premium allocated to each period is calculated as the difference between the interest expense payable for each interest payment period (calculated as the book value of the bond at the beginning of the period multiplied (x) by the effective interest rate) and the nominal interest amount payable for each period. According to the effective interest rate method, the discount or premium allocated to each period is calculated as the difference between the interest expense payable for each interest payment period (calculated as the book value of the bond at the beginning of the period multiplied (x) by the effective interest rate) and the nominal interest amount payable for each period.

Straight-line method: The discount or premium is distributed evenly over the term of the bond.

In case an enterprise issues bonds with floating interest rates that are periodically re-determined according to the market, and the update of the floating interest rate will eliminate the discount or premium related to the advantages/disadvantages of the issued bonds, the discount or premium will be allocated for the period from the issuance date to the next interest rate closing date (the date on which the nominal interest rate of the bond is determined according to interest rate fluctuations in the market).

In case an enterprise issues bonds with floating interest rates that are periodically re-determined according to the market and the update of the floating interest rate does not eliminate the discount or premium related to the advantages/disadvantages of the issued bonds, the discount or premium will be allocated over the entire term of the issued bonds.

The allocation of discount or premium over the life of the issued bond can be by the straight-line method or the effective interest rate method and must be consistent for all bonds issued over accounting periods in accordance with the provisions of Vietnamese Accounting Standards.

1. e) In case of paying interest upon bond maturity, the enterprise must periodically calculate the bond interest payable each period to record it in production and business expenses or capitalize it into the value of unfinished assets according to regulations.
2. g) When preparing the Financial Position Statement, in the liabilities section, the issued bond index is reflected on a net basis (determined by the bond value at par value minus (-) Unallocated bond discount plus (+) Unallocated bond premium minus (-) Unallocated bond issuance costs for successfully issued bonds).
3. h) Bond issuance costs are usually necessary costs directly related to the issuance of corporate bonds (e.g., bond issuance consulting costs, issuance underwriting fees, etc.) that are gradually allocated in accordance with the bond term using the straight-line method or the effective interest rate method to be recorded in financial expenses or capitalized according to regulations and ensure consistency for all bonds issued through accounting periods according to regulations. Determining the bond term is based on the terms of the contract, contract performance conditions, the actual situation of the enterprise, etc.

In case an enterprise issues ordinary bonds unsuccessfully, the ordinary bond issuance costs must be allocated to both successful and unsuccessful ordinary bonds according to the number of bonds. The ordinary bond issuance costs allocated to unsuccessful bonds are recorded in financial operating expenses, while the ordinary bond issuance costs allocated to successful bonds are reflected in Account 3431 – Ordinary Bonds.

1. i) If the enterprise uses non-monetary assets to pay bonds:

– If the non-monetary asset used for payment is inventory, the enterprise must account for it as a transaction selling inventory in the form of barter;

– If the non-cash asset used for payment is fixed assets or investment real estate, the enterprise must account for it as a transaction of selling fixed assets or investment real estate.

1.4. Accounting principles for convertible bonds

1. a) Convertible bonds are bonds that can be converted into common shares of the same issuing organization under the conditions specified in the issuance plan. Enterprises issuing convertible bonds must carry out procedures and meet the conditions for issuing convertible bonds as prescribed by law.
2. b) Enterprises (issuers of convertible bonds) use Account 3432 – Convertible bonds to reflect the principal value of convertible bonds. Enterprises must open detailed accounting books to track each type of convertible bond according to each term, interest rate and face value.
3. c) Convertible bonds are reflected in Account 3432 – Convertible bonds are bonds that can be converted into a specified number of shares as specified in the issuance plan. Bonds that can be converted into an unspecified number of shares at maturity (for example, depending on the market value of the shares at maturity, etc.) or bonds with the right to convert into shares of another organization, etc. are accounted for as ordinary bonds.
4. d) The cost of issuing convertible bonds is gradually allocated in accordance with the bond term using the straight-line method or the effective interest rate method to be recorded in financial expenses or capitalized according to regulations and must be consistent for all bonds issued through accounting periods according to regulations.

In case an enterprise fails to issue convertible bonds, the cost of issuing convertible bonds must be allocated to both successfully issued and unsuccessful convertible bonds according to the number of bonds. The part of the cost of issuing convertible bonds allocated to unsuccessfully issued convertible bonds is accounted for in financial operating expenses.

The remaining convertible bond issuance costs related to successfully issued convertible bonds are allocated to both the debt and equity components in proportion to the proceeds of each component. The bond issuance costs allocated to the equity component are recorded in account 4113 – Bond conversion options. The bond issuance costs allocated to the debt component are recorded in account 3432 – Convertible bonds.

1. d) At the time of initial recognition, when issuing convertible bonds, enterprises must calculate and determine separately the value of the debt component (principal) and the equity component of the convertible bonds. The principal debt component of the convertible bonds is recorded as a liability; the equity component (stock options) of the convertible bonds is recorded as equity. The determination of the value of the components of the convertible bonds is carried out as follows:

– Determine the principal value of convertible bonds at the time of issuance

At the time of initial recognition, the principal value of the convertible bond is determined by discounting the nominal value of the future payment (including principal and interest) to the present value at the prevailing interest rate on the market at the time of transaction of similar bonds (same industry, loan term, with/without collateral, etc.) on the market but without the right to convert into shares. The cost of issuing convertible bonds is recorded as a reduction in the principal value of the convertible bond at the time of issuance. In case the interest rate of similar bonds cannot be determined, the enterprise can apply the method that the enterprise can borrow in the form of issuing debt instruments without the right to convert into shares (such as issuing ordinary bonds without the right to convert or borrowing by ordinary contracts) under the conditions of normal production and business activities of the enterprise.

The common loan interest rate in the market is the loan interest rate of a loan contract similar to a bond contract (in terms of loan term, with/without collateral, etc.) used in most transactions in the market. Enterprises can proactively determine the common loan interest rate in the market in a way that is most suitable to the production and business characteristics of the enterprise and does not violate the provisions of law.

Example of determining the principal value of convertible bonds at the time of issuance: On January 1, 20X5, Thang Long Joint Stock Company issued 1 million convertible bonds with a face value of VND 10,000, term of 3 years, nominal interest rate of 10%/year, interest payment once a year at the end of the year. The interest rate of similar non-convertible bonds is 15%/year. At maturity, each bond is converted into a share. Knowing that convertible bonds are issued to raise capital for normal production and business activities (interest is included in financial expenses). Determining the principal value of convertible bonds at the time of initial recording is performed (ignoring bond issuance costs) as follows:

Unit: Dong

	Nominal value of future payables		Discount rate		Present value of future payables
Year 1	1,000,000,000 (interest payable)	x	[1/1.15]	=	869,565,000
Year 2	1,000,000,000 (interest payable)	x	[1/1.15^2]	=	756,144,000
Year 3	1,000,000,000 (interest payable)	X	[1/1.15^3]	=	657,516,000
Year 3	10,000,000,000 (Loan principal payable)	x	[1/1.15^3]	=	6,575,160,000
Add					8,858,385,000

In this example, the total proceeds from the bond issuance are VND 10,000,000,000, of which the total present value of future payments including principal and interest on the bond is VND 8,858,385,000. This value is determined as the value of the principal portion of the convertible bond at the time of initial recognition and is recorded as a liability from the issuance of convertible bonds.

– Determine the value of the equity component of convertible bonds (bond conversion option)

The value of the equity component of a convertible bond is determined as the difference between the total amount of money received from the issuance of convertible bonds and the value of the debt component of the convertible bond at the time of issuance.

According to the above example, the value of the equity component of the convertible bond is determined as: 10,000,000,000 – 8,858,385,000 = 1,141,615,000 VND. The value of the equity component of the convertible bond is recorded as a stock option in the equity portion.

1. e) After initial recognition, the enterprise must adjust the principal value of the convertible bond by increasing the principal value of the bond for the difference between the bond interest payable calculated at the interest rate of similar bonds without conversion rights or the actual interest rate higher than the bond interest payable calculated at the nominal interest rate.

Example: Following the above example, the determination of financial expenses during the period and adjustment of the principal value of convertible bonds at the end of the period are as follows:

Unit: 1,000 VND

	Value of convertible bond principal at the beginning of the period	Financial expenses are recorded in the period (interest rate 15%/year)	Interest payable is calculated at a nominal rate of 10%/year	Adjusted value of convertible bond principal during the period	End-of-period convertible bond principal value
Year 1	8,858,385	1,328,760 [8,858,385 x 15%]	1,000,000	328,760	9,187,150
Year 2	9,187,150	1,378,070 [9,187,150 x 15%]	1,000,000	378,070	9,565,220
Year 3	9,565,220	1,434,780 [9,565,220 x 15%]	1,000,000	434,780	10,000,000

1. g) Upon maturity of convertible bonds:

– The value of the stock option of the convertible bond currently reflected in the equity portion is transferred to be recorded as capital surplus regardless of whether the bondholder exercises the option to convert into shares or not.

– In case the bondholder does not exercise the option to convert the bond into shares, the enterprise shall reduce the principal of the convertible bond corresponding to the amount of principal repayment of the bond.

– In case the bondholder exercises the option to convert the bond into shares, the enterprise shall reduce the principal of the convertible bond and increase the owner’s capital corresponding to the par value of the additional shares issued. The difference between the principal value of the convertible bond and the par value of the additional shares issued is recorded as capital surplus.

2. Structure and content of Account 343 – Issued bonds
3. a) Account 343 – Issued bonds has 2 sub-accounts:

– Account 3431 – Regular bonds;

– Account 3432 – Convertible bonds.

1. b) Structure and content of Account 3431 – Regular bonds

Debit:

– Payment of bonds at maturity;

– Bond discounts arising during the period;

– Bond premium allocation during the period;

– Bond issuance costs incurred.

Creditor:

– Value of bonds issued at par value during the period;

– Bond discount allocation during the period;

– Bond premium arising during the period;

– Allocation of bond issuance costs.

Credit Balance:

Value of debt due to bond issuance at the end of the accounting period.

1. c) Structure and content of Account 3432 – Convertible bonds

Debit:

– Payment of bond principal upon maturity if the bondholder does not exercise the option to convert into shares;

– Costs incurred in issuing convertible bonds;

– Transfer bond principal to increase equity if bondholders exercise the option to convert into shares.

Creditor:

– The value of the principal debt of the bond recorded at the time of issuance;

– The adjusted value increases the principal portion of the bond during the period;

– Allocation of convertible bond issuance costs.

Credit Balance:

The principal value of the bond at the end of the accounting period.

Enterprises can open detailed accounts Account 3431 – Regular Bonds and Account 3432 – Convertible Bonds (for example, bond par value, bond premium, bond discount, bond issuance costs, etc.) in accordance with the characteristics of production and business activities and management requirements of their unit.

3. Accounting methods for some major economic transactions

3.1. For the case of issuing regular bonds

3.1.1. In case of issuing regular bonds and allocating bond discounts and premiums (if any) using the straight-line method

3.1.1.1. Accounting for bond issuance at par value

1. a) Reflecting the amount of money collected from bond issuance, record:

Debit accounts 111, 112,… (amount collected from selling bonds at par value)

Credit account 3431 – Regular bonds.

1. b) Periodically, reflect the amount of bond interest payable included in production and business expenses or capitalized, record:

Debit accounts 635, 627, 241,…

There are accounts 111, 112,… (if loan interest is paid periodically).

Credit account 335 – Payable expenses (if interest is paid in arrears)

Credit account 3431 – Regular bonds (if interest is paid in advance).

1. c) At the end of the bond term, the enterprise pays the principal and interest of the bond to the bond buyer, recording:

+ In case of prepayment of interest, record:

Debit account 3431 – Regular bonds

There are accounts 111, 112,…

+ In case of periodic interest payment, record:

Debit accounts 635, 627, 241,… (interest amount on maturity date)

Debit account 3431 – Regular bonds.

There are accounts 111, 112,…

+ In case of interest payment later, record:

Debit accounts 635, 627, 241,… (interest amount on maturity date)

Debit account 335 – Payable expenses (accumulated interest amount to maturity date)

Debit account 3431 – Regular bonds.

There are accounts 111, 112,…

3.1.1.2. Accounting for issuing discounted bonds

1. a) In case of prepayment of bond interest upon issuance:

– Reflecting the amount of money collected from bond issuance, record:

Debit accounts 111, 112,… (total actual amount received)

Credit account 3431 – Regular bonds.

– Periodically, allocate bond interest and bond discount to production and business expenses in the period or capitalize, record:

Debit accounts 635, 627, 241

Credit account 3431 – Regular bonds (bond interest payable during the period according to nominal interest rate and bond discount allocation for each period).

– Bond payment at maturity, record:

Debit account 3431 – Regular bonds

There are accounts 111, 112,…

1. b) In case of periodic bond interest payment:

– When issuing bonds, record:

Debit accounts 111, 112,… (amount of money collected from selling bonds)

Credit account 3431 – Regular bonds.

– Periodically, reflect bond interest and allocate bond discount to production and business expenses in the period or capitalize, record:

Debit accounts 635, 241, 627

There are accounts 111, 112,… (bond interest payment amount payable during the period at nominal interest rate)

Credit account 3431 – Regular bonds (bond discount allocation each period).

– At the end of the bond term, the enterprise pays the principal and interest of the bond to the bond buyer, recording:

Debit accounts 635, 627, 241 (interest amount due and remaining bond discount that needs to be allocated to maturity)

Debit account 3431 – Regular bonds

There are accounts 111, 112,…

1. c) In case of interest payment later (when the bond matures):

– When issuing bonds, record:

Debit accounts 111, 112,… (amount of money collected from selling bonds)

Credit account 3431 – Regular bonds.

– Each period, enterprises must reflect the bond interest expense payable during the period and allocate bond discounts to production and business or capitalize, recording:

Debit accounts 635, 241, 627

Credit account 335 – Payable expenses (bond interest payable during the period at nominal interest rate)

Credit account 3431 – Regular bonds (bond discount allocation during the period).

– At the end of the bond term, the enterprise pays the principal and interest of the bond to the bond buyer, recording:

Debit account 335 – Payable expenses (total bond interest of previous periods)

Debit accounts 635, 627, 241 (interest amount due and remaining bond discount that needs to be allocated to maturity)

Debit account 3431 – Regular bonds

There are accounts 111, 112,…

3.1.1.3. Accounting for issuance of bonds with premium

1. a) In case of prepayment of bond interest upon issuance:

– Reflecting the amount of money collected from bond issuance, record:

Debit accounts 111, 112,… (total actual amount received)

Credit account 3431 – Regular bonds.

– Periodically, allocate bond interest and bond premium to production and business expenses in the period or capitalize, record:

Debit accounts 635, 627, 241

Credit account 3431 – Regular bonds (difference between the nominal interest of bonds payable and the bond premium allocated during the period).

– Bond payment at maturity, record:

Debit account 3431 – Regular bonds

There are accounts 111, 112,…

1. b) In case of periodic bond interest payment:

– When issuing bonds, record:

Debit accounts 111, 112,… (amount of money collected from selling bonds)

Credit account 3431 – Regular bonds

– Periodically, reflect bond interest and allocate bond premium to production and business expenses in the period or capitalize, record:

Debit accounts 635, 627, 241

Debit account 3431 – Regular bonds (bond premium allocation each period).

There are accounts 111, 112,… (bond interest payable during the period at nominal interest rate)

– At the end of the bond term, the enterprise pays the principal and interest of the bond to the bond buyer, recording:

Debit accounts 635, 627, 241 (Difference between maturity interest amount and remaining maturity bond premium that needs to be allocated)

Debit account 3431 – Regular bonds

There are accounts 111, 112,…

1. c) In case of interest payment later (when the bond matures):

– When issuing bonds, record:

Debit accounts 111, 112,… (amount of money collected from selling bonds)

Credit account 3431 – Regular bonds.

– Each period, the enterprise must provision in advance for the bond interest expense payable during the period and allocate the bond premium to production and business or capitalize it, recording:

Debit account 635 – Financial expenses (if not capitalized)

Debit accounts 241, 627 (if capitalized into the value of unfinished assets)

Debit account 3431 – Regular bonds (bond premium allocation during the period)

Credit account 335 – Payable expenses (bond interest payable during the period).

– At the end of the bond term, the enterprise pays the principal and interest of the bond to the bond buyer, recording:

Debit account 335 – Payable expenses (total bond interest of previous periods)

Debit accounts 635, 627, 241,… (interest amount on maturity date)

Debit account 3431 – Regular bonds

There are accounts 111, 112,…

3.1.1.4. Accounting for bond issuance costs:

– When bond issuance costs arise

Debit account 3431 – Regular bonds

There are accounts 111, 112,…

– Transfer all bond issuance costs allocated to the number of unsuccessfully issued bonds to financial expenses in the period, record:

Debit account 635 – Financial expenses

Credit account 3431 – Regular bonds.

– Periodically, allocate the cost of successful bond issuance to record an increase in production and business expenses or capitalize each period, record:

Debit accounts 241, 627, 635

Credit account 3431 – Regular bonds.

3.1.2. Accounting for issuance of regular bonds and allocation of bond discounts or premiums (if any) using the effective interest rate method

1. a) When issuing bonds, based on the actual amount collected, record

Debit accounts 111, 112,…

Credit account 3431 – Regular bonds.

– When bond issuance costs arise

Debit account 3431 – Regular bonds

There are accounts 111, 112,…

– Transfer all bond issuance costs allocated to the number of unsuccessfully issued bonds to financial expenses in the period, record:

Debit account 635 – Financial expenses

Credit account 3431 – Regular bonds.

1. b) Enterprises shall base on the nominal interest rate, bond issuance costs allocated to the number of successfully issued bonds and the discount or premium arising when issuing bonds to determine the actual interest rate of the issued bonds as the basis for calculating and allocating the bond interest amount to the production and business expenses of each period or capitalizing according to regulations.

– In case of prepayment of interest, record:

Debit accounts 635, 241, 627,… (according to actual interest rate)

Credit account 3431 – Regular bonds.

– In case of periodic interest payment:

Debit accounts 635, 241, 627,… (according to actual interest rate)

Debit account 3431 – Regular bonds (Difference between nominal bond interest rate is greater than actual interest rate of premium bond)

There are accounts 111, 112 (interest allocated for each period according to nominal bond interest rate)

Credit account 3431 – Regular bonds (Difference between nominal interest rate is less than real interest rate of discounted bonds).

– In case of interest payment later, record:

Debit accounts 635, 241, 627,… (according to actual interest rate)

Debit account 3431 – Regular bonds (Difference between nominal bond interest rate is greater than actual interest rate of premium bond)

Credit account 335 – Payable expenses (interest allocated to each period according to nominal bond interest rate)

Credit account 3431 – Regular bonds (The difference between the nominal interest rate of the bond is less than the actual interest rate of the discounted bond).

3.2. Accounting for convertible bond issuance

1. a) At the time of issuance, the enterprise determines the value of the principal and stock options of the convertible bond by discounting the nominal value of the future payment to its present value, recording:

Debit accounts 111, 112 (total revenue from issuing convertible bonds)

Credit account 3432 – Convertible bonds (principal debt)

Credit account 4113 – Bond conversion option (difference between amount received and principal of convertible bonds).

1. b) Cost of issuing convertible bonds:

– When costs of issuing convertible bonds arise, record:

Debit account 3432 – Convertible bonds (bond issuance costs allocated to principal debt component)

There are accounts 111, 112,…

– Transferring convertible bond issuance costs to unsuccessfully issued bonds, record:

Debit account 635 – Financial expenses (allocating bond issuance costs to the number of unsuccessfully issued convertible bonds)

Credit account 3432 – Convertible bonds.

– Transfer of convertible bond issuance costs for successfully issued bonds allocated to the capital component corresponding to the number of successfully issued bonds, record:

Debit account 4113 – Bond conversion option

Credit account 3432 – Convertible bonds.

1. c) Periodically, the enterprise records in financial expenses or capitalizes the amount of bond interest payable calculated at the interest rate of similar bonds without conversion rights or calculated at the common borrowing interest rate on the market to adjust the value of the principal debt portion of the convertible bonds and the portion of the cost of issuing successfully converted bonds allocated to the debt component, recording:

Debit accounts 241, 627, 635

Credit account 335 – Payable expenses (bond interest payable during the period calculated at nominal interest rate)

Credit account 3432 – Convertible bonds (the difference between the bond interest calculated at the actual interest rate or the interest rate of similar bonds without the right to convert higher than the bond interest payable during the period calculated at the nominal interest rate).

1. d) When convertible bonds mature:

– In case the bondholder does not exercise the option to convert the bond into shares, the enterprise shall repay the bond principal, recording:

Debit account 3432 – Convertible bonds

There are accounts 111, 112,…

At the same time, transfer the stock option value of convertible bonds to capital surplus, record:

Debit account 4113 – Bond conversion option

Credit account 4112 – Capital surplus.

– In case the bondholder exercises the option to convert the bond into shares, the enterprise shall reduce the principal of the convertible bond and increase the owner’s investment capital, recording:

Debit account 3432 – Convertible bonds

Credit account 4111 – Owner’s equity (at par value)

Credit account 4112 – Capital surplus (the difference between the value of additional shares issued at par value and the principal value of convertible bonds).

At the same time, transfer the stock option value of convertible bonds to capital surplus, record:

Debit account 4113 – Bond conversion option

Credit account 4112 – Capital surplus.

 

ACCOUNT 344 – RECEIVING DEPOSIT, BET

1. Accounting principles
2. a) This account is used to reflect the amounts of money that the enterprise receives as deposits or bets from outside units and individuals to ensure that services related to production and business are performed in accordance with signed economic contracts, such as receiving deposits or bets to ensure the performance of economic contracts, agency contracts, etc.
3. b) The accountant receiving deposits and bets must monitor in detail each deposit and bet amount received by each subject by term and by each type of original currency. Deposits and bets payable with a remaining term of 12 months or less or without the right to refuse payment obligations at any time within 12 months from the end of the accounting period must be presented as short-term debt, remaining deposits and bets must be presented as long-term debt.
4. c) In case of receiving pledge or mortgage by certificate of ownership or right to use assets (such as certificate of ownership or right to use real estate, savings book,…), it is not reflected in this account but presented in the Notes to the Financial Statements.
5. Structure and reflection content of Account 344 – Receiving deposits and bets

Debit: Refund of deposit and bet.

Credit Party: Receive deposit, bet in cash.

Credit balance: amount of deposits and bets not yet paid at the end of the accounting period.

3. Accounting methods for some major economic transactions
4. a) When receiving deposits or bets from outside units or individuals, record:

Debit accounts 111, 112,…

Credit account 344 – Receive deposits and bets (details for each subject).

1. b) When returning deposits or bets to partners, record:

Debit account 344 – Received deposits and bets

There are accounts 111, 112,…

1. c) In case the depositing or betting unit violates the economic contract signed with the enterprise, it will be fined according to the agreement in the economic contract:

– When receiving a fine for violating a signed economic contract: If deducted from the deposit or bet, record:

Debit account 344 – Received deposits and bets

Credit account 711 – Other income.

– When paying the remaining deposit or bet, record:

Debit account 344 – Received deposits, bets (deducted fines)

There are accounts 111 and 112.

 

ACCOUNT 347 – DEFERRED INCOME TAX PAYABLE

1. Accounting principles
2. a) This account is used to reflect the current value and the situation of increases and decreases in deferred income tax payable. Deferred income tax payable is determined on the basis of temporary taxable differences arising during the year and the current income tax rate according to the following formula:

Deferred income tax payable

=

Taxable temporary difference

x

Current corporate income tax rate (%)

In case at the time of recording deferred income tax payable, the enterprise knows in advance that there will be a change in the corporate income tax rate in the future, if the refund of deferred income tax payable falls within the period when the new tax rate has taken effect, the tax rate applied to record deferred income tax payable shall be calculated according to the new tax rate.

1. b) Tax base of assets or liabilities and Temporary differences:

– The tax base of an asset is the amount that will be deducted from taxable income when the book value of the asset is recovered. If the income is not taxable, the tax base of the asset is equal to the book value of that asset. The tax base of a liability is its book value minus (-) the amount that will be deducted from taxable income when the liability is paid in future periods. For revenue received in advance, the tax base is its book value, minus (-) the amount of revenue that is not taxable in the future.

– Temporary differences are the differences between the book value of assets or liabilities in the Financial Position Statement and the tax base of such assets or liabilities. Temporary differences are of two types: Deductible temporary differences and Taxable temporary differences. Taxable temporary differences are temporary differences that give rise to income tax payable when determining taxable income in the future when the book value of asset items is recovered or liabilities are settled.

+ Temporary timing differences are just one of the cases of temporary differences, for example: If accounting profit is recorded in one period but taxable income is calculated in another period.

+ Temporary differences between the book value of an asset or liability and the tax base of that asset or liability may not be temporary differences in time, for example: When revaluing an asset, the book value of the asset changes but if the tax base does not change, a temporary difference arises. However, the time to recover the book value and the tax base does not change, so this temporary difference is not a temporary difference in time.

+ Accountants do not continue to use the concept of “Permanent difference” to distinguish it from temporary difference when determining deferred income tax because the time to recover assets or pay liabilities as well as the time to deduct those assets and liabilities from taxable income are not different.

1. c) A deferred tax liability should be recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which, at the time of the transaction, affects neither accounting profit nor taxable profit (or loss).
2. d) At the end of the accounting period, the enterprise must determine the temporary taxable differences arising in the current year as the basis for determining the amount of deferred income tax payable recorded in the year.
3. d) The recognition of deferred income tax payable during the year is carried out according to the principle of offsetting the deferred income tax payable arising in this year with the deferred income tax payable recorded from previous years but recorded as a reduction (reversal) this year, according to the principle:

– If the amount of deferred income tax payable arising in the year is greater than the amount of deferred income tax payable being reversed in the year, the enterprise only records an additional deferred income tax payable as the difference between the amount of deferred income tax payable arising being greater than the amount being reversed in the year;

– If the amount of deferred income tax payable arising in the year is less than the amount of deferred income tax payable being reversed in the year, the enterprise only records a reduction (reversal) of the deferred income tax payable by the difference between the amount of deferred income tax payable arising being less than the amount being reversed in the year.

1. e) Deferred income tax liabilities arising during the year that are not related to items recognized directly in equity should be recognized as deferred income tax expenses arising during the year.
2. g) Enterprises must reduce deferred income tax payable when temporary taxable differences no longer affect taxable profits (when assets are recovered or liabilities are settled).
3. h) Offsetting of deferred income tax liabilities and deferred income tax assets is only performed when preparing the Financial Position Statement, not performed on the accounting books.
4. Structure and content of Account 347 – Deferred income tax payable

Debit:

Deferred income tax liability decreased (reversed) during the period.

Creditor:

Deferred income tax liabilities are recognized in the period.

Credit Balance:

Deferred income tax liability remaining at the end of the accounting period.

3. Accounting methods for some major economic transactions

At the end of the year, accountants base on the “Table of determining deferred income tax payable” to record deferred income tax payable arising from transactions during the year into deferred corporate income tax expense:

1. a) If the amount of deferred income tax payable arising in the year is greater than the amount of deferred income tax payable to be refunded in the year, the enterprise only records the additional deferred income tax payable as the difference between the amount of deferred income tax payable arising greater than the amount to be refunded in the year, and records:

Debit account 8212 – Deferred corporate income tax expense

Credit account 347 – Deferred income tax payable.

1. b) If the amount of deferred income tax payable arising in the year is less than the amount of deferred income tax payable reversed in the year, the enterprise only records a reduction (reversal) of the deferred income tax payable as the difference between the amount of deferred income tax payable arising and the amount reversed in the year, recording:

Debit account 347 – Deferred income tax payable

Credit account 8212 – Deferred corporate income tax expense.

 

ACCOUNT 352 – PROVISIONS FOR PAYABLES

1. Accounting principles
2. a) This account is used to reflect the existing provisions for payables and the status of provisioning and use of provisions for payables of the enterprise.
3. b) Provisions for payables are only recorded when the following conditions are satisfied:

– The enterprise has a present obligation (legal or constructive) as a result of a past event;

– It is probable that an outflow of economic benefits will be required to settle the obligation; and

– Provide a reliable estimate of the value of that liability.

1. c) The amount recognised as a provision is the best estimate of the amount required to settle the present obligation at the end of the reporting period.

Enterprises must clearly explain the bases for estimating provisions for payables and the information that the enterprise uses related to these estimates (for example, the most reasonable estimate of the cost, the assessment of the enterprise owner, historical data, the method of estimating value, etc.) in the Notes to the Financial Statements.

1. d) The amount of provisions for payables is determined at the end of the accounting period for setting up. In case the amount of provisions for payables to be set up in this accounting period is greater than the amount of provisions for payables set up in the previous accounting period but not fully used, the difference shall be recorded in the production and business expenses of that accounting period. In case the amount of provisions for payables to be set up in this accounting period is less than the amount of provisions for payables set up in the previous accounting period but not fully used, the difference shall be reversed and recorded as a reduction in the production and business expenses of that accounting period.

The provision for construction warranty is established at the end of the accounting year for each project based on the revenue from construction services performed during the period in accordance with the provisions of the law on construction, and is included in the cost of sales. In case the amount of provision for construction warranty established is greater than the actual cost incurred, the difference is reversed into Account 641 – Cost of sales.

1. d) Only expenses related to the provision for payables that have been established shall be offset by that provision for payables.
2. e) No provision should be recognised for future operating losses unless they relate to an onerous contract and the criteria for recognising a provision are met. If an enterprise has a onerous contract, the present obligation under the contract should be recognised and measured as a provision and a separate provision should be made for each onerous contract. A onerous contract is a contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received from the contract, then the present obligation under the contract should be recognised and measured as a provision.

For example: Enterprises must record provisions for payables for contracts with high risks (contracts with the quantity of inventory that the enterprise has signed an irrevocable commitment to sell to customers that is greater than the total quantity of inventory that the enterprise currently has plus (+) the quantity of inventory that the enterprise can purchase or produce additionally to supply to customers under the contract). The determination of these provisions is carried out according to the provisions of Vietnamese Accounting Standard No. 18 – Provisions, contingent assets and liabilities and is accounted for in the cost of goods sold.

1. g) Provisions for payables usually include:

– Product and goods warranty reserve;

– Construction warranty reserve;

– Provision for business restructuring;

– Other provisions, including provisions for severance pay, unemployment benefits as prescribed by law, provisions for high-risk contracts, environmental restoration provisions, etc., in which the costs required to be paid for obligations related to the contract exceed the economic benefits expected to be obtained from that contract.

1. h) A provision for enterprise restructuring costs is only recognized when all conditions for recognizing a provision are met as prescribed in Vietnamese Accounting Standard No. 18 – Provisions, contingent assets and liabilities. In case of enterprise restructuring, joint liability only arises when the enterprise:

– Have a specific official plan to clearly define the business restructuring, which must include at least the following 5 contents:

+ All or part of the relevant business;

+ Important positions affected;

+ The estimated positions, duties and number of employees who will receive compensation when they are forced to leave their jobs;

+ The expenses to be paid; and

+ When will the plan be implemented?

– Make a firm estimate of the affected entities and proceed with the restructuring process by initiating the implementation of the plan or communicating important issues to the affected entities of the restructuring.

1. i) A restructuring provision is only intended to cover direct costs arising from the restructuring activity, which are costs that satisfy both conditions:

– Required for restructuring activities;

– Not related to the regular operations of the business.

The restructuring provision does not include costs such as: Retraining or transferring existing staff; Marketing; Investment in new systems and distribution networks.

1. k) When setting up provisions for payables, depending on the nature of the provision, the enterprise shall record it in the relevant accounts:

– For business restructuring provisions, businesses record them in business management expenses.

– For high-risk contract provisions: For provisions related to inventories to perform contracts, enterprises record them in cost of goods sold; and for contracts with other high risks, enterprises record them in other expenses.

– Provisions for product, goods and construction warranty liabilities are recorded in selling expenses.

1. l) For fixed asset lease contracts with provisions stipulating that upon the end of the contract, the enterprise is obliged to repair, maintain, and restore the asset to its original state, the enterprise is allowed to make provision for repair, maintenance, and restoration costs in accordance with the provisions of Vietnamese Accounting Standard No. 18 – Provisions, contingent assets and liabilities. The accounting for provision for repair, maintenance, and restoration costs to return the asset to its original state is accounted for similarly to environmental restoration provisions.
2. Structure and content of Account 352 – Provisions for payables

Debit:

– Record a reduction in payable provisions when an expense arises related to the initially established provision;

– Record a reduction (reverse) in the provision for payables when the enterprise is certain that it will no longer suffer an economic decline due to not having to pay for debt obligations;

– Record the reduction in the payable provision for the difference between the payable provision to be established this year being less than the unused payable provision established last year.

Creditor:

Reflects the amount of provisions for payables set up during the period.

Credit balance :

Reflects the amount of provisions available at the end of the accounting period.

Account 352 has 4 sub-accounts:

– Account 3521 – Product and goods warranty reserve: This account is used to reflect the product and goods warranty reserve for the quantity of products and goods determined to be consumed during the period;

– Account 3522 – Construction warranty reserve: This account is used to reflect the construction warranty reserve for construction works and construction items according to the level prescribed by the law on construction based on the construction service revenue performed during the period;

– Account 3523 – Enterprise restructuring provision: This account reflects the amount of provision payable for enterprise restructuring activities, such as business relocation costs, employee support costs, etc.;

– Account 3524 – Other payable provisions: This account reflects other payable provisions as prescribed by law in addition to the provisions reflected above, such as: environmental restoration provisions, costs of cleaning, restoring and returning the site; provisions for severance pay and job loss as prescribed by law; provisions for high-risk contracts, etc.

Enterprises can open additional detailed accounts of Account 3524 – Other payable provisions to track each type of payable provisions in accordance with the characteristics of production and business activities and management requirements of their unit.

Enterprises must explain in the Financial Statements information about legal obligations or joint obligations, basis for estimating the value (if any),… of the obligation to restore the environment, clean up, restore, and return the site.

3. Accounting methods for some major economic transactions
4. a) Accounting method for product and goods warranty provisions

– In case a business sells goods to customers with an obligation to provide a warranty to repair damages caused by manufacturing errors discovered during the warranty period of the products and goods, the business shall estimate the warranty costs based on the quantity of products and goods determined to be consumed during the period. When making provisions for repair and warranty costs of products and goods sold, record:

Debit account 641 – Sales expenses

Credit account 352 – Provision for payables (3521).

– When expenses arise related to the initially established product warranty provision, such as raw material costs, direct labor costs, fixed asset depreciation costs, outsourced service costs…:

+ In case there is no independent department for product and goods warranty:

(+) When expenses related to product and goods warranty arise, record:

Debit accounts 621, 622, 627,…

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 152, 214, 331, 334, 338,…

(+) At the end of the period, transfer the actual product and goods warranty costs incurred during the period, record:

Debit account 154 – Cost of production and unfinished business

There are accounts 621, 622, 627,…

(+) When repairing and delivering completed products to customers under warranty, record:

Debit account 352 – Provision for payables (3521)

Debit account 641 – Sales expenses (reserve for product warranty, missing goods)

Credit account 154 – Cost of production and business in progress.

+ In case there is an independent department for product and goods warranty

Amount payable to independent warranty department for product and goods warranty costs, recorded:

Debit account 352 – Provision for payables (3521)

Debit account 641 – Sales expenses (smaller difference between provision for product and goods warranty compared to actual warranty expenses)

Credit account 336 – Internal payables.

– At the end of the accounting period, the enterprise must determine the amount of product and goods warranty reserves that need to be set up:

+ In case the amount of provision to be established in this accounting period is greater than the amount of provision for payables established in the previous accounting period but not fully used, the difference is recorded as an expense and recorded as follows:

Debit account 641 – Sales expenses

Credit account 352 – Provision for payables (3521).

+ In case the amount of provisions for payables to be established in this accounting period is less than the amount of provisions for payables established in the previous accounting period but not fully used, the difference is recorded as a reduction in expenses, recorded as follows:

Debit account 352 – Provision for payables (3521)

Credit account 641 – Sales expenses.

1. b) Construction warranty provision accounting method

– When an enterprise estimates or determines the amount of provisions payable for construction warranty based on construction service revenue performed during the period in accordance with the provisions of the law on construction, record:

Debit account 641 – Sales expenses

Credit account 352 – Provision for payables (3522).

– When expenses arise related to the provision for construction warranty that was initially established, such as raw material costs, direct labor costs, fixed asset depreciation costs, outsourced service costs, etc.:

+ In case the enterprise itself performs the construction warranty:

(+) When expenses related to the warranty arise, record:

Debit accounts 621, 622, 627,…

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 152, 214, 331, 334, 338,…

(+) At the end of the period, transfer the actual warranty costs incurred during the period, record:

Debit account 154 – Cost of production and unfinished business

There are accounts 621, 622, 627,…

(+) When the construction repair and warranty is completed and handed over to the customer, record:

Debit account 352 – Provision for payables (3522)

Debit account 641 – Sales expenses (difference between the provision amount set aside and actual warranty expenses)

Credit account 154 – Cost of production and business in progress.

+ In case the enterprise outsources the construction warranty, record:

Debit account 352 – Provision for payables (3522)

Debit account 641 – Sales expenses (difference between the provision amount set aside and actual warranty expenses)

Debit account 133 – Deductible VAT (if any)

There are accounts 112, 331,…

– After the construction warranty period expires, if the construction is no longer under warranty or the amount of the construction warranty reserve is greater than the actual cost incurred, the difference must be refunded and recorded as follows:

Debit account 352 – Provision for payables (3522)

Credit account 641 – Sales expenses.

1. c) Accounting method for provisions for business restructuring and provisions for other payables

– When setting up provisions for business restructuring costs, other payable provisions, and provisions for high-risk contracts, record:

Debit accounts 632, 642, 811,…

Credit account 352 – Provisions for payables (3523, 3524).

– When setting up provisions for environmental restoration costs, site clearance, restoration and return costs, severance allowance provisions according to law,…, record:

Debit accounts 627, 641, 642,…

Credit account 352 – Payable provisions.

– When actual expenses related to the established payable provision arise, record:

Debit account 352 – Provision for payables (3523, 3524)

There are accounts 111, 112, 241, 331,…

1. d) At the end of the accounting period, the enterprise must determine the amount of provisions for payables that need to be set up:

– In case the amount of provisions for payables to be established in this accounting period is greater than the amount of provisions for payables established in the previous accounting period but not fully used, the difference shall be recorded as an expense and recorded as follows:

Debit accounts 627, 632, 641, 642, 811,…

Credit account 352 – Payable provisions.

– In case the amount of provisions for payables to be established in this accounting period is less than the amount of provisions for payables established in the previous accounting period but not fully used, the difference is recorded as a reduction in expenses, recorded as follows:

Debit account 352 – Provision for payables.

There are accounts 627, 632, 641, 642, 811,…

1. d) In some cases, enterprises do not make provisions but may seek a third party to pay part or all of the costs for performing the enterprise’s provision obligation (for example, through insurance contracts, compensation or warranty obligations of suppliers), the third party may reimburse the amounts that the enterprise has paid. When an enterprise receives a reimbursement from a third party to pay part or all of the costs for the provision, the difference between the amount compensated and the actual costs incurred related to performing the provision obligation, is recorded as:

Debit accounts 111, 112,…

Credit account 711 – Other income.

 

ACCOUNT 353 – REWARD AND WELFARE FUND

1. Accounting principles
2. a) This account is used to reflect the current amount and the increase and decrease of the reward fund, welfare fund and bonus fund for the company’s executive management board of the enterprise. The reward fund and welfare fund are deducted from the enterprise’s post-corporate income tax profit to be used for reward work, material benefits encouragement, serving public welfare needs, improving and enhancing the material and spiritual life of employees.
3. b) The establishment, management and use of the reward fund, welfare fund and bonus fund for the company’s executive management board shall be carried out in accordance with the financial mechanism or regulations of current law.
4. c) Bonus funds, welfare funds, and company executive board bonus funds must be accounted for in detail for each type of fund.
5. d) For fixed assets invested and purchased with welfare funds when completed and used in production and business, the enterprise shall record a decrease in the welfare fund and at the same time record an increase in the owner’s investment capital.
6. d) For fixed assets invested and purchased with welfare funds when completed and used for the welfare needs of the enterprise, the enterprise transfers from the Welfare Fund (Account 3532) to the Welfare Fund that has formed fixed assets (Account 3533). These fixed assets do not depreciate fixed assets into expenses, but periodically calculate depreciation of fixed assets every month/year to reduce the Welfare Fund that has formed fixed assets.
7. Structure and content of Account 353 – Reward and welfare fund

Debit:

– Expenditures for bonus fund, welfare fund, and company executive management bonus fund;

– Reduce the welfare fund that has formed fixed assets when calculating depreciation of fixed assets or due to sale, liquidation, discovery of shortage when taking inventory of fixed assets or transferring to production and business activities;

– Investing and purchasing fixed assets with welfare funds upon completion to serve welfare needs;

– Provide reward and welfare funds for subordinates.

Side Yes

– Set up reward fund, welfare fund, and management bonus fund from profit after corporate income tax;

– Bonus and welfare funds are provided by superiors;

– The welfare fund has formed fixed assets increased due to investment and purchase of fixed assets using the completed welfare fund and put into use for welfare activities.

Credit Balance:

Number of bonus funds and welfare funds remaining at the end of the accounting period.

Account 353 – Reward and welfare fund, has 4 sub-accounts:

– Account 3531 – Bonus fund: Reflects the current amount, provisioning and spending status of the enterprise’s bonus fund.

– Account 3532 – Welfare fund: Reflects the current amount, provision and expenditure of the enterprise’s welfare fund.

– Account 3533 – Welfare fund for forming fixed assets: Reflects the current amount, increase and decrease of the welfare fund for forming fixed assets of the enterprise.

– Account 3534 – Bonus fund for the company’s executive management board: Reflects the current amount, provisioning and spending status of the Bonus fund for the company’s executive management board.

3. Accounting methods for some major economic transactions
4. a) During the year, when temporarily deducting the reward and welfare fund, record:

Debit account 421 – Undistributed profit after tax

Credit account 353 – Reward and welfare fund (3531, 3532, 3534).

1. b) At the end of the year, determine the bonus and welfare funds to be additionally allocated, record:

Debit account 421 – Undistributed profit after tax

Credit account 353 – Reward and welfare fund (3531, 3532, 3534).

1. c) Deduct the reward fund to reward employees in the enterprise, record:

Debit account 353 – Reward and welfare fund (3531)

Credit account 334 – Payable to employees.

1. d) Use welfare fund to pay for hardship allowances, vacations for employees, and mass cultural and artistic movements, record:

Debit account 353 – Reward and welfare fund (3532)

There are accounts 111, 112,…

1. d) When selling products and goods covered by the reward and welfare fund, the enterprise reflects the revenue from selling products and goods, recording:

Debit account 353 – Reward and welfare fund (total payment amount)

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (33311) (if any).

1. e) When a superior enterprise provides reward and welfare funds to a subordinate unit, record:

– At the parent company, record:

Debit account 353 – Reward and welfare fund (3531, 3532, 3534)

There are accounts 111, 112,…

– At the subordinate enterprise, record:

Debit accounts 111, 112,…

Credit account 353 – Reward and welfare fund (3531, 3532, 3534).

1. g) Using welfare funds to support areas of natural disasters, fires, charity,… record:

Debit account 353 – Reward and welfare fund (3532)

There are accounts 111 and 112.

1. h) When investing in and purchasing completed fixed assets using welfare funds to put into use for the cultural and welfare purposes of the enterprise, record:

Debit account 211 – Tangible fixed assets (original price)

Debit account 133 – Deductible VAT (if deductible)

There are accounts 111, 112, 241, 331,…

If input VAT is not deductible, the original cost of fixed assets includes VAT.

Also, note:

Debit account 3532 – Welfare fund

Account 3533 – Welfare fund has formed fixed assets.

1. i) Periodically, calculate depreciation of fixed assets invested and purchased with welfare funds, used for cultural and welfare needs of the enterprise, record:

Debit account 3533 – Welfare fund has formed fixed assets

Credit account 214 – Depreciation of fixed assets.

1. k) When transferring, liquidating fixed assets invested or purchased with welfare funds, used for cultural and welfare activities:

– Record reduction in fixed assets sold or liquidated:

Debit account 3533 – Welfare fund has formed fixed assets (remaining value)

Debit account 214 – Depreciation of fixed assets (depreciation value)

Credit account 211 – Tangible fixed assets (original price).

– Reflects revenues and expenses from sale and liquidation of fixed assets:

+ For expenses, record:

Debit account 353 – Reward and welfare fund (3532)

Debit account 133 – Deductible VAT (if deductible)

There are accounts 111, 112, 334,…

+ For revenues, record:

Debit accounts 111, 112

Credit account 353 – Reward and welfare fund (3532)

Credit account 3331 – VAT payable (if any).

1. l) In case the business owner decides to reward the Board of Directors and the Board of Management from the Company’s Management and Executive Board Bonus Fund, record:

Debit account 3534 – Bonus fund for the Company’s management and operations

There are accounts 111, 112,…

 

ACCOUNT 356 – SCIENCE AND TECHNOLOGY DEVELOPMENT FUND

1. Accounting principles
2. a) This account is used to reflect the current amount, increase and decrease of the enterprise’s Science and Technology Development Fund. The enterprise’s Science and Technology Development Fund is used in accordance with the provisions of law on science, technology and innovation.
3. b) The Science and Technology Development Fund is accounted for in the enterprise’s management expenses to determine the business results of the period. The establishment and use of the enterprise’s Science and Technology Development Fund must comply with the provisions of law.
4. c) In case an enterprise uses the Science and Technology Development Fund to finance the purchase of fixed assets that require installation, testing, research, or trial production, the proceeds from the sale of trial products shall be offset against trial production costs according to the following principles:

– The difference between the amount of money collected from selling trial products higher than the trial production costs is recorded as a reduction in the original price of fixed assets formed from the Science and Technology Development Fund;

– The difference between the amount of money collected from selling trial products lower than the trial production costs is recorded as an increase in the original cost of fixed assets formed from the Science and Technology Development Fund.

1. d) Periodically, enterprises shall prepare a Report on the level of deduction, use and settlement of the Science and Technology Development Fund and submit it to the competent authority as prescribed by law.
2. Structure and content of Account 356 – Science and technology development fund:

Debit:

– Use and transfer of the Science and Technology Development Fund according to the provisions of law;

– Reduce the Science and Technology Development Fund that has formed assets when calculating depreciation of fixed assets; when using supplies, raw materials, allocating tools and equipment, asset rental costs for many periods,… to serve science and technology activities and innovation; the remaining value of fixed assets, supplies, raw materials, tools and equipment that have not been allocated or used when transferring or selling for liquidation;

– Reduce the Science and Technology Development Fund that has formed assets when the assets formed from the Science and Technology Development Fund are transferred to serve production and business purposes.

Creditor:

– Deduction of Science and Technology Development Fund into business management expenses;

– Amounts received from the Science and Technology Development Fund according to the provisions of law.

Credit balance: The remaining amount of the enterprise’s Science and Technology Development Fund at the end of the accounting period.

Account 356 – Science and Technology Development Fund has 2 sub-accounts:

– Account 3561 – Science and Technology Development Fund: Reflects the current amount and the status of provisions and expenditures of the science and technology development fund.

– Account 3562 – Science and technology development fund that has formed assets: Reflects the current amount, increase and decrease of the science and technology development fund that has formed fixed assets, inventories, financial investments, etc. Depending on the characteristics of operations and management requirements, enterprises can open account 3562 as detailed accounts to track each type of asset in the Science and technology development fund that has formed assets.

3. Accounting methods for some major economic transactions

3.1. During the year, when setting up the Science and Technology Development Fund, record: Debit account 642 – Business management expenses

There is account 356 – Science and technology development fund (3561).

3.2. When an enterprise spends and uses the Science and Technology Development Fund to serve scientific and technological activities according to the provisions of law:

1. a) In case an enterprise spends the Science and Technology Development Fund to purchase raw materials, tools, equipment, rent assets, supplies, etc. for immediate use in science and technology activities during the period, based on relevant accounting documents, record:

Debit account 356 – Science and technology development fund.

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331,…

1. b) In case an enterprise spends the Science and Technology Development Fund to purchase materials, equipment, lease assets, prepaid equipment for many periods,… for use in science and technology activities according to regulations:

– When purchasing materials, fixed assets, renting assets, prepaid equipment for many periods,… based on related accounting documents, record:

Debit accounts 152, 153, 242,…

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331,…

Also note:

Debit account 3561 – Science and technology development fund

Account 3562 – Science and technology development fund has formed assets

– When an enterprise releases materials and equipment from the warehouse for use or allocates assets and equipment rented in advance for many periods,… for use in scientific and technological activities during the period, record:

Debit account 3562 – Science and technology development fund has formed assets Credit accounts 152, 153, 242,…

3.3. When investing in and purchasing fixed assets using the Science and Technology Development Fund for use in science and technology activities according to regulations:

1. a) Accounting for investment and purchase of fixed assets

– When investing in and purchasing fixed assets, record:

Debit accounts 211, 213 (original price) (Fixed assets purchased for immediate use)

Debit account 241 – Construction in progress (Fixed assets must be installed and tested)

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331…

Also, note:

Debit account 3561 – Science and technology development fund

Debit account 642 – Business management expenses (in case the difference due to the use of the Fund for scientific and technological activities is higher than the current balance of the Fund that the enterprise chooses to include in the expenses of the period)

Account 3562 – Science and technology development fund has formed assets.

– In case of completed construction fixed assets, when the final settlement value of fixed assets is approved, if there is a difference between the provisional value and the approved asset value:

+ If the approved asset value is lower than the estimated price:

Related account debt

There are accounts 211, 213 (adjusted amount to reduce original price)

At the same time, increase the Science and Technology Development Fund that has formed assets and decrease the Science and Technology Development Fund:

Debit account 3562 – Science and technology development fund has formed assets

There is account 3561 – Science and technology development fund.

+ If the approved asset value is higher than the provisional price, record:

Debit accounts 211, 213 (Amount adjusted to increase original price)

Have related account

At the same time, adjust down the Science and Technology Development Fund that has formed assets and increase the Science and Technology Development Fund:

Debit account 3561 – Science and technology development fund

Account 3562 – Science and technology development fund has formed assets.

1. b) In case of investment and purchase of fixed assets that must be installed and tested, record:

– Accountant collects trial production costs and records:

Debit account 154 – Cost of production and unfinished business

Debit account 133 – Deductible VAT

There are accounts 111, 112, 152, 331,…

– Accounting for the difference between revenue from trial production products and trial production costs, record:

Debit accounts 111, 112,… (Revenue from trial production products)

Debit account 241 – Unfinished construction (The difference between the revenue from trial production products lower than the trial production costs)

Credit account 154 – Work in progress costs (Trial production costs)

There is account 241 – Construction in progress (The difference between the revenue from trial production products being higher than the trial production costs).

– When the trial run is completed, the fixed asset is handed over to a state capable of operating in the manner intended by the enterprise, record:

Debit account 211 – Tangible fixed assets

Credit account 241 – Construction in progress.

Also, note:

Debit account 3561 – Science and technology development fund

Debit account 642 – Business management expenses (in case the difference due to the use of the Fund for science and technology activities is higher than the current balance of the Fund and the enterprise chooses to calculate the difference into the expenses of the period)

Account 3562 – Science and Technology Development Fund has formed assets.

1. c) In case an enterprise uses the Fund to purchase fixed assets for scientific and technological activities higher than the current balance of the Fund and the enterprise chooses not to include the difference in the period’s expenses, the enterprise shall account for it according to each of the following options:

– In case the enterprise continues to deduct the Science and Technology Development Fund in the following accounting periods, when deducting the Science and Technology Development Fund in the following periods, the enterprise is allowed to transfer the difference between the amount used higher than the current balance of the Fund from Account 3561 to Account 3562 until it equals the difference.

– In case the enterprise does not make deductions for the Science and Technology Development Fund in the following accounting periods, the adjustment to reduce the Science and Technology Development Fund corresponding to the depreciation of fixed assets will be made until the detailed Credit balance on Account 3562 corresponding to that fixed asset is 0.

1. d) At the end of the accounting period, calculate depreciation of fixed assets invested and purchased using the Science and Technology Development Fund according to regulations, record:

Debit account 3562 – Science and technology development fund has formed assets.

Credit account 214 – Depreciation of fixed assets.

3.4. For the results of science and technology and innovation tasks, assets (materials, semi-finished products, etc.) obtained during the implementation of science and technology and innovation tasks of the enterprise, the enterprise must open a book to track assets in terms of quantity, type, technical standards, etc. and present them in the Financial Statements explanation. When liquidating or selling, they are accounted for as instructed in section 3.5.

3.5. When liquidating or selling fixed assets invested or purchased using the Science and Technology Development Fund:

– Record reduction of liquidated and sold fixed assets:

Debit account 3562 – Science and technology development fund has formed assets. (remaining value of fixed assets, tools, equipment, material value)

Debit account 214 – Depreciation of fixed assets (accumulated depreciation value) (if liquidating or selling fixed assets)

There are accounts 152, 153, 211, 213, 242.

– Record the proceeds from liquidation and sale of assets as other income, except where otherwise provided by law:

Debit accounts 111, 112, 131

Credit account 711 – Other income

Credit account 3331 – VAT payable (33311) (if any).

– Record costs directly related to the liquidation and sale of assets as other expenses, unless otherwise provided by law:

Debit account 811 – Other expenses

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331.

3.6. In case fixed assets are formed from the results of performing scientific, technological and innovation tasks of an enterprise, fixed assets are formed from the results of scientific research and technology development activities transferred to serve the production and business purposes of the enterprise, the value of fixed assets is accounted for in other income and the value of such fixed assets is depreciated according to regulations, recorded:

Debit account 356 – Science and technology development fund

Credit account 711 – Other income.

– In case fixed assets have been invested from the Fund to serve scientific and technological research activities and have not fully depreciated, if transferred to the enterprise’s production and business activities, record:

Debit account 3562 – Science and technology development fund has formed assets. (remaining value of fixed assets)

Credit account 711 – Other income.

3.7. When an enterprise is required to pay a portion of the unused or unused Science and Technology Development Fund to the National, Ministry, or Local Science and Technology Development Fund according to regulations, based on relevant documents, record:

Debit account 3561 – Science and technology development fund

There are accounts 111, 112,…

3.8. When an enterprise transfers the Science and Technology Development Fund of the parent company or corporation to a subsidiary or member enterprise or vice versa according to the provisions of law:

– For the transfer unit, record:

Debit account 356 – Science and technology development fund

Debit account 214 – Depreciation of fixed assets (if any)

There are accounts 111, 112, 211,…

– For the receiving unit, record:

Debit accounts 111, 112, 211,…

Credit account 214 – Depreciation of fixed assets (if any)

There is account 356 – Science and technology development fund.

3.9. In case of materials, tools and equipment purchased to serve the production and business activities of the enterprise, fixed assets being used for the production and business activities of the enterprise are transferred to be used for scientific research and technology development activities:

Based on the remaining value of fixed assets being used for production and business activities, the enterprise records an increase in the Science and Technology Development Fund that has formed assets and business management costs, recording:

Debit account 642 – Business management costs

Account 3562 – Science and technology development fund has formed assets (according to the remaining value of fixed assets, value of materials, tools, and instruments transferred to use for scientific research and technology development activities).

3.10. In case an enterprise pays the State budget the corporate income tax on the Science and Technology Development Fund that has been set aside but is not used for the right purpose, does not use or does not use up 70% of the annual Science and Technology Development Fund deduction, for the corporate income tax that is recovered according to the provisions of tax law and the late payment interest that arises, record:

Debit account 8211 – Current corporate income tax expense (Corporate income tax recovered)

Debit account 811 – Other expenses (Interest on late payment incurred)

There are accounts 111, 112, 333,…

3.11. In case of special assets serving scientific and technological activities and innovation but cannot be transferred to scientific and technological activities and innovation or cannot be transferred to production and business activities or cannot be liquidated or sold to outside except for demolition, destruction or sale of recovered materials and supplies, when the scientific and technological activities end, the enterprise must report to the competent authority of the enterprise the plan to handle those assets, based on the approval decision of the competent authority to account appropriately, record:

Debit accounts 3562, 642,…

Debit account 214 – Depreciation of fixed assets (if any)

There are accounts 152, 153, 211,…

 

ACCOUNT 357 – PRICE STABILIZATION FUND

1. Accounting principles
2. a) This account is used to reflect the current amount and fluctuations of the enterprise’s Price Stabilization Fund. The establishment, management and use of the Price Stabilization Fund are carried out in accordance with the provisions of law. Depending on each industry and business sector, enterprises can proactively add to the name of this Fund to suit their industry and business sector.
3. b) Enterprises must set up, manage, use and settle the Price Stabilization Fund in accordance with the provisions of law.
4. c) The price stabilization fund when set aside is included in the cost of goods sold. When using the fund for price stabilization purposes, the enterprise is allowed to record a reduction in the cost of goods sold.
5. Structure and content of Account 357 – Price Stabilization Fund

Debit:

Number of price stabilization funds used.

Creditor:

Amount of price stabilization fund provision arising during the period.

Credit Balance:

The remaining price stabilization fund of the enterprise at the end of the accounting period.

3. Accounting method for Price Stabilization Fund

– When setting up the Price Stabilization Fund according to the provisions of law, record:

Debit account 632 – Cost of goods sold

Credit account 357 – Price stabilization fund.

– When using the Price Stabilization Fund according to the provisions of law, record:

Debit account 357 – Price stabilization fund

Credit account 632 – Cost of goods sold.

 

PRINCIPLES OF OWNER’S EQUITY ACCOUNTING

1. Owner’s equity is the remaining net assets of the enterprise owned by shareholders, capital contributors (owners). Owner’s equity must be reflected and monitored in detail according to each source of formation such as: owner’s capital contribution, profit from business activities, difference in asset revaluation.
2. Enterprises are not allowed to record the owners’ capital contribution according to the charter capital on the business registration certificate or investment certificate. The capital contribution mobilized and received from the owners is always recorded according to the actual amount contributed, not recorded according to the amount committed to be contributed by the owners. In case of receiving capital contribution in the form of non-monetary assets, the enterprise must record it according to the fair value of the non-monetary assets on the date of capital contribution.
3. The receipt of capital contributions in the form of intangible assets such as copyrights, rights to use assets, brands, trademarks, etc. is carried out in accordance with the provisions of the law on enterprises and the law on intellectual property. Enterprises shall base on the nature of the contract to account in accordance with the provisions of law.
4. For innovative start-up enterprises, based on the agreement and contract for receiving capital contribution between the innovative start-up enterprise and the investor, determine and account for the received capital as a liability or equity on the basis of principles and regulations of Accounting Standards and Accounting Regime.
5. For the balance of account 441 – Capital for basic construction investment and account 466 – Funding for fixed asset formation (if any) that has been transferred to account 4118 – Other capital, the enterprise shall report to the owner or competent authority to make a decision on handling and base on that decision to make appropriate accounting.
6. The management and use of sources or funds belonging to the owner’s capital and the distribution of profits of the enterprise shall be carried out in accordance with the provisions of the law on enterprises and relevant laws.

 

ACCOUNT 411 – OWNER’S INVESTMENT CAPITAL

1. Accounting principles
2. a) This account is used to reflect the current capital invested by the owner and the increase or decrease in the owner’s capital. Subsidiaries reflect the capital invested by the parent company in this account.

Depending on the operational characteristics of each unit, this account can be used at affiliated units to reflect the business capital provided by the superior unit (in case it is not recorded in Account 3361 – Internal payables for business capital).

1. b) Owner’s capital investment includes:

– Initial capital contribution, additional contributions of owners;

– Supplement from equity funds, after-tax profits of business activities;

– Capital components of convertible bonds (option to convert bonds into shares);

– Non-refundable aid and other received amounts that the competent authority allows to increase the owner’s investment capital.

1. c) Enterprises only record in Account 411 – Owner’s capital according to the actual capital contributed by the owner, not according to the committed amount or receivables of the owners.
2. d) Enterprises must organize detailed accounting of owners’ investment capital according to each source of capital formation (such as owners’ contributed capital, capital surplus, other capital, bond conversion options (if any)) and track details for each organization and individual participating in capital contribution.
3. d) Owner’s capital investment is reduced when:

– Return capital to owners;

– Enterprises transfer capital to other enterprises;

– Enterprises issue shares at a price lower than par value;

– Cancel treasury stocks and own repurchased stocks according to the provisions of law;

– Dissolution, termination of operations according to the provisions of law;

– Other cases as prescribed by law.

1. e) Determine the investor’s capital contribution in foreign currency

– In case an enterprise has capital contributions from investors in a currency different from the accounting currency or vice versa (if any), the determination of the excess, deficiency or sufficient capital contribution compared to the charter capital shall be based on the provisions of the law on investment;

– In case an investor contributes capital to an enterprise in a currency other than the accounting currency, when recording in the accounting books, preparing and presenting the enterprise’s financial statements, it must convert it to the accounting currency to record the owner’s investment capital and capital surplus (if any) according to the actual transaction exchange rate at each time of capital contribution;

– During operation, enterprises are not allowed to re-evaluate the Credit balance of Account 411 – Owner’s capital investment for capital contributions received in foreign currency.

1. g) In case of receiving capital contribution in the form of non-cash assets, the enterprise must value the contributed assets to reflect the increase in the owner’s investment capital. The valuation of contributed assets must comply with the provisions of the law on enterprises (for example, it is strictly forbidden to falsely declare charter capital, not contributing the full amount of charter capital as registered; intentionally valuing contributed assets at incorrect values, etc.). For capital contribution in the form of intangible assets such as brands, trademarks, trade names, exploitation rights, project development, etc., the enterprise must comply with the provisions of the law on enterprises and the law on intellectual property.
2. h) For joint stock companies, shareholders’ equity capital is recorded at the actual price of shares issued but is reflected in detail according to two separate indicators: owner’s equity and capital surplus.

– Owner’s equity is reflected at the par value of the shares and is monitored in detail for common shares with voting rights and preferred shares. Enterprises must separately account for two types of preferred shares:

+ Preferred shares are classified and presented as liabilities on the Financial Statements of an enterprise if such shares or the Enterprise Charter:

(i) There is a provision requiring the issuer to repurchase the preferred shares at a specified future date or upon the satisfaction of specified conditions and the issuer cannot refuse the payment obligation (redeemable preferred shares). This obligation to repurchase shares must be clearly stated in the issuance documents at the time of issuance of the shares; or

(ii) There is no provision for redeemable preference shares but there is a provision that the issuer is required to pay dividends at a fixed rate/level regardless of the issuer’s business results; or

(iii) There is a provision for conversion into common shares but the issuance plan does not specify a fixed conversion ratio or a specific number of common shares to be converted but is based on the market price of the shares at the time of conversion.

+ Preferred shares are classified as equity if the preferred shares do not have the nature of preferred shares classified as liabilities, then the enterprise will present them as equity on the Statement of Financial Position.

– Capital surplus reflects the difference between the par value and the issue price of shares (including cases of re-issuance of own shares) and can be a positive surplus (if the issue price is higher than the par value) or a negative surplus (if the issue price is lower than the par value).

1. i) For other types of enterprises (not joint stock companies): The actual capital contribution of the owner according to the company’s charter will be reflected in the owner’s capital contribution index. The difference between the actual capital contribution value and the capital value according to the company’s charter will also be reflected in the capital surplus index.
2. k) Share issuance costs (including direct costs for issuing shares and other costs related to issuing shares): Share issuance costs corresponding to the number of shares that cannot be issued will be accounted for in financial operating expenses; share issuance costs corresponding to the number of shares that are successfully issued will be included in capital surplus.
3. l) Principles for determining and recording the option to convert bonds into shares (capital component of convertible bonds):

– The option to convert bonds into shares arises when a business issues bonds that can be converted into a specified number of shares as specified in the issuance plan.

– The value of the equity component of convertible bonds is determined as the difference between the total amount of money received from the issuance of convertible bonds and the value of the debt component of convertible bonds (see provisions in account 343 – Issued bonds).

– At the time of initial recognition, the value of the stock option of the convertible bond is recorded separately as the bond conversion option in the owner’s equity. When the bond matures, the enterprise transfers this option to record as capital surplus.

1. m) The use of owner’s capital, funds or sources of owner’s capital shall be carried out in accordance with the provisions of law.
2. Structure and content of Account 411 – Owner’s capital

Debit: Owner’s equity decreases due to:

– Return of capital contributions to equity owners;

– Transfer capital to other units;

– Issuing shares at less than par value;

– Dissolution, termination of business operations;

– Cancellation of treasury stocks, repurchased stocks (for joint stock companies).

Credit: Owner’s equity increased due to:

– Capital contributing owners;

– Supplement capital from undistributed profit after tax, from equity funds according to law provisions;

– Issuing shares at a price higher than par value;

– Generates value of option to convert bonds into shares;

– The value of supported, sponsored, donated or given assets is recorded as an increase in the owner’s investment capital according to regulations.

Credit Balance:

Current owner’s equity of the enterprise at the end of the accounting period.

Account 411 – Owner’s equity, has 4 sub-accounts:

– Account 4111 – Owner’s capital contribution: This account reflects the actual capital contributed by the owners. For joint stock companies, capital contribution from issuing shares is recorded in this account at par value. For other types of enterprises, this account reflects the actual capital contribution of the owner according to the company’s charter. Enterprises open detailed accounts according to the management requirements of the enterprise. For joint stock companies, account 4111 – Owner’s capital contribution has 2 level 3 accounts:

+ Account 41111 – Common shares with voting rights: This account reflects the total par value of common shares with voting rights;

+ Account 41112 – Preferred shares: This account reflects the total face value of preferred shares. Enterprises must track preferred shares in detail into 2 main groups: The group classified and presented as equity and the group classified and presented as liabilities on the Financial Position Statement.

– Account 4112 – Capital surplus: This account reflects the difference between the issue price and the par value of the shares; The difference between the repurchase price and the reissue price of the shares repurchased by the company; The difference between the actual capital contribution value and the capital value according to the Charter of the enterprise (belonging to other types of enterprises other than joint stock companies); The value of the option to convert bonds into shares at the time of maturity of the convertible bonds; Expenses directly related to the issuance of shares, except in the case where the issuance of shares is unsuccessful, the cost of the unsuccessful issuance of shares must be accounted for in the financial expenses of the period. This account may have a Credit balance or a Debit balance.

– Account 4113 – Bond conversion option: This account is only used by the issuer of convertible bonds, to reflect the equity component (stock option) of convertible bonds at the reporting time.

Structure and content of Account 4113 – Bond conversion option

Debit:

Carry forward the value of stock options to record an increase in capital surplus at the bond maturity date.

Creditor:

The stock option value of convertible bonds is recorded at the time of bond issuance.

Credit Balance:

Stock option value of convertible bonds at the end of the accounting period.

– Account 4118 – Other capital: This account reflects the owner’s investment capital increased due to additions from business results or supported, sponsored, donated, or gifted assets recorded as an increase in the owner’s investment capital according to the financial mechanism or decision of the competent authority; the difference (if any) between the cost to carry out the merger transaction and the book value of net assets on the separate financial statements of the merged enterprise in the case of a business merger performed between parties under common control; the difference due to revaluation of assets allowed to be recorded as an increase or decrease in the owner’s investment capital,…

3. Accounting methods for some major economic transactions

3.1. When an enterprise actually receives capital contributions or mobilizes capital from owners, record:

Debit accounts 111, 112 (if receiving capital contribution in cash)

Debit accounts 121, 128, 228 (if receiving capital contributions in the form of stocks, bonds, investments in other enterprises)

Debit accounts 152, 155, 156 (if receiving capital contribution in the form of inventory)

Debit accounts 211, 213, 217, 241 (if receiving capital contribution in the form of fixed assets, investment real estate)

Debit accounts 331, 338, 341 (if transferring loans, borrowings, payables into contributed capital)

Debit account 4112 – Capital surplus (difference between the value of assets and liabilities converted into capital contribution less than the par value of shares for joint stock companies or the value of capital contribution according to the charter for other types of enterprises) (if any)

Credit account 4111 – Owner’s equity

Credit account 4112 – Capital surplus (difference between the value of assets and liabilities converted into capital contribution greater than the par value of shares for joint stock companies or the value of capital contribution according to the charter for other types of enterprises) (if any).

3.2. In case an enterprise other than a joint stock company raises capital from capital contributing members.

1. a) When receiving actual capital contribution according to the enterprise’s charter, record:

Debit accounts 111, 112 (actual capital contribution value received)

Credit account 4111 – Owner’s equity.

1. b) In case an enterprise mobilizes capital from capital contributing members with a difference between the actual capital contribution value received and the capital value according to the enterprise’s Charter, record:

Debit accounts 111, 112 (actual capital contribution value received)

Debit account 4112 – Capital surplus (actual capital contribution value received is less than capital value according to the enterprise’s Charter) (if any)

Credit account 4111 – Owner’s capital contribution (capital value according to the enterprise’s Charter)

Credit account 4112 – Capital surplus (actual capital contribution value received is greater than capital value according to the enterprise’s Charter) (if any).

3.3. In case a joint stock company issues shares to raise capital from members and shareholders.

1. a) For enterprises that are not public companies:

Debit accounts 111, 112 (issue price)

Debit account 4112 – Capital surplus (issue price is less than par value) (if any)

Credit account 4111 – Owner’s equity (par value)

Credit account 4112 – Capital surplus (issue price greater than par value) (if any).

1. b) For enterprises that are public companies:

– When receiving money to buy shares from shareholders in the bank’s blocked account, record:

Debit account 112 – Demand deposits (total amount)

Credit account 3388 – Other payables.

– When the enterprise is granted a Certificate of Business Registration, record:

Debit account 3388 – Other payables

Debit account 4112 – Capital surplus (issue price is less than par value) (if any)

Credit account 4111 – Owner’s equity (par value)

Credit account 4112 – Capital surplus (issue price greater than par value) (if any).

At the same time, enterprises must present in the notes to the financial statements the cases where at the end of the accounting period the enterprise is conducting transactions or has completed transactions to issue shares to raise capital but has not yet received the Certificate of Business Registration to record an increase in the owner’s capital contribution in the financial statements.

3.4. In case an enterprise issues shares to pay dividends or distribute profits to owners or uses equity sources to increase or supplement charter capital.

– At the time an enterprise issues shares to pay dividends or distribute profits to owners or uses equity sources to increase or supplement charter capital, record:

Debit accounts 414, 418, 421,…

Credit account 4118 – Other capital.

– When the enterprise is granted a Certificate of Business Registration, record:

Debit account 4118 – Other capital

Credit account 4111 – Owner’s equity.

3.5. Collect direct costs related to the issuance of shares when incurred, record:

Debit account 4112 – Capital surplus

There are accounts 111 and 112.

The cost of unsuccessful stock issuance is recorded in financial expenses, recorded:

Debit account 635 – Financial expenses

Credit account 4112 – Capital surplus.

3.6. In case a joint stock company issues shares to invest in other enterprises

1. a) If the share issue price is greater than the par value, record:

Debit accounts 221, 222, 228

Credit account 4111 – Owner’s equity

Credit account 4112 – Capital surplus (if any).

1. b) If the share issue price is less than the par value, record:

Debit accounts 221, 222, 228

Debit account 4112 – Capital surplus (if any)

Credit account 4111 – Owner’s equity.

3.7. In case a joint stock company issues common shares from the reward fund to increase the owner’s investment capital, record:

Debit account 3531 – Reward fund

Debit account 4112 – Capital surplus (issue price lower than par value) (if any)

Credit account 4111 – Owner’s equity

Credit account 4112 – Capital surplus (issue price greater than par value) (if any).

3.8. Accounting for repurchasing shares issued by the company itself to cancel according to the provisions of law

– When the enterprise has completed the procedures to buy back the shares issued by the company itself according to the provisions of law, record:

Debit account 419 – Own shares repurchased (share repurchase price) Credit accounts 111, 112.

– During the process of stock repurchase, when costs directly related to the stock repurchase arise, record:

Debit account 419 – Own repurchased shares

There are accounts 111 and 112.

– When a business cancels its own repurchased shares according to the provisions of law, record:

Debit account 4111 – Owner’s equity (par value of shares);

Debit account 4112 – Capital surplus (if repurchase price is higher than par value) (if any)

Credit account 419 – Own repurchased shares (actual price of repurchased shares)

Credit account 4112 – Capital surplus (if repurchase price is lower than par value) (if any).

3.9. When receiving supporting, sponsored, donated or gifted assets that the competent authority requests to increase the owner’s investment capital, record:

Debit accounts 111, 112, 153, 211…

Credit account 411 – Owner’s capital (4118).

In other cases where the competent authority does not require an increase in the owner’s capital investment, the supported, sponsored, donated, and gifted assets shall be reflected in other income.

3.10. When returning capital contributions to owners in cash, record:

Debit account 411 – Owner’s capital investment (4111)

Debit account 4112 – Capital surplus (if any)

There are accounts 111, 112

Credit account 4112 – Capital surplus (if any).

3.11. In case an enterprise returns capital contributions in non-monetary assets (such as inventories, fixed assets, etc.), the value of capital contributions returned to the owner shall be determined based on the fair value of the non-monetary assets or the agreed price as assessed by the parties, recorded as follows:

Debit account 411 – Owner’s capital investment (4111)

Debit account 214 – Depreciation of fixed assets (accumulated depreciation value)

Debit account 811 – Other expenses (if the value of the capital contribution returned to the owner is assessed to be less than the book value of the non-cash asset)

There are accounts 152, 155, 156, 211, 213,… (book value)

Credit account 711 – Other income (if the value of the capital contribution returned to the owner is assessed to be greater than the book value of the non-monetary asset).

3.12. Accounting for bond conversion options

– At the time of issuing convertible bonds into shares, the enterprise determines the value of the principal and stock options of the convertible bonds by discounting the nominal value of the future payment to the present value, recording:

Debit accounts 111, 112 (total revenue from issuing convertible bonds)

Credit account 3432 – Convertible bonds (principal debt)

Credit account 4113 – Bond conversion option (difference between amount received and principal of convertible bonds).

– When the bond matures:

+ In case the bondholder does not exercise the option to convert the bond into shares, the enterprise shall repay the bond principal, recording:

Debit account 3432 – Convertible bonds

There are accounts 111, 112,…

+ In case the bondholder exercises the option to convert the bond into shares, the enterprise shall record a decrease in the principal of the convertible bond and an increase in the owner’s capital investment, recording:

Debit account 3432 – Convertible bonds

Credit account 4111 – Owner’s equity (at par value)

Credit account 4112 – Capital surplus (the difference between the value of additional shares issued at par value and the principal value of convertible bonds) (if any).

+ At the same time, the enterprise transfers the value of the bond conversion option to capital surplus (including the case where the bondholder does not exercise the option), recording:

Debit account 4113 – Bond conversion option

Credit account 4112 – Capital surplus.

 

ACCOUNT 412 – ASSET REFERENCE DIFFERENCE

1. Accounting principles
2. a) This account is used to reflect the difference due to revaluation of existing assets and the status of handling that difference in the enterprise. The assets being revaluation can be fixed assets, investment real estate, tools, equipment, products, goods, unfinished products, etc.
3. b) Differences in asset revaluation are reflected in this account in the following cases:

– When there is a State decision on asset revaluation;

– Other cases as prescribed by law.

1. c) This account does not reflect the difference in revaluation when contributing assets to invest in other entities or when restructuring an enterprise (if any) according to the provisions of the Enterprise Law. The difference in revaluation when contributing assets to invest in other entities or when restructuring an enterprise (if any) is reflected in Account 711 – Other income (if profit) or Account 811 – Other expenses (if loss).
2. d) Asset value is re-determined according to relevant legal provisions.
3. d) The price difference due to asset revaluation is accounted for and handled according to current laws.
4. Structure and content of Account 412 – Difference in asset revaluation

Debit:

– The difference in the decrease due to revaluation of assets;

– Handling of increased differences due to asset revaluation.

Creditor:

– The difference increased due to revaluation of assets;

– Handling of the difference in decrease due to revaluation of assets.

Account 412 – Difference in asset revaluation, may have a debit balance or a credit balance:

Debit Balance:

The difference in value due to revaluation of assets not yet settled at the end of the accounting period.

Credit Balance:

The difference increases due to revaluation of assets that have not been processed at the end of the accounting period.

3. Accounting methods for some major economic transactions
4. a) When there is a State decision on revaluation of fixed assets, investment real estate, materials, goods,…

– Re-evaluate materials and goods:

+ If the re-evaluation price is higher than the recorded accounting value, the price difference increases, record:

Debit accounts 152, 153, 155, 156

Credit account 412 – Difference in asset revaluation.

+ If the re-evaluation price is lower than the recorded accounting value, the difference in price reduction is recorded:

Debit account 412 – Difference in asset revaluation

There are accounts 152, 153, 155, 156.

– Revaluation of fixed assets and investment real estate: Based on the summary table of inventory and revaluation results of fixed assets and investment real estate:

+ Original price, remaining value, adjusted depreciation value increase, record:

Debit accounts 211, 213, 217 (increased original price)

Credit account 214 – Depreciation of fixed assets (adjusted depreciation value increases)

Credit account 412 – Difference in asset revaluation (remaining value adjusted to increase).

+ Original price, remaining value, adjusted depreciation value, record:

Debit account 412 – Difference in asset revaluation (remaining value adjusted downward)

Debit account 214 – Depreciation of fixed assets (adjusted depreciation value)

There are accounts 211, 213, 217 (original price adjusted down)

1. b) At the end of the accounting period, the handling of the difference in asset revaluation is based on the decision of the competent authority, recorded as:

Debit account 412 – Difference in asset revaluation

Have related account

Or

Related account debt

Credit account 412 – Difference in asset revaluation.

 

ACCOUNT 413 – EXCHANGE RATE DIFFERENCE

1. General provisions on exchange rates and exchange rate differences

1.1. Exchange rate difference is the difference arising from the actual exchange or conversion of the same amount of foreign currency into accounting currency at different exchange rates. Exchange rate difference mainly arises in the following cases:

– Economic transactions arising during the period related to buying, selling, exchanging and paying in foreign currency;

– Revaluation of foreign currency denominated monetary items at the end of the accounting period;

– Convert Financial Statements prepared in foreign currencies into Vietnamese Dong.

1.2. Types of exchange rates (hereinafter referred to as exchange rates) used in accounting

Enterprises with economic transactions arising in foreign currencies must record their accounting and prepare financial statements in a unified currency unit, which is Vietnamese Dong or the accounting currency unit. The conversion of foreign currencies into Vietnamese Dong or the accounting currency unit must be based on the actual transaction exchange rate or the recorded exchange rate depending on the content and nature of the economic transactions arising and the principles of applying exchange rates as guided in this Circular.

When an enterprise determines its tax obligations related to foreign currency transactions (declaration, settlement and tax payment), it shall comply with the provisions of tax law.

1.2.1. Actual transaction rate

Depending on the characteristics and management requirements of the unit, enterprises can choose the actual transaction exchange rate on the transaction date as the average transfer buying and selling exchange rate of the commercial bank where the enterprise regularly conducts transactions or an approximate exchange rate with the average transfer buying and selling exchange rate on the transaction date of the commercial bank where the enterprise regularly conducts transactions (hereinafter referred to as the approximate exchange rate). The approximate exchange rate must ensure that the difference does not exceed +/-1% compared to the average transfer buying and selling exchange rate on the transaction date. For example, the approximate exchange rate can be the average transfer buying and selling exchange rate determined daily, weekly or monthly based on the average between the transfer buying and selling exchange rate and the daily transfer selling exchange rate of the commercial bank. The use of the approximate exchange rate must ensure that it does not significantly affect the financial situation and business performance results during the accounting period of the enterprise.

In case the commercial bank where the enterprise regularly conducts transactions does not publish the exchange rate of the foreign currency in which the enterprise generates, the enterprise may choose an intermediate currency to convert to the unit’s accounting currency, but must apply it consistently according to the provisions of Vietnamese accounting standards. The enterprise must present in the Notes to the Financial Statements the basis for selecting that intermediate currency and the method of converting the foreign currency in which the transaction is generated to the enterprise’s accounting currency.

1.2.2. Book exchange rate

The book exchange rate includes the actual nominal book exchange rate or the weighted average book exchange rate. The application of the actual nominal book exchange rate or the weighted average book exchange rate depends on the characteristics and management requirements of the enterprise’s foreign currency-based monetary items.

1. a) The actual exchange rate for specific recording is the exchange rate determined when collecting receivables, other assets or when paying payables in foreign currency, determined according to the specific actual transaction exchange rate at each time the transaction occurred (if no revaluation has occurred) or the exchange rate that was re-evaluated at the end of the previous period of each subject (if revaluation has occurred).
2. b) The weighted average bookkeeping rate is the rate determined based on the average value converted into accounting currency at the actual transaction exchange rate for the debit side of cash accounts, receivables, other assets or the credit side of payable accounts divided by the amount of original currency in stock at the beginning of the period and the amount of original currency increased during the period for each object. The weighted average bookkeeping rate can be determined at the end of the period or at each payment time.

Enterprises must also monitor in the accounting books in detail the amount of original currency and the value converted into accounting currency of accounts such as cash, demand deposits, money in transit, receivables, payables and other accounts that are foreign currency items to serve as the basis for determining the book exchange rate for each foreign currency item. Enterprises must calculate the book exchange rate separately for each type of currency, asset of the enterprise (cash, demand deposits,…) or each debtor (Customer X, Seller Y,…) and each type of original currency (USD, EUR, JPY,…).

1.3. Monetary items denominated in foreign currency

Foreign currency monetary items are assets that are denominated in foreign currency or liabilities that are denominated in foreign currency. Foreign currency monetary items may include:

1. a) Cash, demand deposits, money in transit, term deposits in foreign currency and other financial investments recovered in foreign currency;
2. b) Receivables and payables denominated in foreign currency, except:

– Advance payments to sellers and expenses awaiting allocation in foreign currency. In case at the end of the accounting period there is certain evidence that the seller cannot provide goods or services and the enterprise will have to receive back advance payments in foreign currency, these amounts are considered as foreign currency-based monetary items.

– Advance payments from buyers and pre-received revenues in foreign currencies. In case at the end of the accounting period there is certain evidence that the enterprise cannot provide goods and services and will have to return the advance payments in foreign currencies to the buyers, these amounts are considered as foreign currency-based monetary items.

1. c) Loans, lending, borrowing, and borrowing in any form that are entitled to be recovered or have the obligation to be repaid in foreign currency.
2. d) Deposits, escrows and bets can be refunded in foreign currency; Deposits and bets must be refunded in foreign currency.

1.4. Principles of applying exchange rates to record accounting for economic transactions arising during the period in foreign currency

1.4.1. When buying and selling foreign currency (spot foreign currency purchase and sale contracts, forward contracts, futures contracts, options contracts, swap contracts); Is the exchange rate signed in the foreign currency purchase and sale contract between the enterprise and the commercial bank;

1.4.2. Apply actual transaction exchange rate

1. a) In case an enterprise has economic transactions arising in foreign currency but the contract does not specify a specific exchange rate, the enterprise shall use the actual transaction exchange rate specified in Clause 1.2.1 of this account to record the accounting for economic transactions arising during the period for each case as follows:

– Accounts reflecting other revenue and income. In the case of selling goods, providing services or income related to pre-received revenue or pre-receipt transactions from buyers, the revenue and income corresponding to the pre-received amount shall be applied the actual transaction exchange rate at the time of pre-receipt from the buyer (not applied according to the actual transaction exchange rate at the time of recording revenue and income).

– Accounts reflecting production, business and other costs. In the case of allocating pending expenses to production and business expenses in the period, the expenses are recorded at the actual transaction exchange rate at the time of prepayment (not applying the actual transaction exchange rate at the time of cost allocation).

– Accounts reflecting assets. In the case of assets purchased related to prepayment transactions to sellers, the asset value corresponding to the prepayment amount is applied to the actual transaction exchange rate at the time of prepayment to the seller (not applied to the actual transaction exchange rate at the time of asset recording).

– Debit the capital accounts in cash or other assets; Debit the accounts receivable; Debit the accounts payable when there is a transaction of prepayment to the seller.

– Creditor of accounts payable; Creditor of accounts receivable when there is a transaction of receiving advance payment from the buyer;

– Equity type accounts;

1. b) In case an enterprise uses the actual transaction exchange rate as prescribed in Clause 1.2.1 of this part to convert transactions arising in foreign currency into the accounting currency, the enterprise is allowed to use that actual transaction exchange rate to account for both the Debit and Credit sides of all foreign currency-based monetary items.

1.4.3. Applying the book exchange rate

Based on the characteristics and management requirements of the unit, enterprises are allowed to choose to apply the bookkeeping exchange rate as prescribed in Clause 1.2.2 of this part to record the accounting of economic transactions arising during the period for each of the following foreign currency-based monetary items:

– The Creditor has capital accounts in cash or other assets;

– Credits Accounts Receivable (except for prepayments from buyers);

– Debit Accounts receivable when finalizing the advance payment from the buyer due to the transfer of products, goods, fixed assets, provision of services, and accepted volume; Credit Accounts for deposit, escrow, and expenses awaiting allocation;

– Debit Accounts Payable (except for transactions of prepayment to sellers); Credit Accounts Payable when finalizing the prepayment to sellers upon receiving products, goods, fixed assets, services, and volume acceptance.

1.4.4. Handling of exchange rate differences arising during the period

When an enterprise applies the exchange rate specified in Clause 1.4.1, Clause 1.4.2 and Clause 1.4.3 of this account to account for transactions arising during the period in foreign currency, all arising exchange rate differences are immediately reflected in financial revenue (if profit) or financial expenses (if loss) to determine the business performance during the period.

1.4.5. Enterprises must explain in detail and clearly the accounting policy for exchange rates applied to account for transactions arising in foreign currencies in the notes to the Financial Statements and the choice of applicable exchange rates must ensure consistency according to the provisions of Vietnamese accounting standards.

1.5. Principles for applying exchange rates when revaluing foreign currency items at the end of the accounting period.

1.5.1. When preparing the Financial Statements, the enterprise must re-evaluate the balance of all foreign currency-based currency items at the average transfer exchange rate of the commercial bank where the enterprise regularly conducts transactions at the end of the accounting period. For the balance of non-term deposits in foreign currencies, the enterprise must re-evaluate the balance of all foreign currency-based currency items at the average transfer exchange rate of the commercial bank where the enterprise opens a deposit account. The enterprise shall not re-evaluate part or all of the value of receivables in foreign currencies for which provisions for bad debts have been made.

1.5.2. All exchange rate differences due to revaluation of foreign currency items at the end of the period must be reflected in financial income (if profit) or financial expenses (if loss) to determine the business results of the period. The exchange rate difference due to revaluation of foreign currency items at the end of the period must be presented in the business results report as the net amount between the total profit and the total loss due to revaluation of foreign currency items.

– In case, according to the provisions of law for state-owned enterprises, the exchange rate differences due to revaluation of foreign currency items in the pre-operation period of enterprises in which the State holds 100% of charter capital and implements national key projects and works associated with the task of stabilizing the macro-economy, security and national defense are different from the principles prescribed in this section (both in terms of allocation time, method of allocating exchange rate differences, etc.), they shall be implemented according to the provisions of law for state-owned enterprises. Accordingly, if these enterprises are allowed to re-suspend the profits/losses on exchange rate differences due to revaluation of foreign currency items, these re-suspended profits/losses must be collected and reflected in Account 413 – Exchange rate differences and gradually allocated to financial operating revenue or financial expenses when the enterprise comes into operation according to the principles:

+ Accumulated exchange rate loss in the pre-operation period is allocated directly from Account 413 – Exchange rate difference to financial expenses, without transferring through Account 242 – Expenses awaiting allocation;

+ Accumulated exchange rate gains in the pre-operation period are allocated directly from Account 413 to financial operating revenue, without being transferred through Account 3387 – Revenue awaiting allocation;

1.5.3. Enterprises must explain in detail and clearly the exchange rate applied to re-evaluate foreign currency items at the end of the accounting period in the notes to the Financial Statements and must ensure consistency according to the provisions of Vietnamese accounting standards.

1.5.4. Enterprises are not allowed to capitalize exchange rate differences into the value of unfinished assets.

3. Structure and content of Account 413 – Exchange rate difference

Debit:

– The exchange rate difference loss due to revaluation of foreign currency items in the period before the operation of enterprises in which the State holds 100% of charter capital and implements key national projects and works associated with the task of stabilizing the macro economy, security and national defense, if gradually allocated according to the provisions of law for state-owned enterprises (if any);

– Allocate the exchange rate difference profit due to revaluation of foreign currency items in the period before the operation of enterprises with 100% charter capital held by the State that implement national key projects and works associated with the task of stabilizing the macro economy, security and national defense (if any) into financial operating revenue to determine periodic business results according to regulations.

Creditor:

– The exchange rate difference profit due to revaluation of foreign currency items in the period before the operation of enterprises in which the State holds 100% of charter capital and implements key national projects and works associated with the task of stabilizing the macro economy, security and national defense, if gradually allocated according to the provisions of law for state-owned enterprises (if any);

– Allocate the exchange rate difference loss due to revaluation of foreign currency items in the period before the operation of enterprises with 100% charter capital held by the State that implement national key projects and works associated with the task of stabilizing the macro economy, security and national defense (if any) into financial expenses to determine periodic business results according to regulations.

Account 413 can have a debit balance or a credit balance.

Debit Balance:

Exchange rate loss due to revaluation of existing foreign currency monetary items at the end of the accounting period is reflected in account 413 as prescribed.

Credit Balance:

Exchange rate gains from revaluation of existing foreign currency items at the end of the accounting period are reflected in account 413 as prescribed.

4. Accounting methods for some major economic transactions

4.1. Accounting for exchange rate differences arising during the period

4.1.1. Accounting for exchange rate differences arising during the period in the case of using the recorded exchange rate to record the Credit side of the Cash Account, the Credit side of the Accounts Receivable, and the Debit side of the Accounts Payable in foreign currency:

1. a) When purchasing materials, goods, fixed assets, and services paid in foreign currency, record:

Debit accounts 151, 152, 153, 156, 157, 211, 213, 217, 241, 627, 641, 642,… (actual exchange rate on the transaction date)

Debit account 635 – Financial expenses (if loss)

There are accounts 111, 112 (according to the accounting exchange rate of accounts 111, 112).

Credit account 515 – Financial activity revenue (if profit).

1. b) When purchasing materials, goods, fixed assets, services from suppliers who have not yet paid, when borrowing or receiving internal debt… in foreign currency, based on the actual transaction exchange rate on the transaction date, record:

Debit accounts 111, 112, 152, 153, 156, 211, 627, 641, 642…

There are accounts 331, 341,…

1. c) When advancing money to sellers in foreign currency to purchase materials, goods, fixed assets, and services:

– Reflect the amount advanced to the seller according to the actual transaction exchange rate at the time of advance, record:

Debit account 331 – Payable to sellers (actual exchange rate at the time of advance payment)

Debit account 635 – Financial expenses (if loss)

There are accounts 111, 112 (according to the accounting exchange rate of accounts 111, 112)

Credit account 515 – Financial activity revenue (if profit).

– When receiving materials, goods, fixed assets, and services from the seller, the enterprise reflects according to the following principles:

+ For the value of materials, goods, fixed assets, and services corresponding to the amount in foreign currency advanced to the seller, the enterprise records it according to the actual transaction exchange rate at the time of advance payment, recording:

Debit accounts 151, 152, 153, 156, 157, 211, 213, 217, 241, 627, 641, 642,…

Debit account 133 – Deductible VAT (if any)

Credit account 331 – Payable to sellers (actual exchange rate at the time of advance payment).

+ For the value of materials, goods, fixed assets, and services that have not yet been paid, the enterprise records them at the actual transaction exchange rate at the time of receiving the goods, services, and fixed assets, and records:

Debit accounts 151, 152, 153, 156, 157, 211, 213, 217, 241, 627, 641, 642,… (actual exchange rate on the transaction date)

Debit account 133 – Deductible VAT (if any)

Credit account 331 – Payable to sellers (actual exchange rate on transaction date).

1. d) When paying debts payable in foreign currency (debts payable to sellers, loans, financial leasing debts,…):

Debit accounts 331, 338, 341,… (exchange rate recorded in accounting for each payable account)

Debit account 635 – Financial expenses (if loss)

There are accounts 111, 112 (accounting exchange rate of accounts 111, 112).

Credit account 515 – Financial activity revenue (if profit).

1. d) When revenue and other income arise in foreign currency, based on the actual transaction exchange rate at the time of revenue and income arising, record:

Debit accounts 111, 112, 131…

There are accounts 511, 711,…

Credit account 3331 – VAT payable (if any).

1. e) When receiving advance payment from the buyer in foreign currency to provide materials, goods, fixed assets, and services:

– Reflect the amount received in advance from the buyer at the actual exchange rate at the time of receipt, record:

Debit accounts 111, 112

Credit account 131 – Accounts receivable from customers.

– When transferring materials, goods, fixed assets, and services to buyers, enterprises must reflect according to the following principles:

+ For the revenue and income corresponding to the amount in foreign currency received in advance from the buyer, the enterprise records it according to the actual transaction exchange rate at the time of receipt in advance, recording:

Debit account 131 – Accounts receivable from customers (actual exchange rate at the time of receiving advance payment from the buyer)

There are accounts 511, 711

Credit account 3331 – VAT payable (if any).

+ For revenue and income that have not yet been collected, the enterprise records according to the actual transaction exchange rate at the time the revenue and income arise, recording:

Debit account 131 – Accounts receivable from customers

There are accounts 511, 711

Credit account 3331 – VAT payable (if any).

1. g) When collecting receivables in foreign currency (customer receivables, other receivables,…):

Debit accounts 111, 112 (actual exchange rate on transaction date)

Debit account 635 – Financial expenses (if loss)

There are accounts 131, 138,… (exchange rate recorded in accounting for each receivable account)

Credit account 515 – Financial activity revenue (if profit).

1. h) When lending and investing in foreign currency:

Debit accounts 121, 128, 221, 222, 228 (actual exchange rate on transaction date)

Debit account 635 – Financial expenses (if loss)

There are accounts 111, 112 (accounting exchange rate of accounts 111, 112)

Credit account 515 – Financial activity revenue (if profit).

1. i) Deposits and bets in foreign currency

– When depositing foreign currency or making a bet, record:

Debit account 244 – Deposit, bet (actual exchange rate at the time of deposit, bet)

Debit account 635 – Financial expenses (if loss)

There are accounts 111, 112 (accounting exchange rate)

Credit account 515 – Financial activity revenue (if profit).

– When receiving back the deposit, bet:

Debit accounts 111, 112 (actual exchange rate when receiving back the deposit, bet)

Debit account 635 – Financial expenses (if loss)

Credit account 244 – Deposits, bets (recorded exchange rate in account 244 of each deposit, bet)

Credit account 515 – Financial activity revenue (if profit).

4.1.2. In case an enterprise uses the actual transaction exchange rate to record the credit side of capital accounts in cash, the credit side of receivable accounts, and the debit side of payable accounts in foreign currency, the recording of exchange rate differences arising during the period is carried out at the time of the transaction or periodically depending on the characteristics of the business activities and management requirements of the enterprise. At the same time, at the end of the accounting period:

1. a) In case foreign currency items no longer have original currency balances, the enterprise must transfer all exchange rate differences arising during the period to financial revenue or financial expenses of the reporting period:

– Transferring exchange rate difference profits, record:

Debit accounts 111, 112, 128, 228, 131, 138, 331, 341,…

Credit account 515 – Financial activity revenue.

– Transferring exchange rate difference loss, record:

Debit account 635 – Financial expenses

There are accounts 111, 112, 128, 228, 131, 138, 331, 341,…

1. b) In case at the end of the accounting period, the foreign currency items still have original currency balance, the enterprise must re-evaluate these items at the end of the accounting period by multiplying the original currency balance of each item by the difference between the exchange rate according to the instructions in section 1.5.1 at the end of the accounting period with the weighted average exchange rate for the whole period.

4.2. Accounting for exchange rate differences due to revaluation of foreign currency items at the end of the period.

– For foreign currency-based currency items that are demand deposits in foreign currency, enterprises must re-evaluate the balances of all foreign currency deposit accounts at the average transfer buying and selling exchange rate of the commercial bank where the enterprise opens the deposit account at the end of the accounting period:

+ If exchange rate interest arises due to revaluation of foreign currency deposits, record:

Debit account 112 – Demand deposits

Credit account 515 – Financial activity revenue.

+ If there is an exchange rate loss due to revaluation of foreign currency deposits, record:

Debit account 635 – Financial expenses

Credit account 112 – Demand deposits.

– For foreign currency-denominated monetary items other than foreign currency demand deposits, re-evaluate them based on the average transfer buying and selling exchange rate of the commercial bank where the enterprise regularly conducts transactions.

+ If exchange rate profit arises, record:

Debit accounts 111, 128, 228, 131, 138, 331, 341,…

Credit account 515 – Financial activity revenue.

+ If there is an exchange rate loss, record:

Debit account 635 – Financial expenses

There are accounts 111, 128, 228, 131, 138, 331, 341,…

– When presenting the exchange rate difference due to revaluation of foreign currency items at the end of the period in the statement of business performance, the enterprise must present the net amount between the total profit and the total loss of the exchange rate difference due to revaluation of foreign currency items at the end of the period.

4.3. In cases where the provisions of law on state-owned enterprises allow enterprises in which the State holds 100% of the charter capital and implements key national projects and works associated with the tasks of stabilizing the macro-economy, security and national defense to suspend the profit/loss due to revaluation of foreign currency-based monetary items in the period before operation (if any):

– Exchange rate gains due to revaluation are reflected in the credit side of Account 413 – Exchange rate differences;

– Exchange rate loss due to revaluation is reflected in the Debit side of Account 413 – Exchange rate difference;

– When the enterprise comes into operation, transfer the exchange rate difference into the financial revenue or financial expenses of each period.

 

ACCOUNT 414 – DEVELOPMENT INVESTMENT FUND

1. Accounting principles
2. a) This account is used to reflect the current amount and the increase and decrease of the enterprise’s development investment fund.
3. b) The development investment fund is set aside from undistributed after-tax profits and is used to invest in expanding the scale of production, business or in-depth investment of the enterprise.
4. c) The allocation and use of development investment funds must comply with the current financial mechanism for each type of enterprise or the owner’s decision.
5. Structure and content of Account 414 – Development investment fund

Debit:

Situation of spending and use of business development investment funds.

Creditor:

Development investment fund increased due to being set aside from after-tax profit.

Credit Balance:

Number of development investment funds available at the end of the accounting period.

3. Accounting methods for some major economic transactions
4. a) During the period, when temporarily setting aside development investment funds from undistributed after-tax profits, record:

Debit account 421 – Undistributed profit after tax

Credit account 414 – Development investment fund.

1. b) At the end of the year, determine the amount of development investment fund allocated, the enterprise calculates the additional allocated amount (if any), and records:

Debit account 421 – Undistributed profit after tax

Credit account 414 – Development investment fund.

1. c) In case a joint stock company issues additional shares from the Development Investment Fund, the enterprise must transfer the Development Investment Fund to the owner’s investment capital, recording:

Debit account 414 – Development investment fund

Credit account 4111 – Owner’s equity (at par value).

1. d) When an enterprise that is not a joint stock company supplements its charter capital from the Development Investment Fund, the enterprise must transfer the Development Investment Fund to the Owner’s Investment Capital, recording:

Debit account 414 – Development investment fund

Credit account 4111 – Owner’s equity.

 

ACCOUNT 418 – OTHER FUNDS BELONGING TO OWNER’S EQUITY

1. Accounting principles

This account is used to reflect the current amount and the increase or decrease of other funds belonging to the owner’s equity. Other funds belonging to the owner’s equity are formed from undistributed profits after tax. The allocation and use of other funds belonging to the owner’s equity must follow the current financial mechanism for each type of enterprise or according to the owner’s decision.

2. Structure and content of Account 418 – Other funds belonging to equity

Debit:

The situation of spending and using other funds belonging to the enterprise’s equity.

Creditor:

Other equity funds increased due to allocations from undistributed profits after tax.

Credit Balance:

Other funds in equity available at the end of the accounting period.

3. Accounting methods for some major economic transactions
4. a) Provision for other funds belonging to equity from undistributed profit after tax, record:

Debit account 421 – Undistributed profit after tax

Credit account 418 – Other funds belonging to equity.

1. b) When using other funds belonging to equity, record:

Debit account 418 – Other funds belonging to owner’s equity

There are accounts 111, 112, 331,…

1. c) In case of additional capital contribution of owners from other funds belonging to owner’s equity, record:

Debit account 418 – Other funds belonging to owner’s equity

Credit account 4111 – Owner’s equity.

 

ACCOUNT 419 – OWN REPURCHASED SHARES

1. Accounting principles
2. a) This account is used to reflect the current value and the increase or decrease in the value of treasury shares or shares issued by a joint stock company and repurchased by the same company (repurchased shares). The act of an enterprise repurchasing its own shares to cancel or sell or using treasury shares for re-issuance or as ordinary shares is carried out in accordance with the provisions of current law.
3. b) The value of the shares repurchased by the enterprise is reflected in this account by the actual repurchase price, including the repurchase price and costs directly related to the repurchase of shares, such as transaction costs, information costs, etc.
4. c) At the end of the accounting period, the actual value of treasury stocks and repurchased stocks is presented on the Financial Position Statement by recording a negative number (…) to reduce the owner’s equity on the Financial Position Statement.
5. d) This account does not reflect the value of shares that the company purchases from other joint stock companies for the purpose of holding for investment.
6. d) In cases where, according to current law, an enterprise is allowed to use its own repurchased shares to sell immediately after the repurchase or use treasury shares to reissue or make bonus shares, the cost price of the shares sold is calculated using the weighted average method.
7. Structure and content of Account 419 – Shares repurchased by oneself

Debit:

Actual value of own shares bought back when purchased.

Creditor:

– The actual value of the shares bought back by oneself is sold immediately after the buyback according to the provisions of law.

– Actual value of treasury stocks sold or used as common stocks according to the provisions of law.

Debit Balance:

The actual value of the shares repurchased by the enterprise that it is currently holding at the end of the accounting period.

3. Accounting methods for some major economic transactions
4. a) Accounting for repurchasing shares issued by the company itself:

– When the enterprise has completed the procedures to buy back the shares issued by the company itself according to the provisions of law, record:

Debit account 419 – Own shares repurchased (share repurchase price)

There are accounts 111 and 112.

– During the process of stock repurchase, when costs directly related to the stock repurchase arise, record:

Debit account 419 – Own repurchased shares

There are accounts 111 and 112.

1. b) When an enterprise cancels treasury stocks or repurchased shares according to the provisions of law, record:

Debit account 4111 – Owner’s equity (par value of shares);

Debit account 4112 – Capital surplus (if repurchase price is higher than par value) (if any)

Credit account 419 – Own repurchased shares (actual price of repurchased shares)

Credit account 4112 – Capital surplus (if repurchase price is lower than par value) ( if any).

1. c) In case an enterprise is allowed to sell its own repurchased shares according to the provisions of law:

Debit accounts 111, 112 (selling price)

Debit account 4112 – Capital surplus (selling price lower than cost price of own shares repurchased) (if any)

Credit account 419 – Own repurchased shares (cost price of own repurchased shares)

Credit account 4112 – Capital surplus (selling price higher than cost price of own shares repurchased) (if any).

– Expenses incurred directly related to the sale of own repurchased shares as prescribed by law, recorded:

Debit account 4112 – Capital surplus

There are accounts 111 and 112.

1. d) In case an enterprise is allowed to use its own repurchased shares as common shares according to the provisions of law:

Debit accounts 421, 414,… (treasury stock issuance price)

Debit account 4112 – Capital surplus (the difference between the repurchase price and the issuance price of the repurchased shares) (if any)

Credit account 419 – Own repurchased shares (cost price of own repurchased shares)

Credit account 4112 – Capital surplus (the difference between the repurchase price and the issuance price of the repurchased shares) (if any).

1. d) When an enterprise uses surplus capital, development investment fund, undistributed profit after tax, and other funds belonging to equity to repurchase shares in accordance with the provisions of law:

+ When buying back shares:

Debit account 419 – Own repurchased shares

Credit account 112 – Demand deposits.

+ At the same time, reduce the source of capital surplus, development investment fund, undistributed profit after tax, other funds belonging to equity

Debit accounts 414, 4112, 421, 418

Credit account 419 – Own repurchased shares.

 

ACCOUNT 421 – UNDISTRIBUTED PROFIT AFTER TAX

1. Accounting principles
2. a) This account is used to reflect business results (profit, loss) after corporate income tax and the situation of profit distribution or loss handling of the enterprise (if any) according to the provisions of law.
3. b) The division of business profits of an enterprise must be clear, distinct and in accordance with current financial mechanisms or relevant legal regulations.
4. c) Must account in detail for business performance results of each fiscal year (previous year, current year), and at the same time monitor in detail each content of profit distribution of the enterprise (fund provision, additional investment capital of owners, dividend distribution, profit to shareholders, to investors).
5. d) When applying retroactively due to changes in accounting policies and retroactively adjusting material errors of previous years but only discovered this year, leading to the need to adjust the opening balance of the undistributed profit after tax, the enterprise must increase or decrease the opening balance of account 4211 – Undistributed profit after tax of the previous year in the accounting books and increase or decrease the “Undistributed profit after tax” indicator on the Financial Position Statement according to the provisions of Vietnamese Accounting Standard No. 29 – Changes in accounting policies, accounting estimates and errors and Vietnamese Accounting Standard No. 17 – Corporate income tax.
6. d) When distributing profits, enterprises need to consider non-cash items in undistributed profits after tax that may affect the cash flow and ability to pay dividends and profits of the enterprise, such as:

– Profit from revaluation of assets contributed as capital; from revaluation of foreign currency items; from revaluation of financial instruments;

– Other non-monetary items…

1. e) For preferred dividends payable: Enterprises must classify preferred dividends payable according to the nature of preferred shares and ensure the following principles:

– If preferred shares are classified as liabilities, the enterprise does not record dividends payable on preferred shares from undistributed earnings;

– If preferred stock is classified as equity, preferred dividends payable are accounted for similarly to dividends on common stock.

1. g) Enterprises must monitor in the internal management system the number of taxable and non-taxable losses, including:

– Tax loss is the loss created by deductible expenses when determining taxable income;

– Non-taxable loss is the loss created by expenses that are not deductible when determining taxable income.

When transferring losses according to tax law provisions, enterprises are only allowed to transfer the taxable loss portion as a basis for reducing future tax payable.

2. Structure and content of Account 421 – Undistributed profit after tax

Debit:

– Losses from business operations of the enterprise;

– Provision of enterprise funds;

– Dividends and profits to owners in cash;

– Use undistributed after-tax profits to pay stock dividends or supplement owners’ investment capital;

Creditor:

– Actual undistributed profit after tax of the enterprise’s business activities during the period;

– The number of losses of the subordinate level compensated by the superior level (if any);

Account 421 can have a debit balance or a credit balance.

Debit Balance:

Unresolved operating losses at the end of the accounting period.

Credit Balance:

Undistributed or unused profit after tax at the end of the accounting period.

Account 421 – Undistributed profit after tax, has 2 sub-accounts:

– Account 4211 – Accumulated undistributed profit after tax up to the end of the previous year: Reflects the business performance, profit distribution or loss handling of previous years. Account 4211 is also used to reflect the increase or decrease in the opening balance of Account 4211 when retroactively applied due to changes in accounting policies and retroactively adjusting material errors of the previous year, newly discovered this year.

At the beginning of the following year, the accountant transfers the beginning balance from account 4212 – Undistributed profit after tax of this year to account 4211 – Undistributed profit after tax accumulated to the end of the previous year.

– Account 4212 – Undistributed profit after tax this year: Reflects business results, profit distribution and loss handling of this year.

3. Accounting methods for some major economic transactions
4. a) At the end of the accounting period, transfer of business performance results:

– In case of profit, record:

Debit account 911 – Determining business results

Credit account 421 – Undistributed profit after tax (4212).

– In case of loss, record:

Debit account 421 – Undistributed profit after tax (4212)

Credit account 911 – Determine business results.

1. b) At the time when the enterprise does not have the right to refuse the obligation to pay dividends and profits in cash to shareholders and capital contributors of the company according to the provisions of law, record:

Debit account 421 – Undistributed profit after tax

Credit account 332 – Dividends and profits payable.

When paying dividends and profits in cash, record:

Debit account 332 – Dividends and profits payable

There are accounts 111, 112,… (actual amount paid).

1. c) In case a joint stock company uses undistributed after-tax profits to pay dividends in shares, record:

– At the time the enterprise issues shares to pay dividends, record:

Debit account 421 – Undistributed profit after tax

Credit account 4118 – Other capital.

– When the enterprise is granted a Certificate of Business Registration, record:

Debit account 4118 – Other capital

Credit account 4111 – Owner’s equity.

1. d) Enterprises that are not joint stock companies use undistributed after-tax profits to increase or supplement charter capital. At the time the enterprise decides to use undistributed after-tax profits to increase or supplement charter capital, record:

– At the time the enterprise issues shares to pay dividends, record:

Debit account 421 – Undistributed profit after tax

Credit account 4118 – Other capital.

– When the enterprise is granted a Certificate of Business Registration, record:

Debit account 4118 – Other capital

Credit account 4111 – Owner’s equity.

1. d) When an enterprise allocates funds from profits after corporate income tax according to regulations, record:

Debit account 421 – Undistributed profit after tax

There are accounts 414, 418, 353,…

1. e) At the beginning of the accounting period, transfer the undistributed profit after tax of this year to the undistributed profit after tax of the previous year, record:

– In case account 4212 has a credit balance (profit), record:

Debit account 4212 – Undistributed profit after tax this year

Credit account 4211 – Undistributed profit after tax of previous year.

– In case account 4212 has a debit balance (loss), record:

Debit account 4211 – Undistributed profit after tax of previous year

Credit account 4212 – Undistributed profit after tax this year.

 

PRINCIPLES OF ACCOUNTING FOR REVENUE

1. Revenue is the economic benefit obtained that increases the enterprise’s equity except for the additional contribution of shareholders. Revenue is recorded at the time the transaction occurs, when it is certain that economic benefits will be obtained, determined by the fair value of the amounts entitled to be received, regardless of whether the money has been received or will be received.
2. Revenue and expenses related to the generation of that revenue (including expenses of the period in which the revenue is generated and expenses of previous periods or expenses payable but related to the revenue of that period) must be recorded simultaneously according to the matching principle. However, in some cases, the matching principle may conflict with the principle of prudence in accounting, so enterprises must base on the nature and Vietnamese Accounting Standards and the provisions of this Circular to reflect transactions honestly and reasonably.

– An economic contract can include many transactions, enterprises must identify the transactions to apply the conditions for revenue recognition in accordance with regulations.

– Revenue must be recorded in accordance with the nature rather than the form or name of the transaction and must be allocated according to the obligation to supply goods and services. For example, customers only receive promotional goods when purchasing goods and services of the unit (such as buying 2 products and getting one more product free), the nature of the transaction is to reduce the price of goods sold, products, give them away for free to customers. In form, it is called a promotion but in essence, it is a sale because customers will not receive it if they do not buy the product or service. In this case, the value of the product or service given to customers is reflected in the cost price and the revenue corresponding to the reasonable value of that product or service must be recorded. Enterprises must allocate the transaction price for both products and services sold and free products and services based on the individual selling price of each type of product or service as the basis for determining the revenue of each product; the value of free products is reflected in the cost of goods sold. However, this principle can be an exception in the case where a business gives away free goods or services to customers and, according to the characteristics of the business model, the selling price of the main goods or services of the business does not change regardless of whether the customer receives the free goods or services. The business records the value of the free goods or services to the customer in the business’s cost of sales, similar to the case of promotions without conditions.

– For transactions that give rise to present and future obligations of the enterprise, revenue must be allocated according to the fair value of each obligation performed and recognized when the obligation has been performed.

3. Revenue, profit or loss is considered unrealized only if the enterprise still has the responsibility to perform future obligations (except for normal warranty obligations) or it is not certain that it will receive economic benefits; The classification of profits and losses as realized or unrealized does not depend on whether cash flows have arisen or not.

Gains and losses arising from revaluation of assets and liabilities are not considered unrealized because at the time of revaluation, the entity already has rights to the assets and has current debt obligations for the liabilities, for example: Gains and losses arising from revaluation of assets contributed as capital for investment in other entities, exchange rate differences due to revaluation of foreign currency-based monetary items, etc. are all considered realized.

4. Revenue does not include amounts collected on behalf of third parties, for example:

– Indirect taxes (VAT, export tax,…) must be paid;

– Surcharges and additional fees outside the selling price that the business is not entitled to;

– The amount of money the agent collects on behalf of the owner;

– Other cases such as amounts that the enterprise has collected from customers but the customers do not use them to pay for the enterprise’s goods and services but use them to pay other partners for amounts such as: humanitarian support, payment for goods and services provided by third parties,… according to the provisions of law.

In case the indirect taxes payable cannot be separated immediately at the time of revenue generation, for accounting convenience, the enterprise can record revenue in the accounting books including indirect taxes, but the enterprise must periodically reduce revenue for the indirect taxes payable. However, when preparing the Financial Statement, the enterprise must determine and exclude all indirect taxes payable from the indicators reflecting sales revenue and service provision on the Business Performance Report.

5. The timing and basis for recording accounting revenue and taxable revenue may vary depending on each specific situation. Taxable revenue is only used to determine the amount of tax payable according to law; Revenue recorded in accounting books to prepare Financial Statements must comply with accounting principles and, depending on each case, does not necessarily have to be equal to the amount recorded on the sales invoice.
6. When transferring products, goods, and services between the enterprise’s affiliated units, depending on the operational characteristics and management hierarchy of each unit, the enterprise can decide to record revenue at the affiliated units without depending on the accompanying documents (invoices or internal documents). When preparing the Consolidated Financial Statements, all revenue between affiliated units must be excluded.
7. Revenue recorded only includes revenue of the reporting period. At the end of the accounting period, the enterprise must transfer revenue to determine the business results of the period. The accounts reflecting revenue have no balance.

 

ACCOUNT 511 – SALES AND SERVICE REVENUE

1. Accounting principles

1.1. This account is used to reflect the business’s sales and service revenue in an accounting period, including:

1. a) Sales revenue (including sales of goods, products, investment real estate, sale of rights to receive goods, use services of other units,…);
2. b) Revenue from providing services (including asset leasing services);
3. c) State subsidies and subsidies for enterprises according to the provisions of law;
4. d) Other revenue.

1.2. Conditions for revenue recognition

1. a) Enterprises only record sales revenue when they simultaneously satisfy the following conditions:

– The enterprise has transferred most of the risks and benefits associated with ownership of the products and goods to the buyer;

– The enterprise no longer holds the right to manage the goods as the owner or the right to control the goods;

– Revenue is determined relatively reliably;

– The enterprise has or will gain economic benefits from the sales transaction;

– Identify the costs associated with sales transactions.

1. b) Enterprises only record service revenue when they simultaneously satisfy the following conditions:

– Revenue is determined with relative certainty. When the contract stipulates that the buyer has the right to return the purchased service under specific conditions, the enterprise shall only recognize revenue when those specific conditions no longer exist and the buyer has no right to return the service provided;

– The enterprise has or will gain economic benefits from the transaction of providing that service;

– Identify the work completed at the time of reporting;

– Identify the costs incurred for the transaction and the costs to complete the transaction to provide that service.

1.3. In case an economic contract includes many transactions, the enterprise must identify the transactions to record revenue in accordance with Vietnamese Accounting Standards, for example:

– In case a business sells goods with an obligation to provide after-sales services (in addition to the usual warranty terms), the business must separately record sales revenue and service revenue;

– In case the contract stipulates that the seller is responsible for installing products and goods for the buyer, revenue is only recognized after the installation is completed;

– In case the enterprise is obliged to provide the buyer with free goods and services or discounts in transactions for traditional customers: the enterprise shall base on the nature of the contract and the commitment of the enterprise with the customer to see whether the enterprise participates in the provision of goods and services (the unit is the direct provider of goods and services) or is only an intermediary arrangement unit (the unit is an agent or acts as the seller of the right to use the service, which is provided to the customer by another unit responsible for providing the service, controlling the price and quality) to determine the time of completion of the provision of goods and services as the basis for recording revenue corresponding to the goods and services provided free of charge to the buyer.

In case the enterprise is the entity providing goods and services to customers, if the enterprise has the right to control the specific goods and services before transferring those goods and services to customers. However, the enterprise may not necessarily have to control a specific good or service if the enterprise has legal ownership or right to use those goods and services for only a short period of time before transferring ownership or right to use to customers.

In case the enterprise acts as an agent if the enterprise’s performance obligation is to arrange and organize for a third party to provide specific goods or services. The enterprise being an agent will not control any of the factors of selling price, quality, etc. of the specific goods or services provided to customers. In this case, the enterprise’s sales and service revenue is the commission or the amount the enterprise receives through arranging and organizing for the third party to provide those goods or services directly to customers.

1.4. Net sales and service revenue that an enterprise makes during the accounting period may be lower than the initially recorded sales and service revenue due to trade discounts, sales discounts for customers or returned goods (due to failure to meet the specifications, quality, etc. stated in the economic contract).

In case products, goods, and services have been consumed in previous periods, and in the following period must be discounted, reduced in price, or returned, the enterprise is allowed to record a reduction in revenue according to the following principles:

– If products, goods, and services have been consumed in previous periods, and must be discounted, discounted, or returned in the next period but occur before the issuance of the Financial Statement, the enterprise must consider this an event occurring after the end of the accounting period that requires adjustment and reduction of revenue on the Financial Statement of the reporting period.

– If products, goods, and services have been consumed in previous periods and must be discounted, have trade discounts, or be returned in the next period after the issuance of the Financial Statement, the enterprise shall record a reduction in revenue for the period in which it occurs.

1.5. Revenue in some cases is determined as follows:

1.5.1. Sales revenue and service provision revenue do not include indirect taxes payable, such as VAT (including cases of VAT payment by direct method), special consumption tax, export tax, environmental protection tax, etc.

In case the indirect tax payable cannot be separated immediately at the time of revenue recognition, the enterprise shall record revenue including the tax payable and periodically record a reduction in revenue for the indirect tax payable. When preparing the business performance report, the indicators “Sales and service revenue” and “Revenue deductions” do not include the indirect tax payable in the period because, in essence, indirect taxes are not considered a part of revenue.

1.5.2. In case the enterprise has collected money during the period but by the end of the period has not delivered goods or provided services to customers, it is not considered to have sold goods or provided services during the period and is not recorded in Account 511 – Sales and service revenue but only recorded in the credit side of Account 131 – Accounts receivable from customers for the amount collected from customers. When actually delivering goods or providing services to the buyer, the value of delivered goods and provided services will be recorded in Account 511 – Sales and service revenue for the value of delivered goods and provided services in accordance with the conditions for revenue recognition.

1.5.3. In case an enterprise uses goods and services for promotions or discounts for customers, it must base on the nature of the transaction to account for promotional and discounted goods and services appropriately according to the following principles:

1. a) In case a customer receives a promotion or discount without the condition of participating in any contract to purchase goods or services of the enterprise, the enterprise records the value of the product given to the customer in the enterprise’s cost of sales.
2. b) In case customers are only entitled to receive promotions and discounts when they have purchased goods and services from the enterprise or are participating in a contract to purchase goods and services from the enterprise, the enterprise must allocate the amount of money collected to calculate revenue for both goods and services sold and goods and services on promotion and discounts, and the value of free products and goods is reflected in the cost of goods sold. However, the enterprise shall base on the nature of the committed goods and services; business methods and practices; and the list of goods and services of the enterprise to account appropriately.

1.5.4. In case an enterprise has sales revenue and service provision in foreign currency, it must convert the foreign currency into the accounting currency at the actual transaction exchange rate at the time of the economic transaction. In case of receiving advance payment from customers in foreign currency, the revenue corresponding to the advance payment is converted into the accounting currency at the actual transaction exchange rate at the time of receiving the advance payment.

1.5.5. Real estate sales revenue of the enterprise as investor must be implemented according to the following principles:

1. a) For projects and construction items in which the enterprise is the investor (including projects and construction items in which the enterprise is both the investor and the contractor), the enterprise is not allowed to record revenue from real estate sales according to the Construction Contract Accounting Standards and is not allowed to record revenue from the amount collected in advance from customers according to progress. The recognition of revenue from real estate sales must ensure that the following 5 conditions are simultaneously satisfied:

– The real estate has been fully completed and handed over to the buyer, the enterprise has transferred the risks and benefits associated with the ownership of the real estate to the buyer;

– The enterprise no longer holds the right to manage the real estate as the real estate owner or the right to control the real estate;

– Revenue is determined relatively reliably;

– The enterprise has obtained or will obtain economic benefits from the real estate sale transaction;

– Identify the costs associated with real estate transactions.

1. b) For projects and construction items in which the enterprise is the investor (including projects and construction items in which the enterprise is both the investor and the contractor), in case the customer has the right to complete the interior of the real estate and the enterprise completes the interior of the real estate according to the design, model and requirements of the customer, the enterprise shall record revenue upon completion and handover of the rough construction to the customer. In this case, the enterprise must have a separate contract for completing the interior of the real estate with the customer, clearly stating the customer’s requirements on design, technique, model, form of completing the interior of the real estate and the minutes of handover of the rough construction to the customer.
2. c) For real estate plots for sale, if the land has been transferred to the customer (regardless of whether the legal procedures for the land use right certificate have been completed or not) and the contract is not cancelled, the investor is allowed to record revenue for the sold land when all of the following conditions are simultaneously satisfied:

– Has transferred the risks and benefits associated with the land use rights to the buyer;

– Revenue is determined relatively reliably;

– Determine the costs related to land sale transactions;

– The enterprise has obtained or will certainly obtain economic benefits from the land sale transaction.

1. d) For projects that are tourist apartments, office apartments combined with accommodation or similar products according to the provisions of current laws on real estate business: Enterprises shall base on the nature of the terms in the contract on the term, rights and obligations of the parties in the contract for the sale of tourist apartments, office apartments combined with accommodation or similar products; relevant Vietnamese Accounting Standards and the enterprise accounting regime to determine each sale component, lease component, financial component (if any),… related to that contract to apply the most appropriate accounting policy with the characteristics and nature of the transaction to serve as the basis for recording revenue corresponding to each component. At the same time, enterprises must explain in the Financial Statements the accounting policy, the nature of the contract (rights and obligations of the parties) and the accounting method that the enterprise considers most appropriate.

1.5.6. For enterprises providing import-export entrustment services, revenue is the import-export entrustment fee that the enterprise receives.

1.5.7. For units receiving processing of materials and goods, revenue is the actual processing amount received, excluding the value of materials and goods received for processing.

1.5.8. In case of sales by installment payment, revenue is determined based on the cash price.

1.5.9. For construction investment management activities

– For enterprises assigned to manage investment and construction projects using State budget capital or Government bond capital, local bonds, in case of making project management cost estimates according to State regulations on investment and construction using State budget capital, the project management cost paid by the State budget shall not be accounted for as revenue and expenses of the enterprise but shall be accounted for as collection and payment on behalf of others.

– For enterprises performing project management tasks under consulting contracts, the amount collected under the contract is recorded as service revenue. In the case of a project enterprise that is essentially only a representative of investors to perform project management work according to the provisions of the contract, pay for construction, consulting, site clearance contracts, etc. for contractors and collect investment costs for construction of works and project items to settle all costs as well as hand over completed works and project items to investors, the project enterprise is not allowed to record the project funds received from investors or from loans as revenue of the enterprise but must record it as another payable or payable amount (collection on behalf – payment on behalf).

1.5.10. Principles for recognizing revenue for transactions of selling goods and providing services under programs for traditional customers

1. a) Characteristics of transactions selling goods and providing services under programs for traditional customers: Transactions under programs for traditional customers must simultaneously satisfy all of the following conditions:

– When purchasing goods and services, customers accumulate bonus points so that when they reach the required number of points, they will receive a quantity of free goods and services or receive a discount;

– The seller must determine the reasonable value of the goods and services that will be provided for free or the amount of money that will be discounted or reduced for the buyer when the buyer meets the program conditions (accumulates enough reward points);

– The program must have a specific and clear time limit. If after the deadline specified by the program the customer has not met the set conditions, the seller will no longer be obliged to provide free goods or services or discounts to the buyer (the buyer’s accumulated bonus points will have no more value);

– After receiving free or discounted goods or services, the buyer’s accumulated points will be deducted according to the program’s regulations (exchange accumulated points for goods, services or discounted amounts when purchasing);

– Providing free or discounted goods and services to buyers who have achieved enough reward points can be done by the seller himself or a third party according to the program’s regulations.

1. b) Accounting principles

– At the time of selling goods or providing services, the seller must separately determine the fair value of the goods or services to be provided free of charge or the amount of discount or rebate to be given to the buyer when the buyer meets the conditions specified in the program.

– Revenue is recorded as the total amount receivable or collected minus the fair value of goods and services to be provided free of charge or the amount to be discounted or reduced for buyers. The value of goods and services to be provided free of charge or the amount to be discounted or reduced for buyers is only recorded as revenue awaiting allocation. If the program expires and the buyer does not meet the prescribed conditions and is not entitled to free goods and services, the above revenue awaiting allocation is transferred to sales revenue and service provision.

– When the buyer meets the conditions as prescribed by the program, the processing of the pending revenue is carried out as follows:

+ In case the seller directly provides goods and services free of charge or at a discount to the buyer: The revenue awaiting allocation corresponding to the fair value of the goods and services provided free of charge or at a discount to the buyer is recorded as sales revenue or service provision at the time the buyer has received the goods, has been provided with free services or has received a discount according to the program’s regulations.

+ In case a third party is obliged to provide goods or services free of charge or at a discount to the buyer: If the contract between the seller and the third party is not of the nature of an agency contract, when the third party provides goods, services, or at a discount, the revenue awaiting allocation is transferred to sales revenue or service provision. If the contract is of an agency nature, only the difference between the revenue awaiting allocation and the amount payable to the third party is recorded as revenue. The amount paid to the third party is considered as payment of a debt payable.

+ In case there is a difference between the estimated amount payable to traditional customers and the actual amount incurred, at the end of the accounting period, the enterprise will adjust the increase or decrease in sales revenue and service provision during the period.

1.5.11. Principles for recognizing and determining revenue of construction contracts

1. a) Construction contract revenue includes:

– Initial revenue is recorded in the contract;

– Increases and decreases in contract performance, bonuses and other payments if these amounts are likely to change revenue and can be reliably determined:

+ Contract revenue may increase or decrease from period to period, for example: The contractor and the customer may agree on changes and requirements that increase or decrease contract revenue in the next period compared to the first approved contract; Revenue agreed in a fixed price contract may increase due to price increases; Contract revenue may decrease due to the contractor’s failure to meet the schedule or ensure the construction quality as agreed in the contract; When a fixed price contract stipulates a fixed price for a completed unit of product, contract revenue will increase or decrease as the volume of product increases or decreases.

+ Bonuses are additional amounts paid to the contractor if the contractor performs the contract according to or exceeding the requirements. Bonuses are included in the revenue of the construction contract when two conditions are met: (i) Certain specific standards stated in the contract are met or exceeded; (ii) Bonuses are reliably determined.

– Other payments received by the contractor from the customer or another party to compensate for costs not included in the contract price. For example: Delays caused by the customer; Errors in technical or design specifications and disputes over changes in contract performance. The determination of additional revenue from such payments is subject to many uncertain factors and often depends on the outcome of many negotiations. Therefore, other payments are included in construction contract revenue only when:

+ The negotiations have resulted in the customer accepting compensation;

+ Other payments are approved by the customer and can be reliably determined.

1. b) Record revenue from construction contracts in one of the following two cases:

– In case the construction contract stipulates that the contractor is paid according to the planned progress, when the results of the construction contract performance can be reliably estimated, the revenue of the construction contract is recorded corresponding to the completed work portion determined by the contractor at the end of the accounting period, regardless of whether the invoice for payment according to the planned progress has been prepared or not and the amount recorded on the invoice;

– In case the construction contract stipulates that the contractor is paid according to the actual volume value, when the construction contract performance results are reliably determined and confirmed by the customer, the revenue and expenses related to the contract are recorded corresponding to the completed work confirmed by the customer in the period reflected on the issued invoice.

1. c) When the outcome of a construction contract cannot be estimated reliably:

– Revenue is only recognized to the extent of contract costs incurred for which reimbursement is relatively certain;

– Contract costs are only recognized as expenses in the period when these costs have been incurred.

1.5.12. In the case of leasing assets with pre-receipt of rental payments for multiple periods, revenue recognition is carried out according to the principle of allocating the pre-received rental payment in accordance with the lease term. In the case of a contract with multiple components (sale, lease, etc.), the entity shall base on the contract terms related to the term and conditions of lease to record revenue corresponding to each component. At the same time, the enterprise must monitor and explain in the Notes to the financial statements the term, characteristics and value as the basis for determining and recording revenue corresponding to each component.

1.5.13. For enterprises performing the task of providing products, goods and services subsidized by the State according to regulations, the subsidy revenue is the subsidy amount received.

1.5.14. In case of selling products, goods with replacement products, goods, equipment (prevention in case of product, goods being damaged), the enterprise must allocate revenue to the products, goods sold and the products, goods, equipment delivered to customers for replacement to prevent damage. The value of the replacement products, goods, equipment is recorded in the cost of goods sold.

1.5.15. Do not record sales and service revenue for:

– Value of goods, materials, and semi-finished products delivered to outside parties for processing;

– Value of goods sent for sale by consignment or agent (not yet determined as sold);

– Amount received from selling trial products;

– Financial revenue;

– Other income.

2. Structure and content of Account 511 – Sales revenue and service provision

Debit:

– Indirect taxes payable (VAT, special consumption tax, export…);

– Revenue from returned goods transferred at the end of the period;

– Sales discount carried forward at the end of the period;

– Trade discounts carried forward at the end of the period;

– Transfer net revenue to Account 911 – Determine business results.

Credit: Revenue from sales of products, goods, investment real estate and provision of services of the enterprise during the accounting period.

Account 511 has no ending balance.

Enterprises can open additional detailed accounts for revenue arising from contracts with customers (for example, revenue from sales of goods, products, provision of services, sales of investment real estate, sale of rights to receive goods, rights to use services, etc.) to suit the characteristics of production and business activities and management requirements of their unit.

3. Accounting methods for some major economic transactions

3.1. Revenue from goods and services determined as sold during the accounting period:

Debit accounts 111, 112, 131,… (total payment amount)

Credit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and amounts payable to the State (if any).

In case indirect taxes payable cannot be immediately separated, the enterprise records revenue including taxes payable. Periodically, the enterprise determines tax obligations payable and reduces revenue, recording:

Debit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and amounts payable to the State.

3.2. For transactions involving dissimilar goods:

When exporting products or goods in exchange for dissimilar materials, goods, or fixed assets, accounting reflects sales revenue and service provision in exchange for other materials, goods, or fixed assets at the fair value of the assets received after adjusting for additional receipts or payments. In case the fair value of the assets received cannot be determined, revenue is determined at the fair value of the assets exchanged.

– When recording revenue, record:

Debit account 131 – Accounts receivable from customers (total payment amount)

Credit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and amounts payable to the State (if any).

At the same time, record the cost of goods exchanged, record:

Debit account 632 – Cost of goods sold

There are accounts 155, 156,…

– When receiving materials, goods, and fixed assets due to exchange, the enterprise reflects the value of materials, goods, and fixed assets received due to exchange, recording:

Debit accounts 152, 153, 156, 211,…

Debit account 133 – Deductible VAT (if any)

Credit account 131 – Accounts receivable from customers (total payment amount).

– In case additional money is collected because the fair value of the products and goods exchanged is greater than the fair value of the materials, goods and fixed assets received from the exchange, when receiving money from the party with the exchanged materials, goods and fixed assets, record:

Debit accounts 111, 112 (additional amount collected)

Credit account 131 – Accounts receivable from customers.

– In case additional money must be paid because the fair value of the exchanged products and goods is less than the fair value of the materials, goods, and fixed assets received from the exchange, when paying the party with the exchanged materials, goods, and fixed assets, record:

Debit account 131 – Accounts receivable from customers

There are accounts 111, 112, …

3.3. When selling goods by installment payment:

– When selling goods on credit or installments, the enterprise reflects sales revenue at the cash price, recording:

Debit account 131 – Accounts receivable from customers

Credit account 511 – Sales revenue and service provision (cash on delivery)

Credit account 333 – Taxes and amounts payable to the State (if any).

– Periodically, record revenue from deferred and installment sales interest during the period, record:

Debit account 131 – Accounts receivable from customers

Credit account 515 – Financial activity revenue (deferred interest, installment payment).

– When receiving money including principal and interest paid in installments, record:

Debit accounts 111, 112, …

Credit account 131 – Accounts receivable from customers.

3.4. In case of selling goods and services with accompanying goods and services and the nature of the transaction is that the enterprise must allocate the transaction price for both the main goods and services and the accompanying goods and services:

1. a) Reflecting cost of goods sold including value of goods and services sold and value of accompanying goods and services, record:

Debit account 632 – Cost of goods sold

There are accounts 153, 155, 156, …

1. b) Record revenue from sales of goods and provision of services (including revenue from sales of main goods and services and revenue from sales of complimentary goods and services), record:

Debit accounts 111, 112, 131

Credit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and amounts payable to the State (if any).

3.5. Revenue generated from programs for traditional customers

1. a) When selling goods or providing services in a program for traditional customers, the enterprise records revenue based on the total amount collected minus (-) the unrealized revenue, which is the estimated fair value of the goods or services to be provided free of charge or the amount of discounts or rebates for customers:

Debit accounts 111, 112, 131

Credit account 511 – Sales revenue and service provision

Credit account 3387 – Revenue awaiting allocation

Credit account 333 – Taxes and amounts payable to the State (if any).

1. b) When the program’s specified period expires , if the customer does not meet the conditions to enjoy incentives such as receiving free goods or services or discounts, the enterprise does not incur an obligation to pay the customer. The enterprise transfers unrealized revenue to sales revenue and service provision, recording:

Debit account 3387 – Revenue awaiting allocation

Credit account 511 – Sales revenue and service provision.

1. c) When customers meet all program conditions to enjoy incentives, unrealized revenue is handled as follows:

– In case the enterprise is the direct entity providing free or discounted goods and services to customers, the unrealized revenue is transferred to be recorded as sales revenue and service provision at the time of completing the obligation to the customer (free or discounted goods and services have been transferred to the customer):

Debit account 3387 – Revenue awaiting allocation

Credit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and amounts payable to the State (if any).

Also reflects cost of goods sold, record:

Debit account 632 – Cost of goods sold

There are accounts 154, 155, 156,…

– In case the third party is the supplier of goods, services or discounts to customers, record:

Debit account 3387 – Revenue awaiting allocation

Credit account 511 – Sales and service revenue (the difference between unrealized revenue and the amount paid to third parties is considered as agent commission revenue)

Credit account 333 – Taxes and amounts payable to the State (if any)

There are accounts 111, 112, 331, … (Amounts payable to third parties).

1. d) At the end of the accounting period, if the estimated value of the liability is different from the amount paid to the third party:

+ Larger difference:

Debit account 511 – Sales revenue and service provision

Credit account 3387 – Revenue awaiting allocation.

+ Smaller difference:

Debit account 3387 – Revenue awaiting allocation

Credit account 511 – Sales revenue and service provision.

3.6. When service revenue arises for each period, based on related documents, record:

Debit accounts 111, 112, 131,…

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (if any).

3.7. In case of collecting money in advance for many periods from service provision activities:

– When receiving money from customers prepaid for many periods, record:

Debit accounts 111, 112 (total amount received in advance)

Credit account 3387 – Revenue awaiting allocation

Credit account 3331 – VAT payable (if any).

– Periodically, calculate and transfer revenue of the accounting period, record:

Debit account 3387 – Revenue awaiting allocation

Credit account 511 – Sales revenue and service provision…

– The amount to be returned to the customer because the contract is not continued or the implementation time is shorter than the time for which the payment was collected in advance (if any), record:

Debit account 3387 – Revenue awaiting allocation

Debit account 3331 – VAT payable (amount returned to the lessee for VAT of service provision activities not performed) (if any)

There are accounts 111, 112,… (total amount returned).

3.8. In case of sale through an agent, the enterprise still has the right to control the goods delivered to the agent.

1. a) Accounting at the delivery agent unit:

– When delivering products and goods to agents, a Warehouse Delivery Note for Goods Consigned for Sale to Agents must be prepared. Based on the Warehouse Delivery Note for Goods Consigned for Sale to Agents, record:

Debit account 157 – Goods sent for sale

There are accounts 155, 156,…

– When the goods delivered to the agent have been sold, based on the Sales Invoice List of the sold goods prepared and sent by the agent recipients to the enterprise to reflect the sales revenue, record:

Debit accounts 111, 112, 131,… (total payment amount)

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (33311) (if any).

At the same time, reflect the cost of goods sold, record:

Debit account 632 – Cost of goods sold

Credit account 157 – Goods sent for sale.

– Commission amount payable to the sales agent, record:

Debit account 641 – Sales expenses

Debit account 133 – Deductible VAT (1331) (if any)

There are accounts 111, 112, 131,…

1. b) Accounting at the agency receiving unit:

– When receiving agent goods, the enterprise proactively opens a tracking book and records information on the entire value of goods received for sale by the agent, reflecting it in the assets held for safekeeping and explaining it in the Financial Statement.

– When the goods received for sale by the agent have been sold, based on the VAT Invoice or Sales Invoice and related documents, the enterprise reflects the amount of sales that the agent must pay to the delivery party, recording:

Debit accounts 111, 112, 131,…

Credit account 331 – Payable to sellers (total payment price).

– Periodically, when determining the sales commission revenue that agents receive, record:

Debit account 331 – Payable to sellers

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (if any).

– When paying the agent sales fee to the delivery party, record:

Debit account 331 – Payable to sellers

There are accounts 111 and 112.

3.9. For products, goods and services sold between affiliated units within the enterprise

3.9.1. In case revenue is not recorded between stages within the enterprise, revenue is only recorded when actual sales are made to outside parties:

1. a) Accounting at the sales unit

– When exporting products, goods and services to affiliated units within the enterprise, create an internal warehouse delivery and transportation note or VAT invoice, recording:

Debit account 136 – Internal receivables (cost price)

There are accounts 155, 156,…

Credit account 333 – Taxes and amounts payable to the State (if any).

– Upon receiving notification from the purchasing unit that the products and goods have been sold, the selling unit records revenue and cost of goods:

+ Reflecting cost of goods sold, record:

Debit account 632 – Cost of goods sold

Credit account 136 – Internal receivables.

+ Reflecting revenue, record:

Debit account 136 – Internal receivables

Credit account 511 – Sales revenue and service provision.

1. b) Accounting at the purchasing unit

– When receiving products, goods and services delivered by a affiliated unit within the enterprise, the enterprise shall, based on relevant documents, record:

Debit accounts 155, 156,… (cost price)

Debit account 133 – Deductible VAT (if any)

Credit account 336 – Internal payables.

– When selling products, goods and services to outside parties, businesses record revenue and cost of goods sold as normal sales transactions.

– In case the affiliated unit is not assigned to account for after-tax business results, the enterprise must transfer revenue and cost of goods sold to the superior unit:

+ Transfer cost price, record:

Debit account 336 – Internal payables

Credit account 632 – Cost of goods sold.

+ Transfer revenue, record:

Debit account 511 – Sales revenue and service provision

Credit account 336 – Internal payables.

3.9.2. In case of recording sales revenue between stages within the enterprise:

– Seller writes:

Debit account 136 – Internal receivables

Credit account 511 – Sales revenue and service provision (details of internal sales transactions)

Credit account 333 – Taxes and amounts payable to the State (if any).

– Buyer writes:

Debit accounts 155, 156,…

Debit account 133 – Deductible VAT (if any).

Credit account 336 – Internal payables.

– At the end of the accounting period, based on the Debt Reconciliation Minutes between internal receivables and payables of the same entity, the enterprise offsets on the corresponding accounting books, recording:

Debit account 336 – Internal payables (3368)

Credit account 136 – Internal receivables (1368).

3.10. For goods processing activities:

1. a) Accounting at the delivery unit for processing:

– When delivering goods from warehouse for processing, record:

Debit account 154 – Cost of production and unfinished business

There are accounts 152, 156,…

– Record the cost of processing goods and deductible VAT:

Debit account 154 – Cost of production and unfinished business

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331,…

– When receiving finished processed goods back into the warehouse, record:

Debit accounts 152, 156,…

Credit account 154 – Cost of production and business in progress.

1. b) Accounting at the unit receiving goods for processing:

– When receiving goods for processing, the enterprise proactively monitors and records information on the entire value of materials and goods received for processing into materials, goods, fixed assets received for safekeeping, consignment, processing and explains in the Financial Report.

– When determining revenue from the actual processing fee received, record:

Debit accounts 111, 112, 131,…

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (33311) (if any).

3.11. Accounting for construction contract revenue.

– In case the construction contract stipulates that the contractor is paid according to progress, when the results of the construction contract performance are reliably estimated, the accountant shall base on the documents reflecting the revenue corresponding to the completed work (not invoices) determined by the contractor at the time of preparing the Financial Statement, and record:

Debit account 337 – Payment according to construction contract progress

Credit account 511 – Sales revenue and service provision.

– Based on the VAT invoice prepared according to the progress to reflect the amount the customer must pay according to the progress recorded in the contract, record:

Debit account 131 – Accounts receivable from customers

Credit account 337 – Payment according to construction contract progress

Credit account 3331 – VAT payable (if any).

– When receiving money paid by customers, or receiving money advanced by customers, record:

Debit accounts 111, 112,…

Credit account 131 – Accounts receivable from customers.

– In case the construction contract stipulates that the contractor is paid according to the value of the performed volume, when the results of the construction contract performance are reliably determined and confirmed by the customer, the enterprise shall base on the invoice and record:

Debit accounts 111, 112, 131,…

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (if any).

– Bonus received from customers paying extra to contractors when performing contracts that meet or exceed certain specific targets stated in the contract, recorded:

Debit accounts 111, 112, 131,…

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (if any).

– Compensation received from customers or other parties to compensate for costs not included in the contract value (e.g., customer-caused delays; errors in technical or design specifications and disputes over changes in contract performance), recorded:

Debit accounts 111, 112, 131,…

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (if any).

– When receiving payment for completed work volume or advance payment from customers, record:

Debit accounts 111, 112,…

Credit account 131 – Accounts receivable from customers.

3.12. Accounting for revenue from State subsidies and subsidies for enterprises:

– Reflecting the allowance and subsidy received according to regulations, record:

Debit account 333 – Taxes and amounts payable to the State (3339)

Credit account 511 – Sales revenue and service provision.

– When receiving subsidies and subsidies from the State, record:

Debit accounts 111, 112,…

Credit account 333 – Taxes and amounts payable to the State (3339).

3.13. Accounting for sale and liquidation of investment real estate, see instructions in Account 217 – Investment real estate.

3.14. In case of paying employees with products and goods: Enterprises must record revenue for products and goods as for normal sales transactions, recording:

Debit account 334 – Payable to employees (total payment price)

Credit account 511 – Sales revenue and service provision

Credit account 333 – Taxes and amounts payable to the State (33311, 3335) (if any).

3.15. In case of using products and goods as gifts for employees covered by the reward and welfare fund: Enterprises must record revenue for products and goods as for normal sales transactions, recording:

Debit account 353 – Reward and welfare fund (total payment amount)

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (33311) (if any).

3.16. In case sales and service revenue arise in foreign currency: Determining actual transaction exchange rates, recorded exchange rates and transactions arising related to sales and service transactions arising in foreign currency is guided in Account 413 – Exchange rate differences.

3.17. At the end of the accounting period, transfer the revenue from returned goods, sales discounts and trade discounts arising during the period to the actual revenue of the period to determine net revenue, record:

Debit account 511 – Sales revenue and service provision

Credit account 521 – Revenue deductions.

3.18. At the end of the accounting period, transfer net revenue to

Account 911 – Determining business results, record:

Debit account 511 – Sales revenue and service provision

Credit account 911 – Determine business results.

 

ACCOUNT 515 – FINANCIAL ACTIVITIES REVENUE

1. Accounting principles
2. a) This account is used to reflect the revenue from interest, dividends, distributed profits and other financial activities of the enterprise, including:

– Interest: Loan interest; deposit interest; interest on sales on deferred payment or installment payments; interest on investments in bonds and treasury bills; payment discounts received from purchasing goods and services; the difference between the resale price and the purchase price of bonds under government bond purchase and resale contracts; the difference between the pre-maturity repurchase price of issued bonds lower than the book value of the bonds; accrued interest payable on bonds (if any) up to the time of bond repurchase…

– Dividends and profits distributed in cash or non-monetary assets for the period after the investment date (dividends and profits distributed in cash or non-monetary assets for the period before the investment date are recorded as a reduction in the original cost of the investment). The determination of accrued interest before the purchase date is estimated by the enterprise based on information of the investment, financial situation and business results of the investee;

– Income from investment activities of buying and selling short-term and long-term securities; Capital transfer profit when liquidating joint venture capital contributions, investments in associated companies, investments in subsidiaries, and other capital investments;

– Income from other investment activities;

– Exchange rate gains or gains arising from revaluation of foreign currency items, including gains from selling foreign currency;

– Other financial operating revenues.

1. b) For the sale of financial investments (investments in subsidiaries, joint ventures, associated companies; trading securities;…), revenue is recorded as the difference between the selling price and the cost price, in which the cost price is the book value of the investment. In case the assets received when selling investments are non-monetary assets, the selling price is calculated at fair value similar to the transaction of selling and exchanging those non-monetary assets.
2. c) For revenue from foreign currency buying and selling activities, revenue is recorded as the difference in profit between the foreign currency selling price and the foreign currency buying price.
3. d) For deposit interest: Deposit interest revenue reflected in this account does not include deposit interest arising from temporary investment activities of separate loan capital used only for the purpose of construction or production of unfinished assets (because it is deducted from borrowing costs incurred when capitalized).
4. d) For interest receivable from loans, deferred payment and installment sales: Revenue is only recorded when it is certain to be collected and the loan principal and principal receivable are not subject to provisions.
5. e) For interest received from stock and bond investments, only the interest portion of the periods corresponding to the period after the date the enterprise repurchases the investment is recorded in financial operating revenue in each period, and the interest portion received corresponding to the period before the enterprise repurchases the investment is recorded as a decrease in the original cost of the investment.
6. g) When an investor receives dividends in shares (on the last registration date or on the date on which the investor is entitled to receive dividends in shares) or when the investee uses other capital of the owner, equity funds and undistributed profits after tax to increase charter capital.

If the investor is a joint stock company, the investor only monitors the number of shares increased on the Financial Statements’ notes. If the investor is another type of enterprise, the investor only monitors the value of the capital increased on the Financial Statements’ notes. The financial revenue is not recorded, and the investment value in the investee is not recorded. Except for the case of state-owned enterprises, if there are regulations different from the principles prescribed in this Circular, they shall be implemented according to the provisions of law for state-owned enterprises.

2. Structure and content of Account 515 – Financial activity revenue

Debit:

– VAT payable calculated by direct method (if any);

– Transfer net financial revenue to account 911 – Determine business results.

Credit: Financial revenue arising during the period.

Account 515 has no ending balance.

3. Accounting methods for some major economic transactions
4. a) Reflects dividend revenue, profits distributed in cash or non-cash assets arising during the period from investments:

– In case the dividends and profits distributed include the accumulated investment interest before the enterprise repurchases the investment, the enterprise must allocate this dividend and profit to the period before and after the investment date, recording:

Debit account 138 – Other receivables (total dividends and profits to be received)

There are accounts 121, 221, 222, 228 (dividends and profits allocated for the period before the enterprise repurchases the investment)

Credit account 515 – Financial activity revenue (dividends and profits allocated to the period after the enterprise repurchases this investment).

– When receiving dividends, profits are divided in cash, record:

Debit accounts 111, 112,…

Credit account 138 – Other receivables (1388).

1. b) Periodically, when there is certain evidence of receiving interest on investments held to maturity, deferred interest, or installment interest, record:

Debit accounts 128, 131,…

Credit account 515 – Financial activity revenue.

Conclusive evidence of the collection of these receivables is documentation demonstrating:

– The principal receivables are not considered bad debts that are not recoverable or difficult to recover, and are not subject to debt freeze or debt extension;

– There is debt confirmation and debt repayment commitment from the debtor;

– Other evidence (if any).

1. c) When selling or withdrawing financial investments, record:

Debit accounts 111, 112, 131,…

Debit account 229 – Provision for asset losses (provision set aside to cover losses) (if any)

Debit account 635 – Financial expenses (if loss)

There are accounts 121, 221, 222, 228

Credit account 515 – Financial activity revenue (if profit).

The reversal of provisions made for investments may be recorded immediately for each transaction at the time of sale or when determining the amount of provisions for investment losses at the end of each accounting period, but must be consistent with the provisions of Vietnamese Accounting Standards.

1. d) In case of stock exchange, based on the fair value of the received shares and the book value of the exchanged shares, record:

Debit accounts 121, 228 (fair value of received shares)

Debit account 635 – Financial expenses (the difference between the fair value of the received shares is less than the book value of the shares exchanged)

There are accounts 121, 228 (book value of shares exchanged)

Credit account 515 – Financial activity revenue (the difference between the fair value of the received shares and the book value of the shares exchanged).

1. d) In case the enterprise sells goods by installment payment method

– When selling products and goods by installment payment, record sales revenue and service provision of the accounting period at the cash price, record:

Debit accounts 111, 112, 131,…

Credit account 511 – Sales revenue and service provision (at cash price)

Credit account 3331 – VAT payable (if any).

– Periodically, determine and transfer revenue from deferred and installment sales interest during the period, record:

Debit accounts 111, 112, 131,…

Credit account 515 – Financial activity revenue.

1. e) Periodically, determine and transfer interest revenue for investments held to maturity and receive interest in advance, record:

Debit account 128 – Investments held to maturity

Credit account 515 – Financial activity revenue.

1. g) In case of purchasing government bonds under a repurchase agreement (repo):

– When the buyer pays the seller the number of coupons that the buyer receives on behalf of the seller at the time(s) within the contract term, the seller records:

Debit accounts 111, 112, 138

Credit account 515 – Financial activity revenue.

– When allocating the difference between the resale price and the purchase price of government bonds under the government bond resale contract to periodic revenue in accordance with the contract period, the buyer records:

Debit account 171 – Government bond repurchase transactions

Credit account 515 – Financial activity revenue.

1. h) The amount of payment discount received due to payment for purchases before the deadline approved by the seller, recorded:

Debit account 331 – Payable to sellers

Credit account 515 – Financial activity revenue.

1. i) When receiving back capital contributions to subsidiaries, joint ventures, associates, or other investments where the fair value or agreed price as agreed by the parties to evaluate the divided assets is less than the value of capital contributions, record:

Debit accounts 111, 112, 152, 156, 211,… (fair value of divided assets)

Debit account 229 – Provision for asset losses (provision set aside to cover losses) (if any)

Credit account 515 – Financial activity revenue (profit)

There are accounts 221, 222,…

The reversal of provisions made for investments may be recorded immediately for each transaction at the time of recovery or when determining the amount of provisions for investment losses at the end of each accounting period but must be consistent with the provisions of Vietnamese Accounting Standards.

1. k) At the end of the accounting period, transfer financial revenue to determine business results, record:

Debit account 515 – Financial activity revenue

Credit account 911 – Determine business results.

 

ACCOUNT 521 – REVENUE DEDUCTIONS

1. Accounting principles
2. a) This account is used to reflect the amounts deducted from sales revenue and service provision arising during the period, including: trade discounts, sales discounts and sales returns. This account does not reflect taxes deducted from revenue such as output VAT payable calculated by the direct method.
3. b) The revenue reduction adjustment is made as follows:

– Trade discounts, sales discounts, and sales returns arising in the same period as the consumption of products, goods, and services are adjusted to reduce revenue of the period;

– In case products, goods and services have been consumed in previous periods, but trade discounts, sales discounts or returned goods arise in the following period, the enterprise shall record a reduction in revenue according to the following principles:

+ If products, goods, and services have been consumed in previous periods, and must be discounted, discounted, or returned in the next period but occur before the issuance of the Financial Statement, the accountant must consider this an event that requires adjustment occurring after the date of the Financial Statement and record a reduction in revenue on the Financial Statement of the reporting period (previous period).

+ In case products, goods, and services have been consumed in previous periods, and must be discounted, have trade discounts, or be returned in the next period after the issuance of the Financial Statement, the enterprise shall record a decrease in revenue of the period in which it occurs (the next period).

1. c) Trade discounts payable are the amount that a business reduces compared to the listed selling price for customers who purchase goods in large quantities or of large value. The seller shall account for trade discounts according to the following principles:

– In case the VAT invoice or sales invoice shows the trade discount for the buyer as a deduction from the amount the buyer must pay (the selling price reflected on the invoice is the price minus the trade discount), the enterprise (seller) does not use this account, the sales revenue is reflected at the price minus the trade discount (net revenue).

– Enterprises must separately track the trade discounts that the enterprise pays to the buyer but have not been reflected as a deduction from the amount payable on the invoice. In this case, the seller records the initial revenue at the price excluding the trade discount (gross revenue). The trade discount that needs to be separately tracked in this account often arises in cases such as:

+ The amount of trade discount the buyer enjoys is greater than the sales amount recorded on the last invoice. This case may arise because the buyer purchases many times to reach the amount of goods purchased to enjoy the discount and the trade discount is only determined on the last purchase;

+ Only at the end of the period can manufacturers determine the quantity of goods that distributors (such as supermarkets) have consumed and from there have the basis to determine the amount of trade discounts to be paid based on sales or the quantity of products consumed.

1. d) Sales discount is a discount compared to the listed selling price for customers due to poor quality products, goods, or goods that do not meet specifications, etc., according to the provisions of the economic contract. The seller shall account for sales discounts according to the following principles:

– In case the VAT invoice or sales invoice shows the sales discount for the buyer as a deduction from the amount the buyer must pay (the selling price reflected on the invoice is the discounted price), the enterprise (seller) does not use this account, the sales revenue is reflected at the discounted price (net revenue).

– Only reflect in this account the deductions due to the approval of discounts after the sale (revenue has been recorded) and the invoice is issued (off-invoice discounts).

1. d) For returned goods, this account is used to reflect the value of products and goods returned by customers due to the following reasons: Violation of commitments, violation of economic contracts, poor quality goods, goods of incorrect type, specifications, etc.
2. e) Accountants must track in detail trade discounts, sales discounts, and sales returns for each customer and each type of goods sold, such as: sales (products, goods), and service provision. At the end of the period, transfer all to account 511 – Sales revenue and service provision to determine the net revenue of the actual volume of products, goods, and services performed in the reporting period.
3. Structure and content of Account 521 – Revenue deductions

Debit:

– Trade discounts accepted for payment to customers;

– Sales discounts approved for buyers;

– Revenue from returned goods has been returned in cash to the buyer or deducted from customer receivables for the number of products and goods sold.

Credit: At the end of the accounting period, transfer all trade discounts, sales discounts, and sales returns to Account 511 – Sales and service revenue to determine net revenue of the reporting period.

Account 521 – Revenue deductions has no ending balance.

Enterprises can open additional detailed accounts for revenue deductions (such as: Trade discounts, Sales discounts, Sales returns…) to suit the characteristics of production and business activities and management requirements of their unit.

3. Accounting methods for some major economic transactions
4. a) Reflecting the actual trade discounts and sales discounts arising during the period, record:

– In case the sold products and goods must be discounted or have a trade discount for the buyer subject to VAT calculated by the deduction method and the enterprise calculates VAT by the deduction method, record:

Debit account 521 – Revenue deductions

Debit account 3331 – VAT payable (output VAT is reduced)

There are accounts 111, 112, 131,…

– In case the sold products and goods must be discounted or have a trade discount for buyers who are not subject to VAT or subject to VAT calculated by the direct method, the sales discount for the buyer is recorded as follows:

Debit account 521 – Revenue deductions

There are accounts 111, 112, 131,…

1. b) Accounting for returned goods

– When a business receives returned products or goods, the accountant reflects the cost of returned goods sold:

Debit accounts 154, 155, 156,…

Credit account 632 – Cost of goods sold.

– Payment to buyers for revenue from returned goods:

Debit account 521 – Revenue deductions

Debit account 3331 – VAT payable (33311) (if any)

There are accounts 111, 112, 131,…

– Expenses incurred related to returned goods (if any), record:

Debit account 641 – Sales expenses

There are accounts 111, 112, 141, 334,…

1. c) At the end of the accounting period, transfer the total revenue deductions arising during the period to account 511 – Sales revenue and service provision, record:

Debit account 511 – Sales revenue and service provision

Credit account 521 – Revenue deductions.

 

PRINCIPLES OF ACCOUNTING EXPENSES

1. Expenses are amounts that reduce economic benefits, recorded at the time the transaction occurs or when there is a relatively certain possibility that they will arise in the future, regardless of whether money has been spent or not.
2. Recording expenses even when the payment deadline has not yet come but there is a possibility that they will certainly arise is to ensure the principle of prudence and capital preservation. When an enterprise records a revenue, it must record a corresponding expense related to the generation of that revenue. Corresponding expenses that generate revenue include expenses of the period in which the revenue is generated and expenses of previous periods or expenses payable but related to the revenue of that period. However, in some cases, the matching principle may conflict with the principle of prudence, so the enterprise must base on the nature of the transaction and Vietnamese Accounting Standards to reflect the transaction honestly and reasonably.
3. Enterprises shall base on the characteristics, nature, quantity, and type of each inventory item as well as management requirements and physical conditions to determine the quantity and value of goods issued from the warehouse each time they arise or calculate on the basis of the quantity and value of inventory at the end of the period accordingly and must be applied consistently between accounting periods, unless there is a change in accounting policy.
4. Enterprises must track in detail the costs incurred by factors such as wages, raw materials, outside costs, depreciation of fixed assets, etc.
5. Expenses that are not considered as corporate income tax expenses according to tax laws but have full invoices and documents and have been accounted for correctly according to the Accounting Regime shall not be recorded as a reduction in accounting expenses but only adjusted in corporate income tax finalization to increase the amount of corporate income tax payable.
6. The expense accounts have no balance, so at the end of the accounting period, the enterprise must transfer all expenses incurred during the period to Account 911 to determine business results.

 

ACCOUNT 621 – DIRECT MATERIALS AND INGREDIENTS COSTS

1. Accounting principles
2. a) This account is used to reflect the cost of raw materials and supplies used directly for the production of products and provision of services of the enterprise.
3. b) Only record in Account 621 the costs of raw materials and supplies (including raw materials, main materials and auxiliary materials) used directly to manufacture products and perform services during the production and business period. The costs of raw materials and supplies must be calculated at the actual price when used.
4. c) During the accounting period, record and aggregate the cost of direct materials and supplies into the Debit side of Account 621 – Cost of direct materials and supplies according to each object directly using these materials and supplies (if when exporting materials and supplies for the production process of products and services, they can be specifically and clearly identified for each user); or aggregate them for the production process, product manufacturing, service performance (if when exporting materials and supplies for the production process of products and services, they cannot be specifically and clearly identified for each user).
5. d) At the end of the accounting period, carry out the transfer (if raw materials and materials have been collected separately for the user), or proceed to calculate the allocation and transfer of raw material and material costs (if not collected separately for each user) to Account 154 – Production and business costs in progress to serve the calculation of production costs of products and services in the accounting period. The allocation of raw material and material values into the cost of products and services, enterprises must be based on allocation criteria appropriate to the characteristics of production and business activities and management requirements of the enterprise.
6. d) When purchasing raw materials and supplies, if input VAT is deductible, the value of raw materials and supplies will not include VAT. If input VAT is not deductible, the value of raw materials and supplies will include VAT.
7. e) The cost of raw materials and direct materials exceeding the normal level shall not be included in the cost of products and services but must be transferred immediately to Account 632 – Cost of goods sold.
8. Structure and content of Account 621 – Cost of direct materials and supplies

Debit:

Actual value of raw materials and supplies used directly for manufacturing products or providing services during the accounting period.

Creditor:

– Transfer the actual value of raw materials and supplies used for production and business during the period to Account 154 – Cost of unfinished production and business and details for each object to calculate the cost of products and services.

– Transfer direct material costs exceeding the normal level to Account 632 – Cost of goods sold.

– The value of raw materials and direct materials not used up is returned to the warehouse.

Account 621 has no ending balance.

3. Accounting methods for some major economic transactions
4. a) When exporting raw materials and supplies used for product manufacturing or service provision during the period, record:

Debit account 621 – Direct material and raw material costs

There is account 152 – Raw materials, materials.

1. b) In case of purchasing raw materials and supplies for immediate use (without warehousing) for product manufacturing or service provision, record:

Debit account 621 – Direct material and raw material costs

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 141, 331,…

1. c) In case the amount of raw materials and supplies issued are not fully used in product manufacturing or service provision at the end of the period and are returned to the warehouse, record:

Debit account 152 – Raw materials and supplies

Credit account 621 – Direct material and raw material costs.

1. d) For direct material costs exceeding the normal level or loss calculated directly into cost of goods sold, record:

Debit account 632 – Cost of goods sold

Credit account 621 – Direct material and raw material costs.

1. d) For the cost of raw materials used in common for the BCC contract at the accounting party for the BCC contract

– When arising costs of raw materials used in common for BCC contract, based on related documents, record:

Debit account 621 – Direct material and raw material costs (details of each contract)

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331,…

– Periodically, the accountant prepares a table of common cost allocation (with confirmation from the parties) to allocate the cost of common raw materials used for the BCC contract to the parties, recording:

Debit account 138 – Other receivables (details for each partner)

Credit account 621 – Direct material and raw material costs

Account 133 – Deductible VAT (if input tax is divided)

Credit account 3331 – VAT payable (if input tax of general expenses has been fully deducted, must increase output tax payable).

1. e) At the end of the accounting period, based on the raw material and material allocation table calculated for each user of raw materials and materials (product manufacturing workshop, product type, construction, construction item of construction activities, service type,… according to the direct or allocation method) to transfer direct raw material and material costs, calculate product and service costs, record:

Debit account 154 – Cost of production and unfinished business

Debit account 632 – Cost of goods sold (above normal level)

Credit account 621 – Direct material and raw material costs.

 

ACCOUNT 622 – DIRECT LABOR COSTS

1. Accounting principles
2. a) This account is used to reflect direct labor costs involved in production and business activities in the industries of industry, construction, agriculture, forestry, fishery, and services (transportation, post and telecommunications, tourism, hotels, consulting, etc.).

Direct labor costs include amounts payable to employees who directly produce products, perform services on the enterprise’s management list and outsourced labor according to each type of work, such as: Salaries, wages, allowances, salary deductions (social insurance, health insurance, union fees, unemployment insurance).

1. b) Do not record into this account the amounts payable for salaries, wages and allowances… for workshop managers, business managers, and sales staff.
2. c) For construction and installation activities only, do not record in this account the salaries, wages and allowances of a salary nature paid to workers directly operating vehicles, construction machines, serving construction machines, social insurance deductions, health insurance, union fees, unemployment insurance calculated on the salary fund payable to workers directly involved in construction and installation activities, operating construction machines, serving construction machines, and workshop staff.
3. d) Account 622 – Direct labor costs must be opened in detail according to the object of production and business cost aggregation.
4. d) The portion of direct labor costs exceeding the normal level is not included in the cost of products and services but must be transferred immediately to Account 632 – Cost of goods sold.
5. Structure and content of Account 622 – Direct labor costs

Debit:

Direct labor costs involved in the production process and service provision include: Salaries, wages and deductions from salaries and wages according to regulations arising during the period.

Creditor:

– Transfer direct labor costs to the Debit side of Account 154 – Work in progress costs;

– Transfer direct labor costs exceeding the normal level to Account 632 – Cost of goods sold.

Account 622 has no ending balance.

3. Accounting methods for some major economic transactions
4. a) Based on the amount of salary, wages and other amounts payable to workers directly producing products and performing services, record:

Debit account 622 – Direct labor costs

Credit account 334 – Payable to employees.

1. b) Calculate and deduct social insurance, health insurance, union fees, unemployment insurance, support payments (such as life insurance, voluntary retirement insurance, etc.) for workers directly producing products and performing services (parts included in the costs the enterprise must bear) from the amount of salary and wages payable according to the prescribed regime, record:

Debit account 622 – Direct labor costs.

Credit account 338 – Other payables.

1. c) When deducting in advance the leave salary of production workers, record:

Debit account 622 – Direct labor costs

Credit account 335 – Payable expenses.

1. d) When production workers actually take leave, the enterprise reflects the amount payable for leave wages of production workers, recording:

Debit account 335 – Payable expenses

Credit account 334 – Payable to employees.

1. d) For labor costs used in common for BCC contracts at the accounting party for the BCC contract

– When arising labor costs used in common for BCC contract, based on related documents, record:

Debit account 622 – Direct labor costs (details for each contract)

There are accounts 111, 112, 334,…

– Periodically, the accountant prepares a table of common cost allocation (with confirmation from the parties) to allocate common labor costs for the BCC contract to the parties, recording:

Debit account 138 – Other receivables (details for each partner)

Credit account 622 – Direct labor costs.

1. e) At the end of the accounting period, based on the Salary Allocation Table and salary deductions to calculate the allocation and transfer of direct labor costs to the Debit side of Account 154 – Production and business costs in progress according to cost aggregation objects to calculate the cost of products and services, record:

Debit account 154 – Cost of production and unfinished business

Debit account 632 – Cost of goods sold (above normal level)

Credit account 622 – Direct labor costs.

 

ACCOUNT 623 – COST OF USING CONSTRUCTION MACHINERY

1. Accounting principles
2. a) This account is used to collect and allocate costs of using vehicles and construction machinery directly serving construction and installation activities in cases where the enterprise carries out construction and installation using a mixed construction method of both manual and machine.
3. b) In case the enterprise carries out construction and installation entirely by machine, it does not use Account 623 – Cost of using construction machinery but records all construction and installation costs directly into Accounts 621, 622, 627.
4. c) Do not record in Account 623 – Cost of using construction machinery deductions for social insurance, health insurance, union fees, unemployment insurance calculated on salaries payable to workers using vehicles and construction machinery. The cost of using construction machinery exceeding the normal level is not included in the cost of construction works but is transferred immediately to Account 632 – Cost of goods sold.
5. Structure and content of Account 623 – Cost of using construction machinery

Debit:

Costs related to the operation of construction machinery (material costs for machine operation, salary costs and salary allowances, wages of workers directly operating the machine, maintenance and repair costs of vehicles, construction machinery…). Material costs, other service costs for vehicles and construction machinery.

Creditor:

– Transfer the cost of using construction vehicles and machinery to the Debit side of Account 154 Work in progress and production costs.

– Transfer the cost of using construction machinery exceeding the normal level to Account 632 – Cost of goods sold.

Account 623 has no ending balance.

Account 623 – Construction machinery usage costs, has 6 sub-accounts:

– Account 6231 – Labor costs: Used to reflect the main salary, additional salary, salary allowance payable to workers directly operating vehicles, construction machines, and serving construction machines such as: Transporting, supplying fuel, materials… for vehicles, construction machines.

This account does not reflect deductions for social insurance, health insurance, and union fees according to current regulations calculated on the salaries of workers using construction vehicles and machines. These deductions are reflected in Account 627 – General production costs.

– Account 6232 – Material costs: Used to reflect fuel costs (gasoline, oil, grease…), other materials for vehicles and construction machinery.

– Account 6233 – Production tool costs: Used to reflect tools and labor equipment related to the operation of vehicles and construction machines.

– Account 6234 – Depreciation cost of construction machinery: Used to reflect depreciation costs of vehicles and construction machinery used in construction activities.

– Account 6237 – Outsourced service costs: Used to reflect the costs of outsourced services such as outsourcing vehicle and construction machine repair; insurance costs for vehicles and construction machines; electricity and water costs, fixed asset rental costs, costs paid to subcontractors, etc.

– Account 6238 – Other cash expenses: Used to reflect cash expenses for the operation of construction vehicles and machinery.

3. Accounting methods for some major economic transactions

Accounting for costs of using construction vehicles and machines depends on the form of construction machine usage: Organizing a separate construction machine team specializing in performing construction work by machine or assigning construction machines to construction teams and enterprises:

1. a) If the organization has its own fleet of vehicles and construction machinery, is decentralized in accounting, and has its own accounting organization, the accounting work is carried out as follows:

– Accounting for costs related to the operation of the vehicle fleet and construction machinery, record:

Debit accounts 621, 622, 627

There are accounts 111, 112, 152, 331, 334, 214,…

– At the end of the accounting period, transfer the cost of using construction machinery to the Debit side of Account 154 – Unfinished business production costs, record:

Debit account 154 – Unfinished production and business costs

There are accounts 621, 622, 627.

– Accounting for vehicle and machine usage costs and calculating the cost of vehicle and machine shifts is performed on Account 154 – Production and business costs in progress based on the cost of machine shifts (according to actual cost or internal contract price) provided to construction and installation objects (projects, construction items); depending on the method of organizing accounting work and the relationship between the construction vehicle team and the construction and installation unit to record:

+ If the enterprise implements the method of providing mutual vehicle and machine services between departments, record:

Debit account 623 – Cost of using construction machinery

Credit account 154 – Cost of production and business in progress.

+ If the enterprise implements the method of selling vehicle and machine services to each other among internal departments, record:

Debit account 623 – Cost of using construction machinery

Debit account 133 – Deductible VAT (1331) (if any)

Credit account 511 – Sales revenue and service provision (details of internal service provision)

Credit account 333 – Taxes and amounts payable to the State (33311) (VAT payable calculated on internal selling price of vehicle and service vending machine) (if any).

1. b) If there is no separate team of vehicles and construction machinery; or if there is a separate team of vehicles and construction machinery but no separate accounting for the team, all costs of using vehicles and machinery (including regular costs and temporary costs such as salary allowances, mobility allowances for vehicles and construction machinery) will be accounted for as follows:

– Based on the amount of salary, wages and other payments to workers operating vehicles, machines, and servicing vehicles and machines, record:

Debit account 623 – Construction machinery usage costs (6231)

Credit account 334 – Payable to employees.

– Value of materials, tools, and equipment used for vehicle and construction machine operations during the period, recorded:

Debit account 623 – Cost of using construction machinery (6232, 6233)

There are accounts 152, 153, 242,…

– In case of purchasing materials, tools, and equipment for immediate use (without warehousing) for the operation of construction vehicles and machines during the period, record:

Debit account 623 – Cost of using construction machinery (6232, 6233)

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331,…

– Depreciation of vehicles and construction machinery used in the Construction Vehicle and Machinery Team, record:

Debit account 623 – Construction machinery usage costs (6234)

Credit account 214 – Depreciation of fixed assets.

– Outsourced service costs (vehicle repair, construction machinery, electricity, water, fixed asset rental, costs paid to subcontractors, etc.) are recorded as:

Debit account 623 – Construction machinery usage costs (6237)

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331,…

– Other cash expenses incurred, record:

Debit account 623 – Construction machinery usage costs (6238)

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112,…

– Based on the Vehicle and Machinery Usage Cost Allocation Table (actual vehicle and machinery shift costs) calculated for each project and project item, record:

Debit account 154 – Cost of production and unfinished business (item of cost of using construction machinery)

Debit account 632 – Cost of goods sold (costs exceeding normal level)

Credit account 623 – Construction machinery usage costs.

 

ACCOUNT 627 – GENERAL PRODUCTION COSTS

1. Accounting principles
2. a) This account is used to reflect general production and business costs arising in workshops, departments, teams, construction sites, etc. serving product manufacturing and service provision, including: Salaries of workshop, department, and production team managers; Depreciation of fixed assets used directly for production; Social insurance, health insurance, union fees, and unemployment insurance deductions calculated at the prescribed rate on salaries payable to workshop, department, and production team employees and other directly related costs to workshops, departments, and production teams.
3. b) Particularly for construction and installation business activities, this account reflects all deductions for social insurance, health insurance, union fees, unemployment insurance of workers directly involved in construction and installation, employees using construction machines and team managers (on the list of employees in the enterprise); Depreciation of fixed assets used for workshops and production departments; borrowing costs, if capitalized, are included in the value of assets in the process of unfinished production; Other costs related to the operation of workshops, departments, teams, production teams, etc.
4. c) Account 627 – General production costs are only used in industrial, agricultural, forestry, fishery, construction, transportation, postal, tourism, and service enterprises.
5. d) Account 627 – General production costs are accounted for in detail for each workshop, department, group, and production team.
6. d) General production costs reflected in Account 627 – General production costs must be accounted for in detail according to 2 types: Fixed general production costs and variable general production costs, in which:

– Fixed general production costs are production costs that usually do not change with the number of products produced, such as maintenance costs of machinery, equipment, factories, etc. and administrative management costs in departments , divisions, teams, production teams, etc.

+ Fixed general manufacturing costs allocated to processing costs for each unit of product are based on the normal capacity of the production machinery. Normal capacity is the average quantity of products achieved under normal production conditions;

+ In case the actual output level is higher than the normal capacity, the fixed general production cost is allocated to the processing cost for each product unit according to the actual cost incurred;

+ In case the actual output level is lower than the normal capacity, the fixed general manufacturing costs are only allocated to the processing costs for each product unit according to the normal capacity level. The remaining unallocated general manufacturing costs are recorded in the cost of goods sold in the period.

– Variable manufacturing overhead costs are manufacturing costs that vary directly or almost directly with the quantity of products produced, such as raw material costs, indirect materials, and indirect labor costs. Variable manufacturing overhead costs are allocated entirely to the processing costs for each product unit according to actual costs incurred.

1. e) In case a production process produces many types of products in the same period of time and the general production cost of each type of product is not reflected separately, the general production cost is allocated to the types of products according to appropriate and consistent criteria between accounting periods according to the provisions of Vietnamese accounting standards.
2. g) At the end of the period, the accountant calculates and allocates the transfer of general production costs to the Debit side of Account 154 – Unfinished production and business costs.
3. h) Account 627 – General production costs not used for commercial business activities.
4. Structure and content of Account 627 – General production costs

Debit:

General manufacturing costs incurred during the period.

Creditor:

– General manufacturing cost deductions;

– Fixed general manufacturing costs not allocated during the period due to the actual product production level being lower than normal capacity are recorded in cost of goods sold;

– Transfer general production costs to the Debit side of Account 154 – Work in progress costs.

Account 627 has no ending balance.

Account 627 – General production costs, has 7 sub-accounts:

– Account 6271 – Workshop staff costs: Reflects salaries and allowances payable to workshop and production department managers; Meal allowances between shifts of workshop and production department managers; Social insurance, health insurance, union fees, unemployment insurance, etc. deductions are calculated according to the current prescribed rate on salaries payable to workshop, department, group, production team, etc. employees.

– Account 6272 – Material costs: Reflects the cost of raw materials and supplies used for the workshop, such as materials used to repair and maintain fixed assets, tools and equipment managed and used by the workshop, temporary camp costs, etc.

– Account 6273 – Production tool costs: Reflects the costs of tools and equipment used for management activities of workshops, departments, production teams, etc.

– Account 6274 – Fixed asset depreciation costs: Reflects the depreciation costs of fixed assets used directly for product manufacturing activities, service provision and fixed assets used in common for the activities of workshops, departments, production teams, etc.

Account 6275 – Taxes, fees, charges: Reflects tax, fee, and charge expenses directly related to workshops, departments, production teams, etc. serving product manufacturing and service provision such as: land rent, resource tax, environmental protection fees, etc.

– Account 6277 – Outsourced service costs: Reflects the costs of outsourced services serving the operations of workshops and production departments such as: Repair costs, outsourcing costs, electricity, water, telephone costs, fixed asset rental costs, costs paid to subcontractors (for construction and installation enterprises).

– Account 6278 – Other cash expenses: Reflects cash expenses other than the above-mentioned expenses serving the operations of the workshop, department, team, and production team.

3. Accounting methods for some major economic transactions
4. a) When calculating salaries, wages, and allowances payable to workshop employees; mid-shift meal allowances for workshop, department, team, and production team managers, record:

Debit account 627 – General production costs (6271)

Credit account 334 – Payable to employees.

1. b) When deducting social insurance, health insurance, union fees, unemployment insurance, and employee support payments (such as life insurance, voluntary retirement insurance) calculated according to the current prescribed rate on the salary payable to workshop employees, construction machine operators, and production management department, record:

Debit account 627 – General production costs (6271)

Credit account 338 – Other payables.

1. c) Accounting for costs of raw materials, materials, tools and equipment used in the workshop:

– When issuing materials for common use in the workshop, such as repairing and maintaining fixed assets used for managing and operating the workshop’s operations, record:

Debit account 627 – General production costs (6272)

There is account 152 – Raw materials, materials.

– When issuing production tools and equipment with a small total value for use in workshops, departments, groups, or production teams, based on the warehouse delivery note, record:

Debit account 627 – General production costs (6273)

There is account 153 – Tools and equipment.

– When issuing production tools and equipment with a large total value for use in workshops, departments, teams, or production groups, they must be gradually allocated and recorded:

Debit account 242 – Expenses awaiting allocation

There is account 153 – Tools and equipment.

– When allocating the value of tools and equipment to general production costs, record:

Debit account 627 – General production costs (6273)

Credit account 242 – Expenses awaiting allocation.

1. d) Depreciation of machinery, equipment, production plants, etc. belonging to workshops, departments, groups, and production teams, record:

Debit account 627 – General production costs (6274)

Credit account 214 – Depreciation of fixed assets.

1. d) Costs of electricity, water, telephone,… and other cash expenses of the workshop, department, team, production group, record:

Debit account 627 – General production costs (6277, 6278)

Debit account 133 – Deductible VAT (if VAT is deductible)

There are accounts 111, 112, 331,…

1. e) When tax, fee, and charge expenses such as land rent, resource tax, environmental protection fee, etc. arise that are directly related to the workshop, department, team, production team, etc., record:

Debit account 627 – General production costs (6275)

Credit account 333 – Taxes and amounts payable to the State

1. g) In case of periodic repair and maintenance of fixed assets in the workshop:

– When actual costs of repair and periodic maintenance of fixed assets arise, record:

Debit account 2413 – Periodic repair and maintenance of fixed assets

Debit account 133 – Deductible VAT (if any)

There are accounts 331, 111, 112,…

– When the cost of periodic repair and maintenance of fixed assets is completed, transfer the cost of periodic repair and maintenance of fixed assets to the cost awaiting allocation, record:

Debit account 242 – Expenses awaiting allocation

Credit account 2413 – Periodic repair and maintenance of fixed assets.

– Periodically, gradually allocate the cost of repair and periodic maintenance of fixed assets into general production costs, record:

Debit account 627 – General production costs

Credit account 242 – Expenses awaiting allocation

1. h) In case an enterprise has fixed assets for operating lease, when expenses related to fixed assets for operating lease arise:

– When incurring initial direct costs related to operating leases, record:

Debit account 627 – General production costs

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331,…

– Periodically calculate and depreciate fixed assets for operating lease into production and business expenses, record:

Debit account 627 – General production costs (6274)

Credit account 214 – Depreciation of fixed assets (depreciation of fixed assets for operating lease).

1. i) At the end of the accounting period, determine the interest payable on loans capitalized into unfinished products according to regulations, record:

Debit account 627 – General production costs (assets in progress)

There are accounts 111, 112, 335, 341,…

1. k) General production costs in cash or purchased services, record:

Debit account 627 – General production costs (6277, 6278)

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331,…

1. l) If there are any reductions in general manufacturing costs, record:

Debit accounts 111, 112, 138,…

Credit account 627 – General manufacturing costs.

1. m) For general production costs used for BCC contracts at the accounting party for the BCC contract

– When arising common production costs used for BCC contract, based on invoices and related documents, record:

Debit account 627 – General production costs (details for each contract)

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331…

– Periodically, the accountant prepares a table of common cost allocation (with confirmation from the parties) to allocate common production costs used for the BCC contract to the parties, recording:

Debit account 138 – Other receivables (details for each partner)

There are accounts 627 – General production costs

Account 133 – Deductible VAT (if input tax is divided)

Credit account 3331 – VAT payable (if input tax of general expenses has been fully deducted, must increase output tax payable).

1. n) At the end of the accounting period, based on the General Production Cost Allocation Table, transfer or allocate general production costs to relevant accounts for each product, product group, and service according to appropriate criteria:

Debit account 154 – Cost of production and unfinished business

Debit account 632 – Cost of goods sold (unallocated fixed manufacturing costs)

Credit account 627 – General manufacturing costs.

 

ACCOUNT 632 – COST OF GOODS SOLD

1. Accounting principles
2. a) This account is used to reflect the capital value of products, goods, services, biological assets (except perennial plants for periodic products and working animals accounted for as fixed assets), real estate; production cost of construction products sold during the period. In addition, this account is also used to reflect costs related to real estate business activities such as: Depreciation costs; repair costs; rental costs of real estate under the operating lease method, sales costs of real estate, etc.
3. b) The provision for inventory price reduction is included in the cost of goods sold based on the quantity of inventory and the difference between the net realizable value being less than the original price of inventory. When determining the volume of inventory with price reduction requiring provision, the enterprise must exclude the volume of inventory for which a sales contract has been signed (with a net realizable value not lower than the book value) but has not yet been transferred to customers if there is certain evidence that the customer will not abandon the contract.
4. c) Provision for high risk contracts related to the sale of inventories is recorded in cost of goods sold.
5. d) For the value of damaged or lost inventory, the enterprise must immediately calculate it into the cost of goods sold (after deducting compensation, if any).
6. d) For direct material costs consumed in excess of normal levels, direct labor costs, and fixed general production costs not allocated to the cost of products and services produced, enterprises must immediately calculate them into the cost of goods sold (after deducting compensation, if any), even when the products and services have not been determined to be consumed.
7. e) Import taxes, special consumption tax, and environmental protection tax included in the value of purchased goods, if these taxes are refunded when selling goods, will be recorded as a reduction in cost of goods sold.
8. g) Expenses that are not considered as corporate income tax expenses according to the provisions of the Tax Law but have full invoices and documents and have been accounted for correctly according to the Accounting Regime shall not be recorded as a reduction in accounting expenses but only adjusted in the corporate income tax finalization to increase the amount of corporate income tax payable.
9. Structure and content of Account 632 – Cost of goods sold

Debit:

– For production and business activities, reflect:

+ Capital value of products, goods, services, biological assets (except perennial plants for periodic products and working animals) sold during the period;

+ Costs of raw materials, direct materials, direct labor costs exceeding the normal level and fixed general manufacturing costs not allocated are included in the cost of goods sold in the period;

+ Inventory losses and damages after deducting compensation due to personal liability;

+ Amount of provision for inventory devaluation (the difference between the amount of provision for inventory devaluation that must be set up this period is greater than the amount of provision established in the previous period that has not been fully used).

– For real estate business activities, reflect:

+ Depreciation of real estate used for operating lease during the period;

+ Repair and maintenance costs of real estate are not included in the original price of real estate;

+ Expenses arising from real estate leasing activities during the period;

+ Remaining value and selling cost of real estate sold during the period.

Creditor:

– Cost of returned goods;

– Trade discounts and purchase price reductions received after the purchased goods have been consumed;

– Import taxes, special consumption tax, environmental protection tax, and resource tax have been included in the value of purchased goods, if when selling goods, such taxes are refunded;

– Reversal of inventory price reduction provision at the end of the reporting period (the difference between the provision to be established this period is less than the unused provision established in the previous period);

– Transfer cost of products, goods and services sold during the period to Account 911 – Determine business results;

– Carry forward the remaining value and costs of selling and liquidating real estate to determine the profit/loss of selling and liquidating real estate during the period.

Account 632 has no ending balance.

Enterprises can open additional detailed accounts for cost of goods sold to suit the characteristics of their production and business activities and management requirements (such as: cost of goods, products, services, real estate development,…).

3. Accounting methods for some major economic transactions
4. a) When selling completed products, goods, biological assets, and services that are determined to be sold during the period (including complimentary products, goods, and services), record:

Debit account 632 – Cost of goods sold

There are accounts 154, 155, 156, 157, 215,…

1. b) Reflects expenses directly accounted for in cost of goods sold:

– In case the actual production level is lower than the normal capacity, the enterprise must calculate and determine the fixed general production costs allocated to the processing cost for a product unit according to the normal capacity level. The unallocated fixed general production costs (not included in the product’s production cost, the difference between the total actual fixed general production costs incurred being greater than the fixed general production costs included in the product’s production cost) are recorded in the cost of goods sold in the period, recorded as:

Debit account 632 – Cost of goods sold

Credit account 627 – General manufacturing costs.

– Reflects the loss or damage of inventory after deducting (-) the compensation caused by personal responsibility according to the handling decision of the competent authority, calculated into the cost of goods sold, recorded:

Debit account 632 – Cost of goods sold

There are accounts 152, 153, 156, 138 (1381),…

1. c) Accounting for provisions or reversal of inventory price reduction provisions

– In case the amount of inventory price reduction provision that must be established this period is greater than the amount established in the previous period that has not been fully used, the enterprise shall set aside additional provisions for the difference and record:

Debit account 632 – Cost of goods sold

Credit account 229 – Provision for asset losses (2294).

– In case the amount of inventory price reduction provision that must be established this period is smaller than the amount established in the previous period that has not been fully used, the enterprise shall reverse the difference and record:

Debit account 229 – Provision for asset losses (2294)

Credit account 632 – Cost of goods sold.

1. d) When setting up provisions for contracts with high risks related to inventories, record:

Debit account 632 – Cost of goods sold

Credit account 352 – Payable provisions.

1. d) Economic activities related to real estate business activities:

– Periodically calculate and depreciate real estate currently leased for operation, record:

Debit account 632 – Cost of goods sold (details of real estate business expenses)

Credit account 2147 – Depreciation of fixed assets.

– When costs related to real estate arise after initial recognition and do not satisfy the conditions for recording an increase in real estate value, record:

Debit account 632 – Cost of goods sold (regular repair and maintenance costs)

Debit account 242 – Expenses awaiting allocation (periodic repair and maintenance costs)

There are accounts 111, 112, 152, 153, 334,….

– Periodically, allocate costs for periodic repair and maintenance of real estate, record:

Debit account 632 – Cost of goods sold (details of real estate business expenses)

Credit account 242 – Expenses awaiting allocation.

– Expenses related to leasing real estate activities, record:

Debit account 632 – Cost of goods sold (details of real estate business expenses)

There are accounts 111, 112, 331, 334,….

– Accounting for reduction of original price and depreciation value of real estate (if any) due to sale or liquidation, record:

Debit account 2147 – Depreciation of fixed assets (accumulated depreciation value of fixed assets)

Debit account 632 – Cost of goods sold (remaining value of real estate)

Credit account 217 – Investment real estate (original cost).

– Real estate sales costs incurred, record:

Debit account 632 – Cost of goods sold (details of real estate business expenses)

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331,….

– Accounting for sale and liquidation of investment real estate, see instructions in Account 217 – Investment real estate.

1. e) In case of using products manufactured by the enterprise and converting them into fixed assets for use, record:

Debit account 211 – Tangible fixed assets

Credit account 154 – Cost of production and business in progress

Credit account 3331 – Value added tax payable (if any).

1. g) Returned goods to warehouse, record:

Debit accounts 155,156

Credit account 632 – Cost of goods sold.

1. h) In case of trade discounts or sales discounts received after purchasing goods, the enterprise must base on the fluctuations of inventory to allocate the trade discounts and sales discounts received based on the unsold inventory, the amount of exported goods used for construction investment activities or determined to be consumed in the period:

Debit accounts 111, 112, 331,…

There are accounts 152, 153, 154, 155, 156 (value of CKTM, GGHB of unsold inventory in the period)

Credit account 241 – Construction in progress (value of CKTM, GGHB of issued inventory used for construction investment activities)

Credit account 632 – Cost of goods sold (value of CKTM, GGHB of inventory sold during the period).

1. i) Transfer the cost of goods sold of products, goods, real estate, and services identified as sold during the period to the Debit side of Account 911 – Determining business results, record:

Debit account 911 – Determining business results

Credit account 632 – Cost of goods sold.

 

ACCOUNT 635 – FINANCIAL EXPENSES

1. Accounting principles
2. a) This account reflects financial operating expenses including expenses or losses related to financial investment activities, costs of purchasing trading securities, costs of borrowing capital but not capitalized according to regulations, losses on transferring financial investments, transaction costs of selling financial investments; the difference between the pre-maturity repurchase price of issued bonds higher than the book value of the bonds; Provision for devaluation of trading securities and provisions for losses on investments in other entities, exchange rate losses arising from selling foreign currencies or re-evaluating foreign currency-based monetary items at the end of the period; Payment discounts for buyers,…
3. b) Account 635 – Financial expenses must be accounted for in detail for each expense item. The following expense items shall not be accounted for in Account 635 – Financial expenses:

– Costs for manufacturing products and providing services;

– Selling expenses;

– Business management costs;

– Real estate business costs;

– Basic construction investment costs;

– Expenses covered by other funding sources;

– Other costs.

1. c) Bond issuance costs and borrowing costs are gradually allocated in accordance with the bond term or loan term and are recorded in financial expenses if the bond issuance or borrowing serves normal production and business purposes.
2. d) Interest payable on convertible bonds is included in financial expenses during the period and is determined by multiplying the value of the principal debt at the beginning of the period of the convertible bond (x) with the interest rate of similar bonds on the market but without the right to convert into shares or the common borrowing interest rate on the market at the time of issuance of convertible bonds (see detailed regulations in the guidance section on Account 343 – Issued bonds).
3. d) If the preference shares are classified as liabilities, the preference dividends are essentially interest and should be recognized in financial expenses.
4. Structure and content of Account 635 – Financial expenses

Debit:

– Interest expense on loans, interest on deferred purchases, interest on financial leased assets;

– Payment discount for buyers;

– Losses from liquidation and sale of financial investments;

– Exchange rate loss arising during the period; Exchange rate loss due to revaluation of foreign currency items at the end of the accounting period;

– Amount of provision for devaluation of trading securities, provision for loss on investments in other entities (investments in subsidiaries, joint ventures, associates; other investments; investments held to maturity) (the difference between the provision to be set up this period is greater than the unused provision set up in the previous period);

– Expenses for purchasing trading securities, expenses for transferring financial investments.

Creditor:

– Reversal of provisions for devaluation of trading securities, provisions for loss on investments in other entities (the difference between the amount of provisions to be set up this period is less than the amount of provisions set up in the previous period that have not been fully used);

– Amounts recorded as reductions in financial expenses;

– At the end of the accounting period, transfer all financial expenses incurred during the period to Account 911 to determine business performance.

Account 635 has no ending balance.

3. Accounting methods for some major economic transactions

3.1. When expenses arise related to the purchase of business securities, sale of financial investments, lending, foreign currency trading…, record:

Debit account 635 – Financial expenses

There are accounts 111, 112, 141,…

3.2. When selling trading securities, liquidating and transferring investments in subsidiaries, joint ventures and associated companies that result in losses, record:

Debit accounts 111, 112,…

Debit account 229 – Provision for asset losses (provision set aside to cover losses) (if any)

Debit account 635 – Financial expenses (loss)

There are accounts 121, 221, 222, 228 (book value).

The reversal of provisions made for investments may be recorded immediately for each transaction at the time of sale of the investment or when determining the amount of provisions for investment losses at the end of each accounting period but must be consistent with the provisions of Vietnamese Accounting Standards.

3.3. When receiving back capital contributions to subsidiaries, joint ventures, associates, or other investments where the fair value or agreed price as agreed by the parties to evaluate the divided assets is less than the value of the capital contribution, record:

Debit accounts 111, 112, 152, 156, 211,… (fair value of divided assets)

Debit account 229 – Provision for asset losses (provision set aside to cover losses) (if any)

Debit account 635 – Financial expenses (loss)

There are accounts 221, 222,…

The reversal of provisions made for investments may be recorded immediately for each transaction at the time of recovery or when determining the amount of provisions for investment losses at the end of each accounting period but must be consistent with the provisions of Vietnamese Accounting Standards.

3.4. In case an enterprise sells its investment in shares of another enterprise in the form of a share swap, the enterprise must determine the fair value of the shares received at the time of the swap. The difference (if any) between the fair value of the shares received being less than the book value of the shares exchanged is recorded as a financial expense, recorded as:

Debit accounts 121, 221, 222, 228 (fair value of received shares)

Debit account 635 – Financial expenses (the difference between the fair value of the received shares being lower than the book value of the shares exchanged)

There are accounts 121, 221, 222, 228 (book value of convertible shares).

3.5. Accounting for provisions for devaluation of trading securities and provisions for losses on investments in other entities at the end of the accounting period:

– In case the amount of provision to be established this period is greater than the amount of provision established in the previous period that has not been fully used, the enterprise shall make additional provision for the difference and record:

Debit account 635 – Financial expenses

Credit account 229 – Provision for asset losses (2291, 2292).

– In case the amount of provision to be established this period is less than the amount of provision established in the previous period that has not been fully used, the enterprise shall refund the difference and record:

Debit account 229 – Provision for asset losses (2291, 2292)

Credit account 635 – Financial expenses.

3.6. Payment discount for buyers of goods and services due to early payment according to the agreement when buying or selling goods, record:

Debit account 635 – Financial expenses

There are accounts 131, 111, 112,….

3.7. Costs directly related to the loan (other than interest payable), such as auditing costs, loan application appraisal costs, loan arrangement costs, etc., if not capitalized, are included in financial costs:

+ When expenses arise, record:

Debit account 341 – Loans and financial lease debts (3411)

There are accounts 111, 112, 331,…

+ When allocating borrowing costs, record:

Debit account 635 – Financial expenses

Credit account 341 – Loans and financial lease liabilities (3411).

3.8. Enterprises reflect periodic loan interest payable, record:

Debit account 635 – Financial expenses

There are accounts 111, 112, 335,….

3.9. In case an enterprise periodically pays rental interest on financial leased fixed assets, when the lessee receives the payment invoice from the lessor, record:

Debit account 635 – Financial expenses (interest paid periodically)

There are accounts 111, 112,….

3.10. When purchasing materials, goods, and fixed assets by installment payment for immediate use in production and business activities, record:

Debit accounts 152, 153, 156, 211, 213 (according to cash purchase price)

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331,…

– Periodically, reflect the payment of late interest and installment payments to the seller each period, record:

Debit account 635 – Financial expenses

Credit account 331 – Payable to sellers.

– Periodically, when paying the seller including principal and interest for late payment and installment payments, record:

Debit account 331 – Payable to sellers

There are accounts 111 and 112.

At the same time, the enterprise opens a detailed logbook to track the increase and decrease in late payment interest and installment payments when purchasing assets.

3.11. In the case of selling Government bonds under a repurchase agreement (repo), when allocating the difference between the selling price and the repurchase price of the Government bonds of the Government bond repurchase agreement to periodic expenses according to the contract period, record:

Debit account 635 – Financial expenses

Credit account 171 – Transactions of buying and selling government bonds.

3.12. In case preferred shares are classified as liabilities, the enterprise must pay dividends at a certain rate/level regardless of whether the business results in the period are profit or loss, the preferred dividend is essentially a loan interest and must be recorded in financial expenses, recorded as follows:

Debit account 635 – Financial expenses

Credit account 332 – Dividends and profits payable.

3.13. At the end of the period, transfer all financial expenses incurred during the period to Account 911 to determine business results, record:

Debit account 911 – Determining business results

Credit account 635 – Financial expenses.

 

ACCOUNT 641 – COST OF GOODS SOLD

1. Accounting principles
2. a) This account is used to reflect actual costs incurred in the process of selling products, goods, and providing services, including costs for sales department staff salaries (salaries, wages, allowances, etc.); social insurance, health insurance, union fees, unemployment insurance for sales department staff; costs of offering, introducing products, advertising products, sales commissions, costs of preservation, packaging, transportation, costs of product, goods, services, construction works warranty (for construction and installation enterprises), costs of repairing fixed assets used for the sales department, etc.
3. b) Sales expenses that are not considered as corporate income tax expenses according to the provisions of the Tax Law but have full invoices and vouchers and have been accounted for correctly according to the Accounting Regime shall not be recorded as a reduction in accounting expenses but only adjusted in the corporate income tax finalization to increase the amount of corporate income tax payable.
4. c) Additional costs for the business to obtain contracts with customers are allocated to each period.
5. d) Account 641 is opened in detail for each cost item such as: Cost of employees, materials, packaging, tools, supplies, depreciation of fixed assets; outside services, other cash costs. Depending on the business characteristics, management requirements of each industry, each enterprise, Account 641 – Sales costs can be opened with some additional cost items. At the end of the period, the accountant transfers the sales costs to the Debit side of Account 911 – Determining business results to determine business results.
6. Structure and content of Account 641 – Sales expenses

Debit:

Costs incurred in connection with the process of selling products, goods, and providing services arising during the period.

Creditor:

– Amount recorded as a reduction in selling expenses during the period (if any);

– Transfer selling expenses to Account 911 to determine business results for the period.

Account 641 has no ending balance.

Account 641 – Sales expenses, has 7 sub-accounts:

– Account 6411 – Employee costs: Reflects the amounts payable to sales staff, packaging, shipping, product and goods preservation staff, etc., including salaries, mid-shift meal allowances, wages and deductions for social insurance, health insurance, union fees, unemployment insurance, bonuses and benefits for sales department staff in cases where the enterprise does not only use the bonus and welfare fund but directly accounts for it in production and business costs in the period….

– Account 6412 – Material and packaging costs: Reflects the costs of materials and packaging used for preserving and consuming products, goods and services, such as costs of packaging materials for products and goods, costs of materials and fuel used for preserving, loading and transporting products and goods during the consumption process, materials used for repairing and preserving fixed assets, etc. for the sales department.

– Account 6413 – Cost of tools and supplies: Reflects the cost of tools and supplies serving the consumption process of products and goods such as measuring tools, calculating tools, working tools, etc.

– Account 6414 – Fixed asset depreciation costs: Reflects the depreciation costs of fixed assets in the storage and sales departments, such as warehouses, stores, yards, loading and unloading vehicles, transportation, calculation, measurement, quality testing equipment, etc.

– Account 6415 – Taxes, fees, charges: Reflects tax, fee, and charge expenses directly related to the sales department such as: land rent,…

– Account 6417 – Outsourced service costs: Reflects the costs of outsourced services for sales such as costs of outsourcing repair of fixed assets directly serving the sales stage, warehouse rent, yard rent, loading and unloading, transporting products and goods for sale, commissions paid to sales agents, to export consignment units, etc.

– Account 6418 – Other cash expenses: Reflects other cash expenses incurred in the sales process other than the above-mentioned expenses such as customer reception expenses in the sales department, product and goods introduction expenses, advertising, sales promotion, customer conference expenses, etc.

3. Accounting methods for some major economic transactions
4. a) Calculate salary, allowances, meal allowances between shifts and calculate, deduct social insurance, health insurance, union fees, unemployment insurance, other support payments (such as life insurance, voluntary retirement insurance…) for employees directly serving the process of selling products, goods, and providing services, record:

Debit account 641 – Sales expenses

There are accounts 334, 338,…

1. b) Value of materials and tools used in the sales process, recorded:

Debit account 641 – Sales expenses

There are accounts 152, 153, 242,…

1. c) Depreciation of fixed assets of the sales department, record:

Debit account 641 – Sales expenses

Credit account 214 – Depreciation of fixed assets.

1. d) Costs of electricity, water purchased from outside, information costs (telephone, fax…), and outsourcing costs for repairing fixed assets of small value are calculated directly into sales expenses, recorded as:

Debit account 641 – Sales expenses

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 141, 331,…

1. d) Accounting for repair costs of fixed assets serving sales

– For regular repairs and maintenance, based on relevant documents, record:

Debit account 641 – Sales expenses

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112,…

– For periodic repairs and maintenance, based on relevant documents, record:

+ When actual costs of repair and periodic maintenance of fixed assets arise, record:

Debit account 2413 – Periodic repair and maintenance of fixed assets

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331,…

+ When the repair and periodic maintenance of fixed assets is completed and put into use, record:

Debit account 242 – Expenses awaiting allocation

Debit account 133 – Deductible VAT (if any)

Credit account 2413 – Periodic repair and maintenance of fixed assets

+ Periodically, accountants allocate costs of periodic repair and maintenance of fixed assets to sales expenses in each period, recording:

Debit account 641 – Sales expenses

Credit account 242 – Expenses awaiting allocation.

1. e) For product, goods, service warranty costs and provisioning and reversal of construction warranty provisions, accounting is performed according to the instructions in Account 352 – Provisions for payables.
2. g) For products and goods used for promotion and advertising

– For purchased goods or products produced by the enterprise for promotion or advertising without collecting money, without other conditions such as having to buy the product or goods, record:

Debit account 641 – Sales expenses

There are accounts 155, 156,…

Credit account 3331 – Value added tax payable (if any).

1. h) For products and goods consumed internally for sales activities, based on related documents, the enterprise records:

Debit account 641 – Sales expenses

There are accounts 155, 156,…

Credit account 3331 – VAT payable (if any).

1. i) In case of products and goods used for gifts:

– In case products and goods are used as gifts for customers outside the enterprise, they are included in production and business costs:

Debit account 641 – Selling expenses (product manufacturing costs, cost of goods)

There are accounts 155, 156,…

Credit account 3331 – VAT payable (if any).

– In case products and goods used as gifts for employees are covered by the reward and welfare fund:

Debit account 353 – Reward and welfare fund (total payment amount)

Credit account 511 – Sales revenue and service provision

Credit account 3331 – VAT payable (if any).

At the same time, record the cost of goods sold for the value of products and goods used as gifts to employees:

Debit account 632 – Cost of goods sold

There are accounts 155, 156,…

1. k) Amount payable to the export consignee for expenses related to export consignment goods and export consignment fees, based on related documents, record:

Debit account 641 – Sales expenses

Debit account 133 – Deductible VAT (if any)

Credit account 338 – Other payables (3388).

1. l) Land use fees and land rent payable to the State related to the sales department, record:

Debit account 641 – Sales expenses (6415)

Credit account 333 – Taxes and amounts payable to the State (3337).

1. m) Sales commission that the principal must pay to the consignee, record:

Debit account 641 – Sales expenses

Debit account 133 – Deductible VAT (if any)

Credit account 131 – Accounts receivable from customers.

1. n) When there are sales expense reductions, record:

Debit accounts 111, 112,…

Credit account 641 – Sales expenses.

1. o) At the end of the accounting period, transfer the sales expenses incurred during the period to Account 911 to determine the business results, record:

Debit account 911 – Determining business results

Credit account 641 – Sales expenses.

 

ACCOUNT 642 – BUSINESS MANAGEMENT COSTS

1. Accounting principles
2. a) This account is used to reflect the general management costs of the enterprise, including costs for salaries of employees in the enterprise management department (salaries, wages, allowances, etc.); social insurance, health insurance, union fees, unemployment insurance of enterprise management employees; costs of office materials, labor tools, depreciation of fixed assets used for enterprise management; land rent of the management department, business license fees; provisions for bad debt; provisions for enterprise restructuring; outsourced services (electricity, water, telephone, fax, property insurance, fire and explosion, etc.); other cash expenses (reception, customer conferences, etc.).
3. b) Business management expenses that are not considered as corporate income tax expenses according to the provisions of the Tax Law but have full invoices and documents and have been accounted for correctly according to the Accounting Regime shall not be recorded as a reduction in accounting expenses but only adjusted in the corporate income tax finalization to increase the amount of corporate income tax payable.
4. c) Account 642 – Business management expenses is opened in detail for each cost content according to regulations. Depending on the management requirements of each industry and each enterprise, Account 642 – Business management expenses can open additional level 2 accounts to reflect the cost content of business management expenses. At the end of the period, the enterprise transfers business management expenses to the Debit side of Account 911 – Determining business results to determine business results.
5. Structure and content of Account 642 – Business management costs

Debit:

– Actual business management costs incurred during the period;

– The amount of provision for bad debts and payables is included in business management expenses (The difference between the provision to be set up this period is greater than the unused provision set up in the previous period);

Creditor:

– Amounts recorded as reductions in business management costs;

– Reversal of bad debt provisions and payable provisions included in business management expenses (the difference between the provision to be established this period is less than the unused provision established in the previous period);

– Transfer business management costs to Account 911 to determine business results.

Account 642 has no ending balance.

Account 642 – Business management expenses, has 8 sub-accounts:

– Account 6421 – Management staff costs: Reflects the amounts payable to the enterprise’s management staff, such as salaries, allowances, social insurance, health insurance, union fees, unemployment insurance, etc. of the Board of Directors, management staff in the enterprise’s departments and divisions, rewards and benefits for management staff in cases where the enterprise does not only use the reward and welfare fund but also directly accounts it into production and business costs in the period.

– Account 6422 – Management material costs: Reflects the cost of materials used for business management such as stationery… materials used for repairing fixed assets, tools, equipment,…

– Account 6423 – Office supplies costs: Reflects the costs of tools, office supplies, and working equipment used for management work.

– Account 6424 – Fixed asset depreciation expense: Reflects the depreciation expense of fixed assets used in common for business management such as: Office buildings of departments, warehouses, architectural structures, means of transport and transmission, management machinery and equipment used in offices, etc.

– Account 6425 – Taxes, fees and charges: Reflects expenses related to taxes, fees and charges such as: business license fees, land rent,… and other taxes, fees and charges.

– Account 6426 – Provision expenses: Reflects provisions for bad debts, provisions for business restructuring,…

– Account 6427 – Outsourced service costs: Reflects the costs of outsourced services for business management such as fixed asset rental costs, electricity and water costs, etc.

– Account 6428 – Other cash expenses: Reflects other expenses under the general management of the enterprise, in addition to the above-mentioned expenses, such as: Conference expenses, reception expenses in the management department, business expenses, transportation, expenses for female workers, etc.

3. Accounting methods for some major economic transactions

3.1. Salaries, wages, allowances and other amounts payable to employees of the enterprise management department, deductions for social insurance, health insurance, union fees, unemployment insurance, other support payments (such as life insurance, voluntary retirement insurance…) of enterprise management employees, record:

Debit account 642 – Business management costs (6421)

There are accounts 334 and 338.

3.2. Value of materials used or purchased for immediate use in business management such as: Gasoline, oil, grease for running vehicles, materials used for repairing the business’s common fixed assets,… record:

Debit account 642 – Business management costs (6422)

Debit account 133 – Deductible VAT (1331) (if any)

There are accounts 111, 112, 152, 242, 331,…

3.3. The value of office tools and supplies issued for use or purchased for immediate use without going through the warehouse for the management department is calculated directly once into the business management costs, recorded as:

Debit account 642 – Business management costs (6423)

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 153, 331,…

3.4. Depreciation of fixed assets used for general management of the enterprise, such as: Houses, structures, warehouses, transmission equipment,… record:

Debit account 642 – Business management costs (6424)

Credit account 214 – Depreciation of fixed assets.

3.5. Business license fees, land rent,… must be paid to the State, record:

Debit account 642 – Business management costs (6425)

Credit account 333 – Taxes and amounts payable to the State.

3.6. Traffic fees, bridge and ferry fees to be paid, record:

Debit account 642 – Business management costs (6425)

There are accounts 111, 112,…

3.7. Accounting for provisions for doubtful debts at the end of the accounting period:

– In case the amount of provision for bad debts to be set aside this period is greater than the amount set aside from the previous period that has not been fully used, the enterprise shall set aside additional provision for the difference, recording:

Debit account 642 – Business management costs (6426)

Credit account 229 – Provision for asset losses (2293).

– In case the amount of provision for bad debts to be set up this period is less than the amount set up from the previous period that has not been fully used, the enterprise shall reverse the difference and record:

Debit account 229 – Provision for asset losses (2293)

Credit account 642 – Business management costs (6426).

3.8. When setting up provisions for payables (except for provisions for product, goods, and construction warranty) and calculating them into business management expenses, for example, provisions for business restructuring, etc., record:

Debit account 642 – Business management costs

Credit account 352 – Payable provisions.

– In case the amount of provisions for payables to be established at the end of this accounting period is less than the amount of provisions for payables established at the end of the previous accounting period that have not been fully used, the difference will be reversed and recorded as a reduction in expenses, recorded as follows:

Debit account 352 – Provision for payables

Credit account 642 – Business management costs.

3.9. Telephone, electricity, water bills purchased from outside, one-time repair costs of fixed assets with small value, record:

Debit account 642 – Business management costs (6427)

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331, 335,…

3.10. Accounting for costs of periodic repair and maintenance of fixed assets for business management:

– For regular repairs and maintenance, based on relevant documents, record:

Debit account 642 – Business management costs

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112,…

– For periodic repairs and maintenance, based on relevant documents, record:

+ When actual costs of repair and periodic maintenance of fixed assets arise, record:

Debit account 2413 – Periodic repair and maintenance of fixed assets

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331,…

+ When the repair and periodic maintenance of fixed assets is completed and put into use, record:

Debit account 242 – Expenses awaiting allocation

Debit account 133 – Deductible VAT (if any)

Credit account 2413 – Periodic repair and maintenance of fixed assets.

+ Periodically, accountants allocate costs of periodic repair and maintenance of fixed assets to business management costs in each period, recording:

Debit account 642 – Business management costs

Credit account 242 – Expenses awaiting allocation.

3.11. Expenses incurred for conferences, receptions, expenses for female workers, expenses for research, training, association membership fees and other management expenses, record:

Debit account 642 – Business management costs (6428)

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 331,…

3.12. Input VAT related to the business management department is not deductible if it is included in business management expenses, recorded:

Debit account 642 – Business management costs

Credit account 133 – Deductible VAT (1331, 1332).

3.13. For internal consumer products and goods used for management purposes; Products and goods used for display, gifts, and recording:

Debit account 642 – Business management costs

There are accounts 155, 156,…

Credit account 3331 – VAT payable (if any).

3.14. When there are deductions for business management expenses, record:

Debit accounts 111, 112,…

Credit account 642 – Business management costs.

3.15. At the end of the accounting period, transfer the business management costs incurred during the period to Account 911 to determine the business results, record:

Debit account 911 – Determining business results

Credit account 642 – Business management costs.

 

ACCOUNT 711 – OTHER INCOME

1. Accounting principles
2. a) This account is used to reflect other income sources outside of the enterprise’s production and business activities, including:

– Income from sale and liquidation of fixed assets;

– The difference between the fair value of assets divided from BCC is higher than the investment cost of constructing jointly controlled assets;

– Profit difference due to revaluation of materials, goods, fixed assets contributed to joint ventures, investments in subsidiaries, associated companies, other long-term investments,…;

– Income from sale and leaseback of assets;

– Taxes payable when selling goods or providing services but then reduced or refunded;

– Collect fines due to customers violating the contract;

– Collect compensation from third parties to compensate for lost assets (e.g. collect insurance compensation and similar amounts);

– Collect bad debts that have been written off;

– Collecting payable debts of unknown creditors or those determined to be non-debt;

– Customer bonuses related to the consumption of goods, products and services are not included in revenue (if any);

– Income from gifts, donations in cash, in kind, shares, capital contributions at other enterprises,… from organizations and individuals given to enterprises (except for support, sponsorship, donations, and gifts recorded as an increase in the owner’s investment capital according to the decision of the competent authority).

– The value of promotional items is non-refundable;

– Other income besides the above.

1. b) When there is a certain possibility of collecting contract violation fines, the enterprise must consider the nature of the fine to account for it in accordance with the following principles:

– For the seller: All contract breach penalties collected from the buyer outside the contract value are recorded as other income.

– For the buyer: Contract violation fines collected from the seller outside the contract value are recorded as other income, except in the case where the seller violates the contract but the buyer still receives the goods and the seller accepts to deduct the fine from the amount the buyer must pay, then the value of the purchased goods must be recorded at the actual amount payable to the supplier after deducting (-) the contract violation fine received.

1. c) In case an enterprise is sponsored, donated, or given non-monetary assets or shares/stocks/capital contributions without information on their value, the determination of the value of these assets may be based on the market price of the assets or the value assessed by the enterprise’s Asset Valuation Council or a professional valuation organization. The enterprise must explain in its Financial Statements the basis for determining the value of such non-monetary assets.
2. Structure and content of Account 711 – Other income

Debit:

– VAT payable (if any) calculated by the direct method for other income items at enterprises paying VAT calculated by the direct method.

– At the end of the accounting period, transfer other income arising during the period to account 911 to determine business results.

Creditor:

Other income arising during the period.

Account 711 – Other income has no ending balance.

3. Accounting methods for some major economic transactions
4. a) Accounting for fixed asset sale and liquidation transactions:

– Reflects income from liquidation and sale of fixed assets:

Debit accounts 111, 112, 131, 152, 153,… (total payment amount)

Credit account 711 – Other income

Credit account 3331 – VAT payable (33311) (if any).

– Expenses incurred for liquidation and sale of fixed assets, record:

Debit account 811 – Other expenses

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 141, 331,… (total payment amount).

– At the same time, reduce the original price of liquidated and sold fixed assets, record:

Debit account 214 – Depreciation of fixed assets (depreciation value)

Debit account 811 – Other expenses (remaining value)

There are accounts 211, 213

1. b) Accounting for other income arising from re-evaluating materials, goods, and fixed assets invested in subsidiaries, associated companies, and other long-term investments:

– When investing in subsidiaries, joint ventures, associated companies, or other long-term investments in the form of capital contributions in the form of materials and goods, in case the revaluation price of materials and goods is greater than the book value of materials and goods, record:

Debit accounts 221, 222, 228 (revaluation price)

There are accounts 152, 153, 155, 156 (book value)

Credit account 711 – Other income (difference between revaluation price and book value of materials and goods).

– When investing in subsidiaries, joint ventures, associates, or other long-term investments in the form of capital contributions using fixed assets, in case the revaluation value of the fixed assets is greater than the remaining value of the fixed assets, record:

Debit accounts 221, 222, 228 (revaluation value)

Debit account 214 – Depreciation of fixed assets (accumulated depreciation value)

There are accounts 211, 213 (original price)

Credit account 711 – Other income (difference between revaluation value of fixed assets is greater than remaining value of fixed assets).

1. c) Accounting for other income arising from the sale and leaseback of fixed assets as financial leases:

– In case the selling price is higher than the remaining value of the fixed asset, when completing the fixed asset sale procedure, based on the invoice and related documents, record:

Debit accounts 111, 112, 131,… (total payment amount)

Credit account 711 – Other income (remaining value of fixed assets sold and leased back)

Credit account 3387 – Revenue awaiting allocation (difference between selling price greater than remaining value of fixed assets)

Credit account 3331 – VAT payable (if any).

At the same time, record a decrease in fixed assets:

Debit account 811 – Other expenses (remaining value of fixed assets sold and leased back)

Debit account 214 – Depreciation of fixed assets (if any)

Credit account 211 – Tangible fixed assets (original price of fixed assets).

– In case the selling price is lower than the remaining value of the fixed asset, when completing the asset sale procedure, based on the invoice and related documents, record:

Debit accounts 111, 112, 131,… (total payment amount)

Credit account 711 – Other income (fixed asset selling price)

Credit account 3331 – VAT payable (if any).

At the same time, record a decrease in fixed assets:

Debit account 811 – Other expenses (calculated by fixed asset selling price)

Debit account 242 – Expenses awaiting allocation (selling price is less than remaining value of fixed assets)

Debit account 214 – Depreciation of fixed assets (if any)

Credit account 211 – Tangible fixed assets (original price of fixed assets).

– The entries to record leased assets and liabilities for financial leases, and periodic rental payments are made according to the provisions of Account 212 – Financial lease fixed assets.

– In case an enterprise has economic transactions of a similar nature to the transaction of selling the right to purchase assets and committing to lease back those assets from customers in the form of financial lease, the accounting is similar to the transaction of selling and leasing back fixed assets as financial lease.

1. d) Accounting for sale and leaseback transactions of fixed assets as operating leases: When selling and leasing back fixed assets, based on VAT invoices and documents related to the sale of fixed assets, enterprises reflect the sale transactions in the following cases:

– If the sale price is agreed at fair value, any gain or loss must be recognized in the period in which it arises.

Reflecting the revenue from selling fixed assets, record:

Debit accounts 111, 112, 131,…

Credit account 711 – Other income (fixed asset selling price)

Credit account 3331 – VAT payable (if any).

At the same time, record a decrease in fixed assets:

Debit account 811 – Other expenses (calculated by fixed asset selling price)

Debit account 242 – Expenses awaiting allocation (selling price is less than remaining value of fixed assets)

Debit account 214 – Depreciation of fixed assets (if any)

Credit account 211 – Tangible fixed assets (original price of fixed assets).

If the sale and leaseback price of fixed assets is lower than the fair value but the rental price is lower than the market rental price, this loss is not recognized immediately but must be gradually allocated in accordance with the rental payment during the lease term of the asset. Based on the VAT invoice and documents related to the sale of fixed assets, reflecting the income from the sale of fixed assets, record:

Debit accounts 111, 112,… (selling price)

Debit account 242 – Costs awaiting allocation (selling price is less than fair value)

Credit account 711 – Other income (fair value of fixed assets)

Credit account 3331 – VAT payable (if any).

+ At the same time, record a decrease in fixed assets as follows:

Debit account 811 – Other expenses

Debit account 214 – Depreciation of fixed assets (if any)

Credit account 211 – Tangible fixed assets (original price of fixed assets).

+ Periodically, allocate the loss on the sale and leaseback of fixed assets that are operating leases (the difference between the selling price and the fair value) to the production and business expenses of the period in accordance with the lease payments during the period that the asset is expected to be used, record:

Debit accounts 623, 627, 641, 642,…

Credit account 242 – Expenses awaiting allocation.

– If the sale and leaseback price of an asset is higher than its fair value, the difference between the sale price and the fair value is not immediately recognized as a gain in the period but is gradually allocated over the period in which the asset is expected to be used, and the difference between the fair value and the residual value is immediately recognized as a gain in the period.

+ Based on VAT invoice for sale of fixed assets, record:

Debit accounts 111, 112, 131,… (selling price)

Credit account 711 – Other income (calculated by fair value of fixed assets)

Credit account 3387 – Revenue awaiting allocation (difference between selling price higher than fair value of fixed assets)

Credit account 3331 – VAT payable (if any).

At the same time, reduce the value of fixed assets sold and leased back:

Debit account 811 – Other expenses

Debit account 214 – Depreciation of fixed assets (if any)

Credit account 211 – Tangible fixed assets (original price of fixed assets).

+ Periodically, allocate the difference between the selling price higher than the fair value of the sold and leased fixed assets to reduce production and business expenses in the period in accordance with the rental payment during the period that the asset is expected to be used, record:

Debit account 3387 – Revenue awaiting allocation

There are accounts 623, 627, 641, 642,…

– In case an enterprise has economic transactions of a similar nature to the transaction of selling the right to purchase assets and committing to lease back those assets from customers in the form of operating leases, the accounting is similar to the transaction of selling and leasing back fixed assets as operating leases.

1. d) Reflecting fines collected

Debits to related accounts

There are accounts 151, 153, 154, 156, 241, 211… (if the fine is recorded as a reduction in asset value)

Credit account 711 – Other income (if the fine is recorded in other income).

1. e) Reflecting amounts compensated by third parties (such as insurance compensation,…), record:

Debit accounts 111, 112,…

Credit account 711 – Other income.

– Expenses related to handling damages for cases where insurance has been purchased, record:

Debit account 811 – Other expenses

Debit account 133 – Deductible VAT (if any)

There are accounts 111, 112, 152,…

1. g) Accounting for bad debts that have been written off and now recovered:

– If there is a bad debt that is truly uncollectible and must be written off, based on the debt writing off record, record:

Debit account 229 – Provision for asset losses (2293) (if provision has been made)

Debit account 642 – Business management costs (if no provision has been made)

Credit account 131 – Accounts receivable from customers.

– When the bad debt has been written off, record:

Debit accounts 111, 112,…

Credit account 711 – Other income.

1. h) Payable debts whose creditors cannot be identified or have been determined to be unpaid are included in other income, recorded:

Debit accounts 331, 338, 341,…

Credit account 711 – Other income.

1. i) Accounting for taxes payable when selling goods or providing services but then refunded or reduced:

– Upon receiving the decision of the competent authority on the amount of tax to be refunded or reduced, record:

Debit accounts 3331, 3332, 3333, 33381

Credit account 711 – Other income.

– When the State budget returns in cash, record:

Debit accounts 111, 112

There are accounts 3331, 3332, 3333, 33381.

1. k) Accounting for money, materials, goods, fixed assets, shares supported, sponsored, donated by organizations and individuals (except for support, sponsorship, donations recorded as an increase in the owner’s investment capital according to regulations of competent authorities).

– In case the property is supported, sponsored, donated or given without conditions for management, use and control of that property, record:

Debit accounts 111, 112, 152, 153, 156, 211,…

Credit account 711 – Other income.

– In case the assets are supported, sponsored, donated, or given but with conditions for management, use, and control of those assets, the enterprise shall follow the instructions in Account 3387 – Revenue awaiting allocation.

1. l) In case a business with commercial activities receives goods (without payment) from the manufacturer or distributor for advertising and promotion to customers who buy the manufacturer or distributor’s products. When the promotion program ends, if the unused promotional goods do not have to be returned to the manufacturer, the business records other income as the value of the promotional goods that do not have to be returned, recording:

Debit account 156 – Goods (equivalent value of products of the same type)

Credit account 711 – Other income.

1. m) At the end of the accounting period, calculate and reflect the VAT payable by the direct method of other income, record:

Debit account 711 – Other income

Credit account 3331 – VAT payable.

1. n) At the end of the period, transfer other income arising during the period to Account 911 to determine business results, record:

Debit account 711 – Other income

Credit account 911 – Determine business results.

 

ACCOUNT 811 – OTHER EXPENSES

1. Accounting principles
2. a) This account reflects expenses arising from events or transactions separate from the normal operations of businesses. Other expenses of businesses may include:

– Costs of liquidation and sale of fixed assets (including costs of bidding for liquidation activities). The amount of money collected from selling bidding documents for liquidation and sale of fixed assets is recorded as a reduction in costs of liquidation and sale of fixed assets;

– The difference between the fair value of assets divided from BCC is less than the investment cost of constructing jointly controlled assets;

– Remaining value of fixed assets that have been dismantled, relocated, etc.;

– Remaining value of liquidated and sold fixed assets (if any);

– Loss difference due to revaluation of materials, goods, fixed assets contributed as capital to subsidiaries, joint ventures, investments in associated companies, other long-term investments,…;

– Fines payable for breach of economic contracts, administrative fines;

– Other expenses.

1. b) Expenses that are not considered as corporate income tax expenses according to the provisions of the Tax Law but have full invoices and documents and have been accounted for correctly according to the Accounting Regime shall not be recorded as a reduction in accounting expenses but only adjusted in the corporate income tax finalization to increase the amount of corporate income tax payable.
2. Structure and content of Account 811 – Other expenses

Debit:

Other expenses incurred.

Creditor:

At the end of the period, transfer all other expenses incurred during the period to Account 911 – Determining business results to determine business results.

Account 811 has no ending balance.

3. Accounting methods for some major economic transactions
4. a) Accounting for fixed asset sale and liquidation transactions:

– Record other income from sale and liquidation of fixed assets, record:

Debit accounts 111, 112, 131,…

Credit account 711 – Other income

Credit account 3331 – VAT payable (33311) (if any).

– Record decrease in fixed assets used for production and business that have been sold or liquidated, record:

Debit account 214 – Depreciation of fixed assets (accumulated depreciation value)

Debit account 811 – Other expenses (remaining value)

There are accounts 211, 213

– Record expenses incurred for the sale and liquidation of fixed assets, record:

Debit account 811 – Other expenses

Debit account 133 – Deductible VAT (1331) (if any)

There are accounts 111, 112, 141,…

– Record revenue from selling bidding documents related to liquidation and sale of fixed assets, record:

Debit accounts 111, 112, 138…

Credit account 811 – Other expenses.

1. b) When dismantling or moving fixed assets, record:

Debit account 214 – Depreciation of fixed assets (accumulated depreciation value)

Debit account 811 – Other expenses (remaining value)

There are accounts 211, 213

228. c) Accounting for other expenses arising when re-evaluating materials, goods, and fixed assets invested in subsidiaries, joint ventures, and associated companies: Follow the instructions in accounts 221, 222, and 228.
229. d) Accounting for fines due to violations of economic contracts and administrative violations, record:

Debit account 811 – Other expenses

There are accounts 111, 112, 338,…

Credit account 333 – Taxes and amounts payable to the State (3339) (if any).

1. d) At the end of the accounting period, transfer all other expenses incurred during the period to determine business results, record:

Debit account 911 – Determining business results

Credit account 811 – Other expenses.

 

ACCOUNT 821 – CORPORATE INCOME TAX EXPENSES

1. Accounting principles
2. a) General principles

– This account is used to reflect the enterprise’s corporate income tax expense, including current corporate income tax expense and deferred corporate income tax expense arising during the year as the basis for determining the enterprise’s after-tax business performance in the current fiscal year.

– Current corporate income tax expense includes current corporate income tax expense as prescribed by the Law on Corporate Income Tax and additional corporate income tax expense as prescribed by the global minimum tax regulations. In which:

+ Current corporate income tax expense according to the provisions of the Law on Corporate Income Tax is the amount of corporate income tax payable calculated on taxable income in the year and the current corporate income tax rate.

+ Additional corporate income tax expense under the global minimum tax regulations is the amount of corporate income tax that an enterprise must pay additionally to the State budget, determined according to the provisions of the law on global minimum tax. When recording additional corporate income tax expense under the global minimum tax regulations, an enterprise simultaneously records a deferred income tax asset.

– Deferred corporate income tax expense is the amount of corporate income tax that will be payable in the future arising from:

+ Record deferred income tax payable during the year;

+ Reversal of deferred income tax assets recorded from previous years.

– Deferred corporate income tax income is a reduction in deferred corporate income tax expense arising from:

+ Record deferred income tax assets during the year;

+ Reversal of deferred income tax liabilities recorded from previous years.

1. b) Current principles of accounting for corporate income tax expenses

– Every quarter, enterprises base on the corporate income tax declaration to record the amount of corporate income tax temporarily payable into current corporate income tax expense.

At the end of the fiscal year, based on the corporate income tax finalization declaration, if the amount of corporate income tax temporarily payable in the year is less than the amount payable for that year, the enterprise shall record an increase in current corporate income tax expense as the difference between the amount of corporate income tax payable in the year being greater than the amount provisionally paid for that year. In case the amount of corporate income tax temporarily payable in the year is greater than the amount payable for that year, the enterprise shall record a decrease in current corporate income tax expense as the difference between the amount of corporate income tax temporarily payable in the year being greater than the amount payable.

– In case of detecting immaterial errors related to the corporate income tax payable of previous years, the enterprise is allowed to record an increase (or decrease) in the corporate income tax payable of previous years in the current corporate income tax expense of the year in which the error is detected.

– For material errors, enterprises make retroactive adjustments according to the provisions of Vietnamese Accounting Standard No. 29 – Changes in accounting policies, accounting estimates and errors.

– At the end of the accounting period, the enterprise must transfer the current corporate income tax expense arising during the period to account 911 – Determine business results to determine after-tax profit in the accounting period.

1. c) Accounting principles for deferred corporate income tax expenses

– At the end of the accounting period, enterprises must determine deferred income tax expenses according to the provisions of Vietnamese Accounting Standard No. 17 – Corporate Income Tax.

– Enterprises are not allowed to reflect in this account deferred income tax assets or deferred income tax liabilities arising from transactions recorded directly in equity.

– At the end of the accounting period, the enterprise must transfer the difference between the debit and credit amounts of Account 8212 – Deferred corporate income tax expenses to Account 911 – Determining business results.

2. Structure and content of Account 821 – Corporate income tax expense
3. a) General structure and content of reflection

Debit:

– Current corporate income tax expense incurred during the year;

– The current corporate income tax amount of previous years that must be additionally paid due to the discovery of immaterial errors of previous years is recorded as an increase in the corporate income tax expense of the current year;

– Deferred corporate income tax expense arising during the year from the recognition of deferred income tax liabilities (is the difference between deferred income tax liabilities arising during the year greater than deferred income tax liabilities reversed during the year);

– Deferred corporate income tax expense corresponds to the reversal of deferred income tax assets (the difference between deferred income tax assets reversed in the year is greater than deferred income tax assets arising in the year);

– Additional current corporate income tax payable arising during the year under the global minimum tax provisions;

– The current corporate income tax expense payable additionally in the declaration year due to the recorded corporate income tax amount of the year in which the liability arises being less than the corporate income tax amount payable as declared under the global minimum tax regulations;

– Transfer the difference between the amount arising during the period of the credit side of Account 8212 greater than the amount arising during the period of the debit side of Account 8212 to the credit side of Account 911 – Determine business results.

Creditor:

– The actual current corporate income tax payable in the year is less than the current corporate income tax provisionally payable, deducted from the current corporate income tax expense recorded in the year;

– The current corporate income tax payable in the current year is reduced due to the discovery of immaterial errors in previous years;

– Record a reduction in deferred corporate income tax expense corresponding to the recognition of deferred income tax assets (the difference between deferred income tax assets arising in the year is greater than deferred income tax assets reversed in the year);

– Record a reduction in deferred corporate income tax expense corresponding to the reversal of deferred corporate income tax payable (the difference between deferred corporate income tax payable reversed in the year is greater than deferred corporate income tax payable arising in the year);

– Record a reduction in current corporate income tax expense of the declaration year because the recorded amount of the year in which the liability arises is greater than the amount payable according to the declaration under the global minimum tax regulations;

– Transfer the difference between the current corporate income tax expense arising in the year greater than the amount recorded as a reduction in current corporate income tax expense in the year to Account 911 – Determining business results;

– Transfer the difference between the amount arising in the period of the Debit side of account 8212 greater than the amount arising in the period of the Credit side of account 8212 to the Debit side of account 911 – Determine business results.

Account 821 – Corporate income tax expense has no ending balance.

Account 821 – Corporate income tax expense has 2 sub-accounts:

– Account 8211 – Current corporate income tax expense, includes 2 level 3 accounts:

+ Account 82111 – Current corporate income tax expense according to the provisions of the Law on Corporate Income Tax

+ Account 82112 – Additional corporate income tax expense under global minimum tax regulations

+ Account 8212 – Deferred corporate income tax expense;

1. b) Structure and content of Account 8211 – Current corporate income tax expense

Debit:

– The amount of corporate income tax payable is included in the current corporate income tax expense arising during the year;

– The additional corporate income tax payable from previous years due to the discovery of immaterial errors from previous years is recorded as an increase in current corporate income tax expense of the current year;

– The amount of corporate income tax arising in the year must be additionally paid according to the regulations on global minimum tax;

– Adjust to increase the current corporate income tax expense payable additionally in the declaration year because the recorded amount of the year in which the obligation arises is less than the amount payable according to the declaration under the global minimum tax regulations;

Creditor:

– The actual current corporate income tax payable in the year is less than the provisional corporate income tax payable, deducted from the current corporate income tax expense recorded in the year;

– The amount of corporate income tax payable that is reduced due to the discovery of immaterial errors in previous years is recorded as a reduction in current corporate income tax expense in the current year;

– Adjust to reduce the current corporate income tax expense for the declaration year (if any) because the recorded amount of the year in which the obligation arises is greater than the amount payable according to the declaration under the global minimum tax regulations;

– Transfer current corporate income tax expenses to the Debit side of Account 911 – Determine business results.

Account 8211 – Current corporate income tax expense has no ending balance.

1. c) Structure and content of Account 8212 – Deferred corporate income tax expense

Debit:

– Deferred corporate income tax expense arising during the year from the recognition of deferred income tax liabilities (is the difference between deferred income tax liabilities arising during the year greater than deferred income tax liabilities reversed during the year);

– The amount of deferred income tax assets reversed from previous years (is the difference between deferred income tax assets reversed in the year and deferred income tax assets arising in the year);

– Transfer the difference between the amount arising during the period of the credit side of Account 8212 greater than the amount arising during the period of the debit side of Account 8212 to the credit side of Account 911 – Determine business results.

Creditor:

– Record a reduction in deferred corporate income tax expense corresponding to the recognition of deferred income tax assets (the difference between deferred income tax assets arising in the year is greater than deferred income tax assets reversed in the year);

– Record a reduction in deferred corporate income tax expense corresponding to the reversal of deferred corporate income tax payable (the difference between deferred corporate income tax payable reversed in the year is greater than deferred corporate income tax payable arising in the year);

– Transfer the difference between the amount arising on the credit side of Account 8212 – Deferred corporate income tax expense is less than the amount arising on the debit side of Account 8212 – Deferred corporate income tax expense arising during the period to the debit side of Account 911 – Determining business results.

Account 8212 – Deferred corporate income tax expense has no ending balance.

3. Accounting methods for some major economic transactions

3.1. Current method of accounting for corporate income tax expenses

– Every quarter, enterprises reflect the current corporate income tax amount temporarily payable to the State budget (excluding additional corporate income tax expenses as prescribed by the global minimum tax law), recording:

Debit account 8211 – Current corporate income tax expense

Credit account 3334 – Corporate income tax.

When paying corporate income tax to the state budget, record:

Debit account 3334 – Corporate income tax

There are accounts 111, 112,…

– At the end of the fiscal year, based on the actual corporate income tax payable according to the tax finalization declaration or the tax amount notified by the tax authority to be paid (excluding additional corporate income tax expenses as prescribed by the global minimum tax law):

+ If the actual corporate income tax payable in the year is greater than the provisional corporate income tax payable, the enterprise shall additionally reflect the current corporate income tax payable, recording:

Debit account 8211 – Current corporate income tax expense

Credit account 3334 – Corporate income tax.

+ If the actual corporate income tax payable in the year is less than the provisional corporate income tax payable, the enterprise shall reduce current corporate income tax expense, recording:

Debit account 3334 – Corporate income tax

Credit account 8211 – Current corporate income tax expense.

– In case of discovering immaterial errors of previous years related to corporate income tax payable of previous years, the enterprise is allowed to record an increase (or decrease) in the amount of corporate income tax payable of previous years in the current income tax expense of the year in which the error is discovered.

+ In case of recording an increase in current corporate income tax expense of the current year, record:

Debit account 8211 – Current corporate income tax expense

Credit account 3334 – Corporate income tax.

+ In case of being allowed to reduce current corporate income tax expense in the current year, record:

Debit account 3334 – Corporate income tax

Credit account 8211 – Current corporate income tax expense.

– At the end of the accounting period, transfer current income tax expenses, record:

+ If the debit amount of account 8211 is greater than the credit amount, record the difference:

Debit account 911 – Determining business results

Credit account 8211 – Current corporate income tax expense.

+ If the debit amount of account 8211 is smaller than the credit amount, record the difference:

Debit account 8211 – Current corporate income tax expense

Credit account 911 – Determine business results.

3.2. Accounting method for additional corporate income tax expense under the global minimum tax rules

1. a) For enterprises that are constituent units responsible for declaration:

– The reporting unit must record the additional corporate income tax amount according to the global minimum tax regulations and allocate the tax amount to the reporting units (the allocation criteria are chosen by the enterprise to suit the characteristics and management requirements of the unit but must ensure consistency according to the provisions of accounting standards), record:

Debit account 82112 – Additional corporate income tax expense according to global minimum tax regulations (corresponding to the obligation of the constituent unit responsible for declaration)

Debit account 1388 – Other receivables (corresponding to the obligations of the constituent units not responsible for declaration)

Credit account 3334 – Corporate income tax.

At the same time, the constituent unit is responsible for declaring and recording deferred income tax assets corresponding to the estimated portion of the additional corporate income tax expense obligation under the unit’s global minimum tax regulations:

Debit account 243 – Deferred income tax assets

Credit account 8212 – Deferred corporate income tax expense.

– When the constituent unit declares additional corporate income tax according to the global minimum tax regulations according to the additional corporate income tax declaration:

+ If the actual additional corporate income tax payable in the declaration year is greater than the recorded additional corporate income tax, the enterprise shall reflect the additional corporate income tax payable in the declaration year, recording:

Debit account 82112 – Additional corporate income tax expense according to global minimum tax regulations (additional amount payable in the declaration year corresponding to the obligation of the constituent unit responsible for declaration)

Debit account 1388 – Other receivables (additional payable amount in the declaration year corresponding to the obligations of the constituent units not responsible for declaration)

Credit account 3334 – Corporate income tax.

+ If the actual additional corporate income tax payable in the declaration year is less than the recorded additional corporate income tax, the enterprise shall reduce the additional corporate income tax payable in the declaration year, recording:

Debit account 3334 – Corporate income tax

Credit account 82112 – Additional corporate income tax expense according to global minimum tax regulations (additional corporate income tax is deducted in the declaration year corresponding to the obligation of the constituent unit responsible for declaration)

Credit account 1388 – Other receivables (additional corporate income tax amount is recorded as a reduction in the declaration year corresponding to the obligations of the constituent units not responsible for declaration).

– When the reporting unit receives a payment of additional corporate income tax due to non-declaring components, based on relevant documents, record:

Debit account 111, 112,…

Credit account 1388 – Other receivables

+ When a business pays tax to the state budget, record:

Debit account 3334 – Corporate income tax

There are accounts 111, 112,…

At the same time, the enterprise reverses previously recorded deferred income tax assets, recording:

Debit account 8212 – Deferred corporate income tax expense

Credit account 243 – Deferred income tax assets.

1. b) For enterprises that are constituent units not responsible for declaration:

– When notified of the additional corporate income tax payable under the global minimum tax provisions allocated from the reporting entity, record:

Debit account 82112 – Additional corporate income tax expense according to global minimum tax regulations

Credit account 3388 – Other payables.

At the same time, the constituent unit is not responsible for declaring and recording deferred income tax assets corresponding to the estimated portion of the additional corporate income tax expense obligation under the unit’s global minimum tax regulations:

Debit account 243 – Deferred income tax assets

Credit account 8212 – Deferred corporate income tax expense.

– When the enterprise pays money to the reporting unit, record:

Debit account 3388 – Other payables

There are accounts 111, 112,…

– At the end of the accounting period, transfer additional corporate income tax expenses according to the regulations on global minimum tax, record:

Debit account 911 – Determining business results

Credit account 8211 – Current corporate income tax expense.

3.3. Deferred corporate income tax expense accounting method

– Deferred corporate income tax expense arising in the year from the recognition of deferred income tax payable (the difference between deferred income tax payable arising in the year being greater than deferred income tax payable reversed in the year), recorded:

Debit account 8212 – Deferred corporate income tax expense

Credit account 347 – Deferred income tax payable.

– Deferred corporate income tax expense arising in the year from the reversal of deferred income tax assets recorded from previous years (is the difference between deferred income tax assets reversed in the year being greater than deferred income tax assets arising in the year), recorded:

Debit account 8212 – Deferred corporate income tax expense

Credit account 243 – Deferred income tax assets.

– Record a decrease in deferred corporate income tax expense (the difference between the deferred income tax asset arising in the year is greater than the deferred income tax asset reversed in the year), record:

Debit account 243 – Deferred income tax assets

Credit account 8212 – Deferred corporate income tax expense.

– Record a decrease in deferred corporate income tax expense (the difference between deferred income tax payable reversed in the year is greater than deferred income tax payable arising in the year), record:

Debit account 347 – Deferred income tax payable

Credit account 8212 – Deferred corporate income tax expense.

– At the end of the accounting period, transfer the difference between the debit and credit amounts of account 8212:

+ If account 8212 has a larger debit amount than a credit amount, the difference is recorded as:

Debit account 911 – Determining business results

Credit account 8212 – Deferred corporate income tax expense.

+ If the debit amount of account 8212 is smaller than the credit amount, the difference is recorded as:

Debit account 8212 – Deferred corporate income tax expense

Credit account 911 – Determine business results.

 

ACCOUNT 911 – DETERMINING BUSINESS RESULTS

1. Accounting principles
2. a) This account is used to determine and reflect the business performance and other activities of an enterprise in an accounting period. The business performance of an enterprise includes: Production and business performance; Financial performance and other performance.

– The result of production and business activities is the difference between net revenue and cost of goods sold, selling expenses and business management expenses.

– Financial performance is the difference between financial revenue and financial expenses.

– Other operating results are the difference between other income and other expenses and corporate income tax expense.

1. b) This account must fully and accurately reflect the business performance results of the accounting period. Depending on the characteristics of the business production activities and the management requirements of the enterprise, detailed accounting must be done for each type of activity (for example, production, processing, commercial and service activities, financial activities, etc.). For each type of business activity, detailed accounting can be done for each type of product, each industry, each type of service.
2. c) The revenues and incomes transferred to this account are net revenues and net incomes.
3. Structure and content of Account 911 – Determining business results

Debit:

– Carry over the cost of products, goods and services sold;

– Carry forward the difference between the selling price being less than the remaining value and the cost of selling and liquidating the investment real estate;

– Carry forward financial expenses, sales expenses, business management expenses and other expenses;

– Carry forward corporate income tax expenses;

– Interest transfer.

Creditor:

– Carry forward net revenue from products, goods and services sold during the period;

– Transfer the difference between the selling price greater than the remaining value and the cost of selling and liquidating the investment real estate;

– Carry forward financial revenue and other income;

– Loss carryover.

Account 911 has no ending balance.

3. Accounting methods for some major economic transactions
4. a) At the end of the accounting period, transfer net sales revenue and real estate sales revenue to Account 911 to determine business results, record:

Debit account 511 – Sales revenue and service provision

Credit account 911 – Determine business results.

1. b) Carry forward the cost of products, goods and services consumed during the period, costs related to investment real estate business activities, such as depreciation costs, repair and upgrade costs, operating lease costs, residual value and liquidation costs of investment real estate, record:

Debit account 911 – Determining business results

Credit account 632 – Cost of goods sold.

1. c) At the end of the accounting period, transfer the sales expenses incurred during the period, record:

Debit account 911 – Determining business results

Credit account 641 – Sales expenses.

1. d) At the end of the accounting period, transfer the business management costs incurred during the period, record:

Debit account 911 – Determining business results

Credit account 642 – Business management costs.

1. d) At the end of the accounting period, transfer financial revenue and other income, record:

Debit account 515 – Financial activity revenue

Debit account 711 – Other income

Credit account 911 – Determine business results.

1. e) At the end of the accounting period, transfer financial expenses and other expenses, record:

Debit account 911 – Determining business results

Credit account 635 – Financial expenses

Credit account 811 – Other expenses.

1. g) At the end of the accounting period, transfer current corporate income tax expenses, record:

Debit account 911 – Determining business results

Credit account 8211 – Current corporate income tax expense.

1. h) At the end of the accounting period, transfer the difference between the debit and credit amounts to Account 8212 – Deferred income tax expense:

– If the debit balance is greater than the credit balance of Account 8212, transfer the difference and record:

Debit account 911 – Determining business results

Credit account 8212 – Deferred income tax expense.

– If the Debit amount of Account 8212 is less than the Credit amount of Account 8212, then transfer the difference and record:

Debit account 8212 – Deferred corporate income tax expense

Credit account 911 – Determine business results.

1. i) Transferring business results during the period to undistributed profit after tax:

– Transferring interest, record:

Debit account 911 – Determining business results

Credit account 421 – Undistributed profit after tax.

– Carry forward losses, record:

Debit account 421 – Undistributed profit after tax

Credit account 911 – Determine business results.

1. k) Periodically, the affiliated unit is assigned to monitor the business results of the period but does not monitor the undistributed profit after tax to transfer the business results of the period to the enterprise:

– Transferring interest, record:

Debit account 911 – Determining business results

Credit account 336 – Internal payables.

– Carry forward losses, record:

Debit account 336 – Internal payables

Credit account 911 – Determine business results.

 

APPENDIX IV

SECTION 1

FINANCIAL REPORT FORM

(Attached to Circular No. 99/2025/TT-BTC dated October 27, 2025 of the Minister of Finance)

1. The annual financial statement of the enterprise meets the going concern assumption.

Reporting unit : ………………………. Address: …………………………………

Form No. B 01 – DN (Attached to Circular No. 99/2025/TT-BTC dated 27 October 2025 of the Minister of Finance)

 

FINANCIAL STATEMENT

On the date… month… year… ( 1 )

(Applies to businesses that meet the going concern assumption)

Unit: …………

ASSET	Code​	Explanation	Year -end number (3)	Beginning of year number (3)
1	2	3	4	5
A – SHORT-TERM ASSETS	100
I. Cash and cash equivalents	110
1. Money	111
2. Cash equivalents	112
II. Short-term financial investments	120
1. Trading securities	121
2. Provision for decline in value of trading securities (*)	122		(…)	(…)
3. Short-term held-to-maturity investments	123
4. Short-term held-to-maturity investment provision (*)	124		(…)	(…)
5. Other short-term investments	125
6. Provision for losses on other short-term investments (*)	126		(…)	(…)
III. Short-term receivables	130
1. Short-term receivables from customers	131
2. Short-term prepayment to seller	132
3. Short-term internal receivables	133
4. Receivable according to construction contract progress	134
5. Other short-term receivables	135
6. Provision for short-term doubtful receivables (*)	136		(…)	(…)
7. Assets missing pending settlement	137
IV. Inventory	140
1. Inventory	141
2. Provision for inventory price reduction (*)	142		(…)	(…)
Short-term biological assets	150
1. Short-term one-time product-producing animals	151
2. Seasonal crops or short- term one-time products	152
3. Short-term biological asset loss provision (*)	153		(…)	(…)
VI. Other short-term assets	160
Short- term pending allocation costs	161
2. Deductible VAT	162
3. Taxes and other amounts receivable from the State	163
4. Government bond repurchase transactions	164
Other short- term assets	165
B – LONG-TERM ASSETS	200
Long- term receivables	210
1. Long-term receivables from customers	211
2. Long-term prepayment to the seller	212
3. Business capital in affiliated units	213
4. Long-term internal receivables	214
5. Other long-term receivables	215
6. Provision for long-term doubtful receivables (*)	216		(…)	(…)
II. Fixed assets	220
1. Tangible fixed assets	221
– Original price	222
Accumulated depreciation value (*)	223		(…)	(…)
Financial leased fixed assets	224
– Original price	225
– Accumulated depreciation value (*)	226		(…)	(…)
3. Intangible fixed assets	227
– Original price	228
– Accumulated depreciation value (*)	229		(…)	(…)
III. Long-term biological assets	230
1. Livestock for periodic production	231
a) Livestock for periodic production that have not yet reached maturity	232
b) Livestock that periodically produces products until maturity	233
– Original price	234
– Accumulated depreciation value (*)	235		(…)	(…)
2. Livestock for long-term one-time product collection	236
3. Seasonal crops or long-term one-time products	237
4. Provision for long-term loss of biological assets (*)	238		(…)	(…)
IV. Investment real estate	240
– Original price	241
Accumulated depreciation value (*)	242		(…)	(…)
V. Long-term unfinished assets	250
1. Long-term unfinished production and business costs	251
2. Cost of unfinished basic construction	252
VI. Long-term financial investment	260
1. Investment in subsidiaries	261
2. Investment in joint ventures and associates	262
3. Investing capital in other units	263
4. Provision for long-term investment losses in other entities (* )	264		(…)	(…)
5. Long-term held-to-maturity investments	265
Long-term held-to-maturity investment provision ( *)	266		(…)	(….)
Other long- term assets	270
1. Long-term deferred expenses	271
2. Deferred income tax assets	272
3. Long-term replacement equipment, materials and spare parts	273
4. Other long-term assets	274
TOTAL ASSETS (280 = 100 + 200)	280
C – LIABILITIES PAYABLE	300
I. Short-term debt	310
1. Short-term payables to suppliers	311
2. Short-term prepayment by the buyer	312
3. Must pay dividends and profits	313
short- term State payments	314
5. Must pay employees	315
Short-term payable expenses	316
7. Short-term internal payables	317
8. Payable according to progress of short-term construction contract	318
9. Short-term revenue pending allocation	319
10. Other short-term payables	320
11. Short-term loans and financial leases	321
12. Short-term payables provision	322
13. Reward and welfare fund	323
Price stabilization fund	324
Government bond repurchase transactions	325
II. Long-term debt	330
1. Long-term payables to suppliers	331
Long-term prepayment by buyer	332
3. Taxes and long-term payments to the State	333
4. Long-term payable expenses	334
5. Internal payables on working capital	335
6. Long-term internal payables	336
7. Long-term revenue pending allocation	337
8. Other long-term payables	338
9. Long-term loans and financial leases	339
10. Convertible bonds	340
11. Preferred shares	341
12. Deferred income tax payable	342
13. Long-term payable provisions	343
14. Science and Technology Development Fund	344
D – EQUITY	400
1. Owner’s equity	411
– Common shares with voting rights	41 1 a
– Preferred shares	41 1 b
2. Capital surplus	412
3. Bond conversion option	413
4. Other owners’ capital	414
5. Own shares repurchased (*)	415		(…)	(…)
6. Difference in asset revaluation	416
7. Exchange rate differences	417
8. Development investment fund	418
9. Other equity funds	419
Undistributed profit after tax	420
– Undistributed net profit accumulated to the end of the previous period	420a
– Undistributed profit after tax this period	420b
CAPITAL (440 = 300 + 400)	440

 

		Approved, date… month… year…
FOUNDER	CHIEF ACCOUNTANT	LEGAL REPRESENTATIVE
(Signature, full name)	(Signature, full name)	(Signature, full name, seal)

Note:

( 1 ) Indicators without data are exempted from presentation but the indicator “Code” must not be re- numbered.

(2) Data in indicators marked with an asterisk (*) are recorded in negative numbers in parentheses (…).

(3) For enterprises whose accounting period is calendar year (X), the “End of year number ” can be recorded as is “31.12. X”; “ First number of the year” can be written as “01.01 .X ”.

 

The company’s financial statements do not meet the going concern assumption.

Reporting unit : ………………………. Address: …………………………………

Form No. B 01 – DNKLT (Attached to Circular No. 99/2025/TT-BTC dated 27 October 2025 of the Minister of Finance)

 

FINANCIAL STATEMENT

On the date…month … year … ( 1 )

(Applies to businesses that do not meet the going concern assumption )

Unit: ………….

ASSET	Code​	Explanation	Year-end number (3)	Beginning of year number (3)
1	2	3	4	5
A – ASSET	100
I. Cash and cash equivalents	110
1. Money	111
2. Cash equivalents	112
II. Financial investment	120
1. Trading securities	121
2. Investment held to maturity	122
3. Investment in subsidiaries	123
4. Investment in joint ventures and associates	124
5. Investing capital in other units	125
III. Accounts receivable	130
1. Accounts receivable from customers	131
2. Prepayment to the seller	132
3. Business capital in affiliated units	133
4. Internal receivables	134
5. Receivable according to construction contract progress	135
6. Other receivables	136
7. Assets missing pending settlement	137
IV. Inventory	140
V. Fixed assets	150
1. Tangible fixed assets	151
2. Financial leased fixed assets	152
3. Intangible fixed assets	153
VI. Biological assets	160
1. Livestock for periodic production	161
2. Livestock that takes products once	162
3. Seasonal crops or one-time products	163
VI. Investment real estate	170
VII. Cost of unfinished basic construction	180
VIII . Other assets	190
1. Costs awaiting allocation	191
2. Deductible VAT	192
3. Taxes and other amounts receivable from the State	193
4. Government bond repurchase transactions	194
5. Deferred income tax assets	195
6. Other assets	196
B – DEBT PAYABLE	300
1. Payable to seller	311
2. Buyer pays in advance	312
3. Must pay dividends and profits	313
4. Taxes and amounts payable to the State	314
5. Must pay employees	315
6. Expenses payable	316
7. Internal payables on working capital	317
8. Other internal payables	318
9. Payable according to construction contract progress	319
10. Revenue awaiting allocation	320
11. Other payables	321
12. Loans and financial leases	322
Convertible bonds	323
14. Preferred shares	324
15. Deferred income tax payable	325
16. Provisions for payables	326
17. Reward and welfare fund	327
18. Science and Technology Development Fund	328
Price stabilization fund	329
20. Government bond repurchase transactions	330
C – EQUITY	400
1. Owner’s equity – Common shares with voting rights – Preferred shares	411 41 1 a 41 1 b
2. Capital surplus	412
3. Bond conversion option​	413
4. Other owners’ capital	414
Own shares repurchased (*)	415		(…)	(…)
Development investment fund	416
7. Other equity funds	417
8. Undistributed profit after tax	418
– Undistributed net profit accumulated to the end of the previous period	418a
– Undistributed profit after tax this period	418b
CAPITAL (440 = 300 + 400)	440

 

		Approved, date… month… year…
FOUNDER	CHIEF ACCOUNTANT	LEGAL REPRESENTATIVE
(Signature, full name)	(Signature, full name)	(Signature, full name, seal)

Note:

( 1 ) Indicators without data are exempted from presentation but the indicator “Code” must not be re-typed .

(2) Data in the Indicators marked with an asterisk (*) are recorded in negative numbers in parentheses (…) .

(3) For enterprises whose accounting period is calendar year (X), the “Ending number” can be recorded as “3 1.1 2.X”; ” Beginning number” can be recorded as “01 . 01. X” .

 

3. Annual business performance report

Reporting unit : ………………………. Address: …………………………………

Form B02 – DN ( Attached to Circular No. 99/2025/TT-BTC dated 27 October 2025 of the Minister of Finance)

 

BUSINESS PERFORMANCE REPORT

Accounting period from date…. to date….

Unit: ………..

TARGETS	Code​	Explanation​	This year	Last year
1	2	3	4	5
1. Sales and service revenue	01
2. Revenue deductions	02
3. Net revenue from sales and service provision (10 = 01 – 02)	10
4. Cost of goods sold	11
5. Gross profit from sales and service provision (20 = 10-11)	20
6. Profit/loss from sale and liquidation of investment real estate	21
7. Financial revenue	22
8. Financial costs	23
– Including : Borrowing costs	24
9. Selling expenses	25
10. Business management costs	26
11. Net profit from business activities {30 = 20 +21 + 22 – (23 + 25 + 26) }	30
12. Other income	31
13. Other expenses	32
14. Other profits (40 = 31 – 32)	40
15. Total accounting profit before tax (50 = 30 + 40)	50
Current corporate income tax expense	51
17. Deferred corporate income tax expense	52
18. Profit after corporate income tax (60 = 50 – 51 – 52)	60
19. Basic earnings per share (*)	70
20. Declining earnings per share (*)	71

 

(*) Only applicable to joint stock companies		Approved, date… month… year…
FOUNDER	CHIEF ACCOUNTANT	LEGAL REPRESENTATIVE
(Signature, full name)	(Signature, full name)	(Signature, full name, seal)

 

Annual cash flow statement

Reporting unit : ………………………. Address: …………………………………

Form No. B 03 – DN (Attached to Circular No. 99/2025/TT-BTC dated 27 October 2025 of the Minister of Finance)

 

CASH FLOW STATEMENT

(By direct method) (*)

Accounting period from date …. to date …..

Unit: ……..

Indicators	Code number	Explanation​	Year now	Year before
1	2	3	4	5
I. Cash flow from operating activities
1. Revenue from sales, services and other revenues	01
2. Payments to suppliers of goods and services	02		(…)	(…)
3. Money paid to workers	03		(…)	(…)
4. Borrowing costs paid	04		(…)	(…)
5. Corporate income tax paid	05		(…)	(…)
6. Other revenue from business activities	06
7. Other expenses for business operations	07		(…)	(…)
Net cash flow from operating activities	20
Cash flow from investing activities
1. Money spent on purchasing and constructing fixed assets and other long-term assets	21		(…)	(…)
2. Proceeds from liquidation and sale of fixed assets and other long-term assets	22
3. Money spent on lending and purchasing debt instruments of other entities	23		(…)	(…)
4. Money recovered from loans and resale of debt instruments of other entities	24
5. Money spent on investment in other entities	25		(…)	(…)
6. Proceeds from capital investment in other entities	26
7. Interest income, dividends and profits distributed	27
Net cash flow from investing activities	30
Cash flow from financial activities
1. Proceeds from issuing shares and receiving capital contributions from owners	31
2. Money to return capital to owners, buy back issued shares	32		(…)	(…)
3. Proceeds from borrowing	33
4. Loan principal repayment	34		(…)	(…)
5. Principal repayment of financial lease	35		(…)	(…)
6. Dividends and profits paid to owners	36		(…)	(…)
cash flow from financing activities	40
cash flow during the period (50 = 20+30+40)	50
Cash and cash equivalents at the beginning of the period	60
Impact of foreign exchange rate changes​	61
Cash and cash equivalents at the end of the period (70 = 50+60+61)	70

Note: Enterprises do not have to present indicators without data , but must not re-enter the “Code” of the indicator .

 

		Approved, date… month… year…
FOUNDER	CHIEF ACCOUNTANT	LEGAL REPRESENTATIVE
(Signature, full name)	(Signature, full name)	(Signature, full name, seal)

 

Reporting unit : ………………………. Address: …………………………………

Form B03 – DN ( Attached to Circular No. 99/2025/TT-BTC dated 27 October 2025 of the Minister of Finance)

 

CASH FLOW STATEMENT

indirect method ) (*)

Accounting period from date… to date….

Unit: …….

Indicators	Code number	Theory bright	Year now	Year before
1	2	3	4	5
I. Cash flow from operating activities
1. Profit before tax	01
2. Adjustments for the amounts
– Depreciation of fixed assets and investment real estate	02
– Provisions	03
Exchange rate difference gains and losses due to revaluation of foreign currency items	04
– Profits and losses from investment and financial activities	05
– Borrowing costs	06
– Other adjustments	07
3. Profit from business operations before capital changes mobile​	08
– Increase, decrease in receivables	09
– Increase, decrease inventory	10
– Increase, decrease in payables (excluding interest payable, corporate income tax payable)	11
– Increase, decrease the cost waiting for allocation	12
– Increase, decrease of trading securities	13
– Borrowing costs paid	14
– Corporate income tax paid	15
– Other income from business activities	16
– Other expenses for business operations	17
Net cash flow from operating activities	20
Cash flow from investing activities
1. Money spent on purchasing and constructing fixed assets and other long-term assets	21
2. Proceeds from liquidation and sale of fixed assets and other long-term assets	22
3. Money spent on lending and purchasing debt instruments of other entities	23
4. Loan recovery, resale of debt instruments of other units	24
5. Money spent on investment in other entities	25
6. Proceeds from capital investment in other entities	26
7. Interest income, dividends and profits distributed	27
Net cash flow from investing activities	30
III. Cash flow from financial activities
1. Proceeds from issuing shares and receiving capital contributions from owners	31
2. Money to return capital to owners, buy back issued shares	32
3. Proceeds from borrowing	33
4. Loan principal repayment	34
5. Principal repayment of financial lease	35
6. Dividends and profits paid to owners	36
Net cash flow from financing activities	40
Net cash flow during the period (50 = 20+30+40)	50
Cash and cash equivalents at the beginning of the period	60
Impact of foreign exchange rate changes	61
Cash and cash equivalents at the end of the period (70 = 50+60+61)	70

Note: Enterprises do not have to present indicators without data, but must not re-enter the “Code ” of the indicator.

 

		Approved, date… month… year…
FOUNDER	CHIEF ACCOUNTANT	LEGAL REPRESENTATIVE
(Signature, full name)	(Signature, full name)	(Signature, full name, seal)

 

5. Explanatory note to the annual financial statements of the enterprise meeting the going concern assumption

Reporting unit : ………………………. Address: …………………………………

Form No. B09 – DN (Attached to Circular No. 99/2025/TT-BTC dated 27 October 2025 of the Minister of Finance)

 

NOTES TO THE FINANCIAL STATEMENTS

Year ….(1)

1. Characteristics of business operations
2. Form of capital ownership.
3. Business field.
4. Business lines
5. Normal production and business cycle.
6. Characteristics of the business’s operations during the fiscal year that affect the financial statements.
7. Corporate structure

– List of subsidiaries;

– List of joint ventures and associated companies;

– List of affiliated units.

7. Number of employees at the end of the fiscal year or average number of employees during the fiscal year.
8. Statement on the comparability of information on Financial Statements: In case the Financial Statements are not comparable, it is necessary to clearly explain and justify the reasons for the incomparability between the information of the reporting period and the information of the comparison period on the Notes to the Financial Statements of the enterprise.
9. Explain other information on the Financial Statements according to relevant legal regulations such as corporate law, securities law,…
10. Accounting period, currency used in accounting
11. Annual accounting period ( starting from…./…./…. ending on …./…../…. ).
12. Currency used in accounting. In case of any change in the currency used in accounting compared to the previous year , clearly explain the reason and impact of the change.

III. Applicable Accounting Standards and Regimes

1. Applicable accounting regime
2. Declaration on compliance with Vietnamese Accounting Standards and Accounting Regime
3. Accounting policies, accounting estimates and relevant applicable legal regulations
4. Principles for converting Financial Statements prepared in foreign currency to Vietnamese Dong (In case the accounting currency is different from Vietnamese Dong); Impact (if any) due to converting Financial Statements from foreign currency to Vietnamese Dong.
5. Types of exchange rates applied in accounting

exchange rate is applied when accounting for exchange rate differences arising during the period and the exchange rate when revaluing foreign currency-based monetary items;

– Cross-transaction exchange rate for cases where the bank does not publish the foreign currency exchange rate;

announced by the State Bank or the reference purchase price of the unit licensed to trade in gold according to the law to be used when re-evaluating monetary gold at the end of the accounting period.

3. Principle of determining the real interest rate (effective interest rate) used to discount cash flows.
4. Principles of recording cash and cash equivalents.
5. Principles of accounting for financial investments
6. a) Trading securities;
7. b) Investments held to maturity;
8. c) Investment in subsidiaries; joint ventures and associates;
9. d) Investment in other units;
10. d) Accounting methods for other transactions related to financial investments.
11. Principles of accounting for receivables

An enterprise shall disclose its accounting policies relating to receivables and the significant estimates used in its policy on allowance for doubtful debts.

7. Principles of inventory accounting

– Principles of inventory recording;

– Method of calculating inventory value;

– Inventory accounting method;

– Method of setting up provisions for inventory price reduction;

– Raw material and material allocation criteria.

– Accounting policies relating to inventories for high risk contracts.

8. Principles of accounting and depreciation of tangible fixed assets (including perennial plants for periodic products, working animals), intangible fixed assets, financial leased fixed assets, and investment real estate.
9. Principles of accounting for biological assets.
10. Accounting principles for types of business cooperation contracts.
11. Principles of accounting for pending allocation costs.

Accounting principles for payables to vendors.

13. Accounting principles for dividends and profits.
14. Principles of recording payable expenses.
15. Principles for recording revenue pending allocation.
16. Accounting principles for payable provisions.
17. Accounting principles for deferred corporate income tax.
18. Principles for recording loans and financial lease debts.

borrowing costs .

20. Principles of recording convertible bonds .
21. Principles of recording equity:

– Principles for recording owners’ capital contributions, capital surplus, convertible bond options, and other owners’ capital;

– Principles for recording differences in asset revaluation;

– Principles of recording exchange rate differences;

– Principles for recording undistributed profits.

22. Principles and methods of recording revenue and other income:

– Sales revenue and service provision

+ Sales revenue.

+ Service revenue.

+ Construction contract revenue.

+ Revenue from sales of real estate such as tourist apartments , offices combined with accommodation or similar products.

+ Revenue from sales of investment real estate.

– Financial revenue;

– Other income.

23. Accounting principles for revenue deductions.
24. Principles of accounting for cost of goods sold.
25. Principles of financial cost accounting.
26. Principles of accounting for sales costs and business management costs.
27. Accounting principles for sale and liquidation of fixed assets and investment real estate.
28. Principles and methods of recording current corporate income tax expenses (including additional corporate income tax expenses under global minimum tax regulations), deferred corporate income tax expenses.
29. Other accounting principles and methods.
30. Additional information for items presented in the Statement of Financial Position

Unit: ………

1. Cash and cash equivalents

Cash and cash equivalents that the enterprise is holding but not restricted in use	End of the year	Beginning of the year
– Cash​	…	…
– Non-term deposits	…	…
– Money is transferring	…	…
Cash equivalents	…	…
Add	…	…

– Detailed explanation of the balance of non-term deposits by each bank accounting for 10% of the total balance of non-term deposits;

– Detailed explanation of the content, term, and balance of each item classified as cash equivalents of the enterprise (details of each type accounting for 10% of the total cash equivalent value).

2. Financial investments
3. a) Trading securities

Indicators	End of the year			Beginning of the year
	Original price	Fair value	Reserve value	Original price	Fair value	Reserve value
– Total stock value; (details of each type of stock accounting for 10% or more of the total stock value )	…	…	…	…	…	…
– Total value of bonds (similar to stocks)	…	…	…	…	…	…
– Other investments	…	…	…	…	…	…
Add	…	…	…	…	…	…

– Reasons for change vary with each investment/type of stock, bond:

+ About quantity

+ About value

– Basis for determining fair value for trading securities .

1. b) Investments held to maturity

Indicators	End of the year			Beginning of the year
	Price origin	Recoverable value	Projected value room	Price origin	Recoverable value	Projected value room
– Short term	…	…	…	…	…	…
+ Term deposits (details of each short-term term deposit accounting for 10% or more of the total value of short -term term deposits )	…	…	…	…	…	…
+ Bonds (details of each investment ) Short- term bond investment accounts for 10% or more of the total value of short-term bond investment)	…	…	…	…	…	…
short- term loan accounting for 10% or more of the total short-term loan value)	…	…	…	…	…	…
+ Other investments	…	…	…	…	…	…
– Long term (similar to short term)	…	…	…	…	…	…
+ Term deposits	…	…	…	…	…	…
+ Bonds	…	…	…	…	…	…
+ Loans	…	…	…	…	…	…
+ Other investments	…	…	…	…	…	…
Add	…	…	…	…	…	…

– Explanation of interest on investments held to maturity but without recoverability so the business is not allowed to record revenue.

– Reasons for additional provisioning or reversal of provisions for losses on investments held to maturity .

1. c) Capital investment in other entities (details of each investment according to the capital holding ratio and voting rights ratio)

Indicators	End of the year			Beginning of the year
	Original price	Recoverable value	Reserve value	Original price	Recoverable value	Reserve value​
– Investment in subsidiaries	…	…	…	…	…
– Investing in joint ventures and associated companies	…	…	…	…	…	…
– Investing in other units + In which: Investment in BCC contracts in which the enterprise does not have joint control rights but enjoys benefits depending on the after-tax profit of the BCC contract	….	….	….	…	…	…
Add	…	…	…	…	…	…

– Summary of the operations of subsidiaries, joint ventures, associates, and status Status of BCC contracts during the period.

– Significant transactions between the enterprise and subsidiaries , joint ventures, associates and BCCs during the period.

– In case the fair value or recoverable value of the investment cannot be determined, clearly explain the reasons .

– Basis for determining the value of intangible assets such as intellectual property rights,… when investing in subsidiaries , joint ventures, and associated companies.

3. Accounts receivable from customers

Target​	End of the year		Beginning of the year
	Book value	Reserve value	Book value​	Reserve value
a) Short-term trade receivables	…	…	…	…
– Details of short-term customer receivables accounting for 10% or more of total short-term customer receivables	…	…	…	…
– Other customer receivables	…	…	…	…
b) Long-term (similar to short-term) customer receivables	…	…	…	…
c) Receivables from customers who are related parties (details of each subject )	…	…	…	…
Add	…	…	…	…

– Reasons for additional provisioning or reversal of bad debt provisions.

4. Other receivables

Indicators	End of the year		Beginning of the year
	Book value	Reserve value	Book value​​	Reserve value
a) Short term	…	…	…	…
– Dividends and profits to be collected	…	…	…	…
– Receivables from employees	…	…	…	…
– Betting, deposit	…	…	…	…
– Lending of non-monetary assets	…	…	…	…
– Expenses on behalf of	…	…	…	…
– Other receivables	…	…	…	…
b) Long term (similar to short term)	…	…	…	…
c) Receivables from BCC contracts that the enterprise jointly controls	…	…	…	…
Add​	…	…	…	…

– Enterprises must explain in detail the nature, content, value, advance payment period, repayment period, expected collection period, and overdue collection period (if any). have)… and other information related to the money and assets that the enterprise gives to individuals and departments within the enterprise to deposit , pledge, or bet in the form of advances or other receivables accounting for 10% or more of the total other receivables. In case the parties agree that the recipient of money and assets must pay interest to the enterprise , the enterprise must explain in detail the interest rate, interest payment period, interest payment method,… and must base on the nature instead of the name of the transaction to record and account appropriately.

the enterprise ‘s BCC contracts /have a significant impact:

+ Number/Name of BCC contract.

+ The nature of the BCC contract’s operations (description ) the nature of the relationship of the parties involved, the terms and conditions of the BCC contract, the rights and obligations of the enterprise related to the BCC contract,…)

+ Status and progress of BCC contract implementation.

+ Other necessary information such as the basis for re-evaluating the value of jointly controlled assets shared from the BCC contract (if any ) ,…

5. Missing assets awaiting resolution ( Details of each type of missing assets )

Indicators	End of the year		Beginning of the year
	Quantity	Value	Quantity	Value​​
a) Money;	…	…	…	…
b) Inventory;	…	…	…	…
C) Fixed assets;	…	…	…	…
d) Other assets.	…	…	…	…
Add	…	…	…	…

Enterprises must further explain the time limit that the enterprise will clearly determine. The reason for each type of missing assets awaiting resolution, the result of handling missing assets awaiting resolution on the previous period’s Financial Situation Report (handled in the period and not handled in this period), the reason for missing assets awaiting resolution that were reflected on the previous period’s Financial Situation Report but not handled in this period,…

6. Bad debt

Indicators	End of the year			Beginning of the year
	Principal value of debt	Recoverable value	Debtor​​	Principal value of debt	Recoverable value	Opposite to statue in debt
– Total value of receivables, loans that are overdue or not overdue but difficult to recover ( including details of overdue time and value of receivables, overdue loans by each subject if the receivables by each subject account for 10% or more of the total overdue debt)	…	…	…	…	…	…
– Ability to collect overdue receivables	…	…	…	…	…	…
Add	…	…	…	…	…	…

– Explain about fines, late interest receivable… arising from the receivables that are not recoverable so the business is not allowed to record revenue.

7. Inventory:

Indicators	End of the year		Beginning of the year
	Snail price	Preventive	Original price​	Preventive
– Purchased goods are on the way	…	…	…	…
– Raw materials	…	…	…	…
– Tools, equipment	…	…	…	…
– Cost of unfinished business production	…	…	…	…
– Product	…	…	…	…
– Goods	…	…	…	…
– Goods sent for sale	…	…	…	…
– Raw materials and supplies at bonded warehouses	…	…	…	…

– Raw material and material allocation criteria

– Value of stagnant, poor quality, degraded, technically obsolete,… inventories that cannot be sold at the end of the period; Causes and solutions for stagnant , poor quality, degraded, technically obsolete,… inventories;

– Value of inventory used as collateral to secure payable debts at the end of the period;

– Reasons for additional provisioning or reversal of inventory price reduction provisions.

8. Long-term unfinished assets

Target​	End of the year		Beginning of the year
	Snail price	Recoverable value	Original price	Recoverable value
a) Long-term unfinished production and business costs (Details for each type, stating the reasons why the unfinished asset production process was abnormally interrupted)	…	…	…	…
Add	…	…	…	…
b) Unfinished basic construction (Details for projects accounting for 10% of total basic construction value)	…	…	…	…
– Shopping	…	…	…	…
– XDCB	…	…	…	…
Periodic repair and maintenance	…	…	…	…
– Upgrading and renovating fixed assets	…	…	…	…
Add	…	…	…	…

tangible fixed assets

Item​​	Houses and structures	Machinery and equipment	Means of transport and transmission	Perennial plants for periodic products	…	Total
Original price
Beginning balance
– Purchased during the year
– Completed construction investment
– Other increases
– Switch to investment real estate
– Liquidation, sale
– Other discounts
Ending balance
Accumulated depreciation
Beginning balance
– Depreciation during the year
– Other increases
investment real estate
– Liquidation, sale
– Other discounts
Ending balance​
Remaining value​
– On New Year’s Day
– At the end of the year

– The remaining value at the end of the period of tangible fixed assets used as collateral to secure loans get a loan;

– Description of perennial plants for periodic products and working animals (if any);

– Detailed explanation of the list of existing tangible fixed assets and those liquidated/sold/ transferred during the period with a value of 10% or more of the total value of tangible fixed assets;

– Fixed assets at the end of the year have been fully depreciated but are still in use;

– Fixed assets awaiting liquidation at the end of the year;

– Commitments to purchase and sell tangible fixed assets of great value in the future;

– Other changes in tangible fixed assets.

10. Increase and decrease of intangible fixed assets :

Item	Land use rights	Copyright​	Industrial property rights​	Part soft	…	Total add
Original price
Beginning balance​​​
– Purchased during the year
– Created from within the enterprise
– Increase due to business consolidation
– Other increases
– Liquidation, sale
– Other discounts
Ending balance
Accumulated depreciation
Beginning balance​
– Depreciation during the year
– Other increases
– Liquidation, sale
– Other discounts
Ending balance
Remaining value​
– On New Year’s Day
– At the end of the year

– Detailed explanation of the list of existing intangible fixed assets and those liquidated/sold/transferred during the period with a value of 10% or more of the total value of intangible fixed assets ;

– The remaining value at the end of the period of intangible fixed assets used as mortgage or pledge to secure loans ;

– Intangible fixed assets have been fully depreciated but are still in use;

– Change depreciation method;

– Data explanation and other explanations.

11. Increase and decrease of financial leased fixed assets:

Item	Houses and structures	Machinery and equipment	Means of transport and transmission	…	Total add
Original price
Beginning balance
– Financial lease during the year
– Purchase of financial leased fixed assets
– Other increases
– Return of leased fixed assets	(…)	(…)	(…)	(…)	(…)
– Other discounts	(…)	(…)	(…)	(…)	(…)
Ending balance
Accumulated depreciation​
Beginning balance​
– Depreciation during the year
– Purchase of financial leased fixed assets
– Other increases
– Return of leased fixed assets	(…)	(…)	(…)	(…)	(…)
– Other discounts	(…)	(…)	(…)	(…)	(…)
Ending balance​​
Remaining value
– On New Year’s Day
– At the end of the year

– Additional rentals are recognized as expenses during the year;

– Basis for determining additional rent;

– Lease renewal terms or right to purchase the asset;

– Detailed explanation of the list of existing leased fixed assets with a value of 10% or more of the total value of leased fixed assets .

12. Biological assets

12.1. Other biological assets, except animals that periodically produce products that reach maturity

Indicators	End of the year		Beginning of the year
	Original price	Recoverable value​​	Original price	Recoverable value​
1. Livestock that takes products once
a) Livestock for short-term one-time product collection
b) Livestock raised for long-term one-time product collection
2. Seasonal crops or one-time products
a) Seasonal crops or short-term one-time products
b) Seasonal crops or long-term one-time products
3. Animals for periodic production that have not yet reached maturity

– Description of biological assets whose value accounts for 10% or more of the total value of biological assets study or higher: nature and characteristics of each type of biological asset, accounting policies applied to each type of biological asset, etc .;

– Method of allocating care and cultivation costs during the period for parent biological assets, newly created biological assets, agricultural products…;

– Depreciation method of biological assets ;

– Useful life/ depreciation rate of biological assets;

– Total book value and accumulated depreciation at the beginning and end of the accounting period;

– Provisions for loss of biological assets (if any);

– The value of biological assets used as collateral to secure payable debts at the end of the period;

– Commitment to invest in or purchase biological assets ;

– Changes such as disclosure of fair value less costs to sell of observable and measurable biological assets (if any);

– Explain other issues related to biological assets .

12.2 . Animals that produce products periodically reach maturity.

Item	Group 1	Group 2	… .	… .	Total​
Original price
Beginning balance
– Purchased during the year
– Liquidation, sale
– Other discounts
Ending balance​
Accumulated depreciation
Beginning balance
– Depreciation during the year
– Other increases
– Liquidation, sale
– Other discounts
Ending balance
Remaining value
– On New Year’s Day
– At the end of the year

Group 1, 2,… according to the group of animals that periodically produce products that reach maturity according to the enterprise’s classification.

investment real estate :

Item	Number beginning of the year	Increase during the year	Decrease during the year	Year -end number
a) Investment real estate for rent
Original price
– Land use rights
– Home
– House and land use rights
– Infrastructure
Accumulated depreciation
– Land use rights
– Home
– House and land use rights
– Infrastructure
Remaining value
– Land use rights
– Home
– House and land use rights
– Infrastructure
b) Investment real estate held for price increase
Original price
– Land use rights
– Home
– House and land use rights
– Infrastructure
Loss due to impairment
– Land use rights
– Home​
– House and land use rights
– Infrastructure
Remaining value
– Land use rights
– Home
– House and land use rights
– Infrastructure

– The remaining value at the end of the period of the investment real estate used as mortgage or collateral for the loan;

– Original price of investment real estate has been fully depreciated but is still rented out or held waiting for price increase;

– Detailed explanation of the list of existing investment real estate and those liquidated/sold during the period with a value of 10% or more of the total value of investment real estate;

– Data explanation and other explanations.

14. Pending allocation costs​​

Item	End of the year	Beginning of the year
a) Short-term (details for each expenditure content)	…	…
b) Long-term (details for each expenditure content )	…	…
Add	…	…

15. Other assets

Item	End of the year	Beginning of the year
a) Short-term (details by item)	…	…
b) Long-term (details for each item)	…	…
Add	…	…

16. Loans and financial lease debt

Item	End of the year	During the year		Beginning of the year
		Increase	Reduce
a) Short-term loans (detailed explanation by subject if the balance accounts for 10% or more of the total balance of short-term loans)	…	…	…	…
b) Long-term loans (similar to short-term)	…	…	…	…
c) Loans from related parties	…	…	…	…
Add	…	…	…	…

1. d) Financial leasing debts (detailed explanation by subject if there is a balance) from 10% or more of the total outstanding financial lease debt)

Duration	This year			Last year​
	Total lease payments	Pay interest on rent	Principal repayment	Total lease payments	Pay interest on rent	Principal repayment
1 year or less	…	…	…	…	…	…
Over 1 year to 5 years	…	…	…	…	…	…
Over 5 years	…	…	…	…	…	…
Finance lease debt from related parties	…	…	…	…	…	…
Add	…	…	…	…	…	…

1. d) Unpaid overdue loans and financial leasing debts ( detailed explanation by subject if the balance accounts for 10% or more of the total outstanding overdue loans and financial leasing debts)

Item	End of the year		Beginning of the year
	Origin	Interest	Origin	Interest
– Get a loan	…	…	…	…
– Financial leasing debt	…	…	…	…
– Reason for overdue payment	…	…	…	…
Add	…	…	…	…

1. e) Loans and financial leasing debts from related parties that are overdue but unpaid

Item	End of the year		Beginning of the year
	Origin	Interest	Origin	Interest
– Get a loan	…	…	…	…
– Financial leasing debt	…	…	…	…
– Reason for overdue payment	…	…	…	…
Add	…	…	…	…

17. Must pay the debtor

Item	End of the year	Beginning of the year
a) Short-term payables to suppliers	…	…
– Details for each subject accounting for 10% or more of the total payable	…	…
– Payable to other entities	…	…
b) Long-term payables to suppliers (similar details to short-term)	…	…
Add	…	…
c) Unpaid overdue debt	…	…
– Details of each subject accounting for 10% or more of the total overdue	…	…
– Other subjects	…	…
Add	…	…
d) Payable to related parties (details for each entity)	…	…

18. Must pay dividends and profits

Item	End of the year	Beginning of the year
Must pay dividends, profits	…	…

– Explanation of the deadline for paying dividends or profits in cash, non-cash assets to shareholders, owners , etc.

– Dividends and profits that have been committed to be paid but have passed the deadline and the enterprise has not paid them to shareholders and owners…

19. Taxes and other payments to the state

Item	Head year	Amount payable during the year	Amount actually paid during the year	Last year
a) Must pay (details of each tax type )	…	…	…	…
– Short term	…	…	…	…
– Long term	…	…	…	…
Add	…	…	…	…
b) Receivables (details of each tax type)	…	…	…	…
– Short term	…	…	…	…
– Long term	…	…	…	…
Add	…	…	…	…

In case an enterprise is subject to additional corporate income tax payment according to the regulations on global minimum tax, it must explain the criteria or basis for recording the additional corporate income tax payable in the reporting year as well as the adjusted tax liability due to the difference between the tax declaration year and the year of recording additional corporate income tax expenses according to the regulations on global minimum tax, etc.

20. Expenses payable

Item​	End of the year	Beginning of the year
a) Short-term (details for each expenditure content)	…	…
b) Long-term (details for each expenditure content)	…	…
Add	…	…

2 1. Other payables

Item​	End of the year	Beginning of the year
a) Short term	…	…
– Surplus assets awaiting resolution	…	…
– Union fees	…	…
– Social insurance	…	…
– Health insurance	…	…
– Unemployment insurance	…	…
– Accept short-term deposits and bets	…	…
– Other payables	…	…
Add	…	…
b) Long-term (details of each item)	…	…
– Accept long-term deposits and bets	…	…
– Other payables	…	…
c) Amount of unpaid overdue debt (details of each item, clearly stating the reason for unpaid overdue debt)	…	…

22. Revenue awaiting allocation

Item	End of the year	Beginning of the year
a) Short term (details of each content)	…	…
b) Long term (details of each content)	…	…
c) Inability to perform the contract with the customer (details of each content, reasons for inability to perform the contract with the customer)	…	…
Add	…	…

23. Bonds issued

23.1. Regular bonds (details by type)

Item	End of the year	Beginning of the year
a) Issued bonds	…	…
– Type of issuance at par value	…	…
– Discounted issue type	…	…
Premium release type	…	…
Add	…	…
b) Detailed explanation of bonds held by related parties (by type of bond)	…	…
c) Bond issuance costs	…	…
Add	…	…

Enterprises must explain in detail the time of issuance; the quantity of each type of bond issued; the interest rate of the issued bond; the original term of the issued bond according to Each group of bonds issued at par value, with discount or premium; method of allocating discount or premium, bond issuance costs , etc.

23.2. Convertible bonds:

Enterprises must explain information about:

1. a) Convertible bonds at the beginning of the period:

– Issuance date, original term and remaining term of each type of convertible bond ;

– Quantity, face value, interest rate of each type of convertible bond;

– Conversion rate into shares of each type of convertible bond;

– Discount rate used to determine the principal value of each type of convertible bond ;

– The value of the principal and stock option portion of each type of convertible bond.

1. b) Additional convertible bonds issued during the period:

– Time of issuance, original term of each type of convertible bond;

– Quantity, face value, interest rate of each type of convertible bond;

– Conversion rate into shares of each type of convertible bond ;

– Discount rate used to determine the principal value of each type of convertible bond ;

– The value of the principal and stock option portion of each type of convertible bond.

1. c) Convertible bonds converted into shares during the period:

– Number of each type of bond converted into shares during the period;

– Number of additional shares issued during the period to convert bonds;

– The principal value of convertible bonds is recorded as an increase in equity.

1. d) Mature convertible bonds are not converted into shares during the period:

– Number of each type of matured bonds not converted into shares during the period;

– The principal value of the convertible bond is returned to the investor.

Convertible bonds at the end of the period:

– Original term and remaining term of each type of convertible bond ;

– Quantity, face value, interest rate of each type of convertible bond;

– Conversion rate into shares of each type of convertible bond;

– Discount rate used to determine the principal value of each type of convertible bond ;

– The value of the principal and stock option portion of each type of convertible bond.

1. e) Detailed explanation of convertible bonds held by related parties (explanatory content is similar to items a, b, c, d, and dd above).
2. Preferred shares classified as liabilities

– Face value;

– Issued subjects (management, officers, employees, other subjects);

– A mandatory buyback clause or the issuer must pay dividends at a fixed rate regardless of the issuer’s business performance (Time, buyback price, other basic terms in the issuance contract);

– Value repurchased during the period;

– Other explanations.

25. Provisions for payables

Item	Head year	The provision increased during the year	The provision decreased during the year	End of the year
a) Short-term (Details by type of payable provision)	…	…	…	…
Add	…	…	…	…
b) Long term (similar to short term)	…	…	…	…
Add	…	…	…	…

– Enterprises must explain information about legal obligations or joint obligations, basis for estimating the value (if any),… of the obligation to restore the environment, clean up, restore, and return the site.

– Detailed explanation of the total estimated cost that the enterprise must pay to provide severance pay to employees according to the provisions of labor law.

Deferred income tax assets and deferred income tax liabilities

1. a) Deferred income tax assets

Item	End of the year	Beginning of the year
– Corporate income tax rate used to determine the value of deferred income tax assets
– Deferred income tax assets related to deductible temporary differences	…	…
– Deferred income tax assets related to unused tax losses	…	…
– Deferred income tax assets related to unused tax incentives	…	…
– Amount offset against deferred income tax payable	…	…
Deferred income tax assets i	…	…

1. b) Deferred income tax payable

Item	End of the year	Beginning of the year
– Corporate income tax rate used to determine the value of deferred income tax payable	…	…
– Deferred income tax payable arising from taxable temporary differences	…	…
– Amount offset against deferred income tax assets	…	…

27. Equity

a ) Equity fluctuation comparison table​

Item	Items of equity
	Owner’s equity	Capital surplus	Bond conversion option	Other owners ‘ equity	Asset revaluation difference	Exchange rate difference i	Undistributed profit after tax and funds	Other items​ …	Add
A	1	2	3	4	5	6	7	8
Last year’s opening balance – Capital increase in previous year – Profit in the previous year – Other increases – Decreased capital in the previous year – Loss in the previous year – Other discounts
Beginning balance this year
– Capital increase this year – Profit this year – Other increases – Reduce capital this year – Loss this year – Other discounts
Ending balance

1. b) Details of owner ‘s capital contribution

Item	End of the year	Beginning of the year
– Contributed capital of parent company (if it is a subsidiary)	…	…
– Capital contributions of other entities	…	…
Add	…	…

Capital transactions with owners and dividend and profit distribution

Item	This year	Last year
– Owner’s capital	…	…
Beginning capital contribution	…	…
+ Capital increase during the year	…	…
+ Capital contribution decreased during the year	…	…
+ Year-end capital contribution	…	…
– Dividends, distributed profits	…	…

1. d) Stocks

Item	End of the year	Beginning of the year
Number of shares registered for issuance	…	…
– Number of shares sold to the public	…	…
+ Common stock	…	…
+ Preferred stock (classified as equity)	…	…
– Number of shares repurchased (treasury shares, own shares repurchased )	…	…
+ Common stock	…	…
+ Preferred stock (classified as equity)	…	…
Number of shares outstanding	…	…
+ Common stock	…	…
+ Preferred stock (classified as equity)	…	…

* Par value of outstanding shares: ………………….

1. d) Dividends and profits

– Dividends and profits declared after the end of the accounting year:

+ Dividends and profits declared on common stock or charter capital: ……………..

+ Dividends declared on preferred shares: ……………

+ Stock dividends ……………

+ Profits are divided to supplement the charter capital of the invested enterprise….

Unrecorded cumulative preferred stock dividends : …………

– Explanation that the enterprise is not allowed to use all the money it has collected from offering and issuing shares to the public that are being frozen.

1. e) Reasons for increase/decrease in items belonging to the enterprise’s equity

– Capital surplus;

– Bond conversion option;

– Development investment fund;

– Own repurchased shares;

– Other equity funds;

1. g) Income and expenses, profits or losses are recorded directly in equity according to the provisions of specific Vietnamese Accounting Standards.
2. Difference in asset revaluation

Item	This year	Last year
Reasons for changes between the beginning and end of the year numbers (revaluation in which cases, which assets are revalued, according to which decision ?…).	…	…

29. Exchange rate difference

Item​	This year	Last year
– Exchange rate difference due to conversion of financial statements prepared in foreign currency into VND	…	…
– Exchange rate differences arise due to other reasons (specify the reason)	…	…

30. Items outside the Statement of Financial Position

Item	End of the year	Beginning of the year
a) Leased assets: The total future minimum lease payments for non -cancelable operating leases over the terms	…	…
– 1 year or less	…	…
– Over 1 year to 5 years	…	…
– Over 5 years	…	…

– Enterprises must explain the quantity , type, characteristics, properties, and duration of the goods. lease,… of each type or group of leased assets at the end of the accounting period.

1. b) Assets accepted for safekeeping, consignment, processing, and import-export entrustment

– Explain the value and reasons for large amounts of cash and cash equivalents held by the enterprise but not used due to legal restrictions or other constraints that the enterprise must fulfill.

– Explain in detail the nature, quantity , type, technical parameters , specifications, quality,… of each type of product, material, goods, assets kept on behalf of others, received for processing, at the end of the accounting period. For logistics enterprises, warehouse managers must explain in detail the information about the group of goods being kept on behalf of others, the rights and obligations of the parties in preserving those goods as well as any significant risks related to the goods kept on behalf of others,… In case it is not possible to explain specifically the information about the goods kept on behalf of others, it is necessary to clearly state and explain the reason why this explanation cannot be made.

– Goods accepted for sale on behalf of others, accepted for consignment, accepted for agency sale, accepted for import-export consignment: Enterprises must explain in detail the quantity, type, specifications, and quality of each type of goods;

– Pledged and mortgaged assets: Enterprises must explain in detail each type of pledged and mortgaged assets ; each term and subject of pledge and mortgage,…

– Assets of other units discovered to be in excess during inventory .

1. c) Infrastructure assets excluding state capital components in enterprises: Enterprises must explain the original price and accumulated depreciation value according to relevant laws.
2. d) Assets of the enterprise used for pledge or mortgage: The enterprise must explain in detail each type of asset used for pledge or mortgage; each term and the subject of pledge or mortgage,…
3. d) Foreign currencies of all kinds: Enterprises must explain in detail the quantity of each type of foreign currency in original currency.

Monetary gold: Enterprises must present the volume in domestic units.

Precious metals and gemstones: Enterprises must explain in detail the original price, quantity and types of precious metals and gemstones.

1. e) Bad debts that have been resolved: Enterprises must explain in detail the value (in original currency and VND) of bad debts that have been resolved within 10 years from the date of resolution according to each subject and reason for the deletion of bad debts from the accounting books.
2. g) Interest on deferred and installment payments when purchasing assets: Enterprises must explain the number of deferred and installment payment periods; total interest payable; interest paid; and interest remaining to be paid when purchasing assets on deferred and installment payments.
3. h) Interest on deferred and installment payments when selling assets: Enterprises must explain the number of deferred and installment payment periods; total interest receivable; interest collected; interest receivable when selling assets on deferred and installment payments.
4. i) Other information on items outside the Financial Statements to provide useful information to report users.
5. The value of assets that the enterprise is holding from other parties but is limited in use due to legal restrictions or debts that the enterprise is obliged to pay according to the contract agreement or according to the provisions of law (for example, assets under a BCC contract, amounts of money blocked when a public company issues/offers shares to raise capital from shareholders, etc.)

Item (Depending on the content of the item to explain appropriately to the reality of the business)	This year	Last year
Asset
– Cash and cash equivalents	…	…
– Accounts receivable	…	…
– Inventory	…	…
– Fixed assets	…	…
– Real estate investment	…	…
– Other assets	…	…
Add	…	…
Liabilities
– Payable to seller	…	…
– Must repay loan	…	…
– Costs payable	…	…
– Other payables	…	…
Add	…	…

32. Other information that the enterprise deems necessary to explain and provide useful information to users.

– Explain information on the basis for determining the value of non-monetary assets sponsored or donated;

– Other information.

. Additional information for items presented in the Income Statement

Unit: ………

1. Total sales and service revenue

Item	This year	Last year
a) Revenue	…	…
– Revenue from sales of products and goods (excluding revenue from sales and liquidation of investment real estate)	…	…
– Revenue from providing services (except construction services)	…	…
– Construction service revenue	…	…
+ Construction service revenue arising during the period	…	…
+ Total accumulated revenue of construction services recorded up to the end of the accounting period	…	…
– Subsidy revenue	…	…
– Other revenue	…	…
Add	…	…
b) Revenue from related parties (details for each subject)	…	…

1. c) In case an enterprise generates revenue from the sale of tourist apartments, office apartments combined with accommodation or similar products, it must explain in the Financial Statements the accounting policies, the nature of the contract (rights and obligations of the parties) and the accounting method that the enterprise considers most appropriate.
2. Revenue deductions

Item	This year	Last year
– Trade discount	…	…
– Sales discount	…	…
– Revenue from returned goods	…	…
Add	…	…

3. Cost of goods sold

Item	This year	Last year
– Cost of products and goods sold (minus remaining value and costs of selling and liquidating investment real estate)	…	…
– Cost of services provided (including construction services)	…	…
– Value of inventory lost during the period	…	…
– Value of each type of inventory lost beyond the norm during the period	…	…
– Production costs exceeding normal levels are charged directly to cost of goods sold.	…	…
– Provision for inventory depreciation, provision for biological assets depreciation	…	…
– Amounts written down for cost of goods sold	…	…
Add​​	…	…

4. Profit/ loss from sale and liquidation of investment real estate

Item	This year	Last year
– Revenue from sale and liquidation of investment real estate	…	…
– Remaining value of investment real estate	…	…
– Cost of transfer and liquidation of investment real estate	…	…
Profit/ loss from sale and liquidation of investment real estate	…	…

5. Financial operating revenue

Item	This year	Last year
– Interest on deposits and loans	…	…
– Profit from sale and liquidation of financial investments	…	…
– Dividends and profits are distributed in cash or non-cash assets.	…	…
– Exchange rate difference profit	…	…
– Interest on sales on installments	…	…
– Payment discount enjoyed	…	…
– Other financial revenue	…	…
Add	…	…

6. Financial costs

Item	This year	Last year
– Borrowing costs	…	…
– Losses from selling and liquidating financial investments	…	…
– Exchange rate difference loss	…	…
– Interest on purchases on installments	…	…
– Payment discounts payable	…	…
– Provision for devaluation of trading securities and provision for loss on investments in other entities	…	…
– Cost of unsuccessful bond and stock issuance	…	…
– Other financial costs	…	…
– Financial expense deductions	…	…
Add	…	…

7. Other income

Item	This year	Last year
– Liquidation and sale of fixed assets	…	…
– Profit from revaluation of assets when contributing capital	…	…
– Fines collected	…	…
– Tax reduction	…	…
– Amounts of support, sponsorship, donations and gifts are recorded in other income.	…	…
– Other expenses	…	…
Add	…	…

8. Other expenses

Item	This year	Last year
– Remaining value of fixed assets and liquidation and sale costs of fixed assets	…	…
– Loss due to revaluation of assets when contributing capital	…	…
– Fines	…	…
– Other expenses	…	…
Add	…	…

Selling expenses and business management expenses

Item	This year	Last year
a) Business management expenses incurred during the period	…	…
– Details of items accounting for 10% or more of total business management costs	…	…
– Other administrative expenses	…	…
b) Selling expenses incurred during the period	…	…
– Details of items accounting for 10% or more of total cost of sales	…	…
Other sales expenses	…	…
c) Amounts recorded to reduce selling expenses and business management expenses	…	…
– Return of warranty provisions for products, goods, and construction works	…	…
– Reversal of restructuring provisions and other provisions	…	…
– Other deductions	…	…

10. Production and business costs by factor

Item	This year	Last year
– Cost of raw materials	…	…
– Labor costs	…	…
Fixed asset depreciation costs	…	…
– Outsourcing service costs	…	…
– Other expenses in cash	…	…
Add​​	…	…

Note:

For the explanation of the indicator “Production and business costs by element”, depending on the characteristics, production and business lines and based on the opening balance and the number of transactions during the period of related accounting accounts, the enterprise will explain in detail the production and business costs by element reflected in the Business Performance Report.

In case due to the nature of the business, the enterprise cannot present the information elements on the Business Performance Report according to the function of the cost, it shall be presented according to the nature of the cost. When presenting the explanation of production and business costs by element, it must ensure that the total production and business costs by element must equal the total costs recorded in the Business Performance Report.

Enterprises have the right to choose other bases but must ensure full explanation of costs by element.

11. Corporate income tax expense

Item	This year	Last year
– Pre-tax accounting profit	…	…
– Tax is calculated according to current corporate income tax rate	…	…
Adjust (depending on the unique characteristics of the business to explain the appropriate adjustment items):	…	…
– Tax-free income	…	…
– Non-deductible expenses	…	…
– Shortage/(excess) provisions of previous years	…	…
…	…	…
Corporate income tax expense	…	…
Current corporate income tax expense	…	…
Deferred corporate income tax expense (**)	…	…
Corporate income tax expense (*)	…	…

(*) Corporate income tax expense for the fiscal year is estimated based on taxable income and may be adjusted depending on tax authority inspection.

Deferred corporate income tax expense	This year	Last year
– Deferred corporate income tax expense arising from taxable temporary differences	…	…
– Deferred corporate income tax expense arising from the reversal of deferred income tax assets	…	…
– Deferred corporate income tax income arising from deductible temporary differences	(…)	(…)
unused tax losses and tax incentives	(…)	(…)
– Deferred corporate income tax income arising from the reversal of deferred income tax liabilities	(…)	(…)
– Total deferred corporate income tax expense	…	…

VIII . Additional information for items presented in the Cash Flow Statement

1. Amounts held by the enterprise but not used

Detailed explanation of the value and reasons for cash and cash equivalents held by the enterprise but not used due to legal restrictions or other constraints that the enterprise must comply with.

2. Non-cash transactions affect future Cash Flow Statements

Item	This year	Last year
– Purchase of assets by taking on directly related liabilities or through financial leasing transactions	…	…
– Buying businesses through issuing shares	…	…
– Convert debt into equity	…	…
– Other non-monetary transactions	…	…

3. Actual loan amount collected during the period:

– Proceeds from borrowing under conventional contracts;

– Proceeds from issuance of regular bonds;

– Proceeds from issuing convertible bonds;

– Proceeds from issuance of preferred shares are classified as liabilities;

– Proceeds from government bond repurchase and securities REPO transactions;

– Proceeds from borrowing in other forms.

4. Amount actually paid back in principal during the period:

– Principal repayment of loan under normal contract;

– Principal repayment of regular bonds;

– Principal repayment of convertible bonds;

– Principal repayment of preferred stock is classified as a liability;

– Payment for government bond repurchase and securities REPO transactions;

– Debt repayment in other forms.

5. Purchase and disposal of subsidiaries during the reporting period

– Total value of purchases or liquidations of subsidiaries during the period;

– The portion of the purchase or liquidation value of a subsidiary paid in cash and cash equivalents;

– The amount of cash and cash equivalents actually held in the subsidiary or other business unit acquired or disposed of;

– The value of assets (summary by type of asset) other than cash and cash equivalents and liabilities in subsidiaries purchased or liquidated during the period.

1. Other information
2. Contingent liabilities, commitments and other financial information:
3. Events occurring after the end of the accounting period: …………………….
4. Information about related parties (in addition to the information explained in the above sections).
5. Present assets, revenue, and business results by segment (by business sector or geographical area) in accordance with the provisions of Vietnamese Accounting Standard No. 28 – Segment reporting

(1):…

(2):…

5. Comparative information (changes in information in the Financial Statements of previous accounting years): ……………………………………………………………………………..
6. Information on meeting the going concern assumption applies to cases where the Board of Directors determines that events or conditions exist that may cast significant doubt on the entity’s ability to continue as a going concern. In that case, the enterprise’s financial statement notes must:

– A full description of the main events or conditions that give rise to significant doubt about the business’s ability to continue as a going concern and the Board of Directors’ plans to address these events or conditions;

– Clearly state the uncertainties that the Board of Directors of the enterprise is aware of related to events or conditions that may cause significant doubt about the enterprise’s ability to continue as a going concern;

– The Board of Directors’ conclusion on whether or not there are material uncertainties related to the going concern operation of the enterprise, thereby determining whether or not the enterprise can recover assets and pay liabilities in the normal course of business of the enterprise.

7. Explanation of important assumptions and estimates, including:
8. a) The nature of the assumptions or uncertainties of the estimate;
9. b) The reasons and amounts that may be affected by assumptions or uncertainties in the estimate;
10. c) Assessment of the likelihood of different scenarios;

d ) Measures/solutions expected to be taken by the Board of Directors to limit the impact on items on the Financial Statements if uncertainties may arise in the next fiscal year.

8. Other measures/solutions ……………………………………………………………….
9. Contents of amendments and supplements to the form, name and content of the financial report indicators compared to the Financial Report form prescribed by the Ministry of Finance (if any)

– Names of indicators have been modified, supplemented and changed according to regulations: …

– The content of the indicators is amended, supplemented and changed according to regulations: ….

– Reason for change:…

 

Approved, date… month… year…

PREPARED BY (Signature , full name)

CHIEF ACCOUNTANT (Signature , full name)

LEGAL REPRESENTATIVE ( Signature , full name , seal )

 

6. Explanation of the annual financial statements of the enterprise that do not meet the going concern assumption

Reporting unit: …………………… Address:………………………………

Form No. B 09 – DNKLT (Attached to Circular No. 99/2025/TT-BTC dated January 27, 2025 of the Minister of Finance)

 

NOTES TO THE FINANCIAL STATEMENTS

Accounting period from… to…

( Applies to businesses that do not meet the going concern assumption)

1. Characteristics of business operations
2. Form of capital ownership.
3. Business field.
4. Business lines
5. Normal production and business cycle.
6. Reasons for not meeting the operating assumption: Because the enterprise is preparing to dissolve, go bankrupt , or terminate operations according to the decision of a competent authority (specify the name of the authority, decision number) or because the Board of Directors intends to do so in writing (number, date, month, year).
7. Corporate structure

– List of subsidiaries;

– List of joint ventures and associated companies;

– List of affiliated units.

7. Number of employees at the end of the fiscal year or average number of employees during the fiscal year.
8. Statement on the comparability of information in the Financial Statements (whether comparable or not).
9. Explain other information according to relevant legal regulations such as corporate law, securities law,…
10. Accounting period, currency used in accounting
11. Annual accounting period (starting from…./…./…. ending on …./…./…).
12. Currency used in accounting. In case of any change in the currency used in accounting compared to the previous year, clearly explain the reason and impact of the change.

III. Applicable accounting standards and regimes

1. Applicable accounting regime.
2. Declaration on compliance with Vietnamese Accounting Standards and Accounting Regime.
3. Accounting policies, accounting estimates and relevant applicable legal regulations
4. Principles for converting Financial Statements prepared in foreign currency to Vietnamese Dong (In case the accounting currency is different from Vietnamese Dong); Impact (if any) due to converting Financial Statements from foreign currency to Vietnamese Dong.
5. Types of exchange rates applied in accounting.
6. Principle of determining the real interest rate (effective interest rate) used to discount cash flows.
7. Principles of recording cash and cash equivalents.

Accounting principles for financial investments

1. a) Trading securities;
2. b) Investments held to maturity;
3. c) Investment in subsidiaries; joint ventures and associates;
4. d) Investment in capital instruments of other entities;
5. d) Accounting methods for other transactions related to financial investments.
6. Principles of accounting for receivables
7. Principles of inventory accounting

– Principles of inventory recording;

– Method of calculating inventory value;

– Inventory accounting method;

– Method of setting up inventory price reduction provision.

8. Principles for recording tangible fixed assets (including perennial plants for periodic products, working animals), intangible fixed assets, financial leased fixed assets, and investment real estate.
9. Principles of accounting for biological assets.
10. Accounting principles for BCC contracts.
11. Principles of accounting for pending cost allocation .
12. Accounting principles for payables to vendors.
13. Accounting principles for dividends and profits.
14. Principles of recording payable expenses.
15. Principles for recording revenue pending allocation.
16. Accounting principles for payable provisions.
17. Accounting principles for deferred corporate income tax.
18. Principles for recording loans and financial lease debts.
19. Principles of recognition and capitalization of borrowing costs.
20. Principles of recording convertible bonds.
21. Principles of recording equity:

– Principles for recording owners’ capital contributions, capital surplus, convertible bond options , and other owners’ capital.

– Principles for recording undistributed profits after tax .

22. Principles and methods of recording revenue and other income:

– Sales revenue and service provision

+ Sales revenue.

+ Service revenue.

+ Construction contract revenue.

tourist apartments , offices combined with accommodation or similar products.

+ Revenue from sales of investment real estate.

– Financial revenue;

– Other income.

23. Accounting principles for revenue deductions.
24. Principles of accounting for cost of goods sold.
25. Principles of financial cost accounting.
26. Principles of accounting for sales costs and business management costs.
27. Accounting principles for sale and liquidation of fixed assets and investment real estate.
28. Principles and methods of recording current corporate income tax expenses (including additional corporate income tax expenses under global minimum tax regulations), deferred corporate income tax expenses .
29. Other accounting principles and methods.
30. Applicable accounting policies (in case the enterprise does not meet the going concern assumption)

– Are long-term assets and long-term liabilities reclassified as short-term?

– Principles for determining the value of each type of asset and liability (according to net realizable value, recoverable value, fair value, current value, current price…).

– Financial handling principles for :

+ Provisions;

+ Difference in asset revaluation and exchange rate difference (still reflected in the Financial Statement – if any).

1. Additional information for items presented in the Statement of Financial Position

Unit: …….

1. Cash and cash equivalents

Cash and cash equivalents that the enterprise is holding are not subject to any restrictions on use.	End of the year	Beginning of the year
– Cash	…	…
– Non-term deposits	…	…
– Money is transferring	…	…
Cash equivalents	…	…
Add	…	…

– Detailed explanation of the balance of non-term deposits by each bank accounting for 10% of the total balance of non-term deposits.

– Detailed explanation of the content, term, and balance of each item classified as cash equivalents of the enterprise (details of each type accounting for 10% of the total cash equivalent value).

2. Financial investments
3. a) Trading securities

Indicators	End of the year		Beginning of the year
	Original price	Fair value	Original price	Fair value	Reserve value
– Total value of shares (details of each type of shares accounting for 10% or more of the total value of shares)	…	…	…	…	…
– Total value of bonds (similar to stocks)	…	…	…	…	…
– Other investments	…	…	…	…	…
Add​​	…	…	…	…	…

– Reasons for change for each investment/type of stock, bond:

+ About quantity

+ About value

– Basis for determining fair value for trading securities;

– The discount rate the enterprise has used in addition to observable inputs when determining the fair value of trading securities.

1. b) Investments held to maturity (specify the basis for revaluation; if revaluation is not possible, explain the reason)

Item	End of the year		Beginning of the year
	Original price	Recoverable value	Original price	Recoverable value	Reserve value
– Term deposits	…	…		…	…
– Bonds	…	…		…	…
– Loan	…	…		…	…
– Other investments
Add	…	…		…	…

1. c) Capital investment in other entities (details of each investment according to the capital holding ratio and voting rights ratio)

Indicators	End of the year		Beginning of the year
	Original price	Recoverable value	Original price	Recoverable value	Reserve value​
– Investment in subsidiaries	…	…		…	…
– Investing in joint ventures and associated companies	…	…	…	…	…
– Investing in other units + In which: Investment in BCC contracts in which the enterprise does not have joint control rights but enjoys benefits depending on the after-tax profit of the BCC contract	…	…	…	…	…
Add	…	…	…	…	…

– Summary of the operations of subsidiaries, joint ventures, associates, and the status of BCC contracts during the period.

– Significant transactions between the enterprise and subsidiaries, joint ventures, associates and BCCs during the period.

– In case the recoverable value of the investment cannot be determined, clearly explain the reason.

3. Customer receivables (State clearly the basis for re-evaluation. If re-evaluation is not possible , explain the reason).

Item	End of the year		Beginning of the year
	Book value	Recoverable value	Book value​	Reserve value
a) Accounts receivable from customers	…	…	…	…
– Details of customer receivables accounting for 10% or more of total customer receivables	…	…	…	…
– Accounts receivable from other customers	…	…	…	…
b) Receivables from customers who are related parties (details of each subject)	…	…	…	…

4. Other receivables (State clearly the basis for revaluation. If revaluation is not possible, explain the reason)

Item	End of the year		Beginning of the year
	Book value	Recoverable value	Book value​	Reserve value
– Dividends and profits must be collected;	…	…	…	…
– Receivables from employees;	…	…	…	…
– Betting, deposit;	…	…	…	…
– Lending of non-monetary assets;	…	…	…	…
– Payments on behalf of others;	…	…	…	…
– Other receivables	…	…	…	…
– Receivables from BCC contracts that the enterprise jointly controls	…	…	…	…
Add	…	…	…	…

Enterprises must explain in detail the nature, content, value, advance payment period, repayment period, expected collection period, overdue collection period (if any),… and other information related to the money and assets that the enterprise gives to individuals and departments within the enterprise to deposit, pledge, or bet in the form of advances or other receivables accounting for 10% or more of the total other receivables. In case the parties agree that the recipient of money and assets must pay interest to the enterprise, the enterprise must explain in detail the interest rate, interest payment period, interest payment form,… and must base on the nature instead of the name of the transaction to record and account appropriately.

– Explain information about BCC contracts accounting for 10% or more of the total value of the enterprise’s BCC contracts:

+ Number/Name of BCC contract.

+ Nature of the BCC contract’s operations (describes the nature of the relationship between the participating parties , the terms and conditions of the BCC contract, the rights and obligations of the enterprise related to the BCC contract,…)

+ Status and progress of BCC contract implementation.

+ Other necessary information such as basis for re-evaluating the value of jointly controlled assets divided from the BCC contract (if any),…

Missing assets awaiting resolution (Details of each type of missing asset) (Clearly state the basis for re-evaluation. If re-evaluation is not possible, explain the reason ) .

Item	End of the year		Beginning of the year
	Quantity	Value	Quantity	Value
a) Money;	…	…	…	…
b) Inventory;	…	…	…	…
c) Fixed assets;	…	…	…	…
d) Other assets.	…	…	…	…
Add​​		…		…

Enterprises must explain the value of assets missing pending settlement that have been recorded in the business results of the period. Within a period, the enterprise will clearly identify the cause of each type of assets missing pending settlement on the Financial Statement of this period, the results of handling assets missing pending settlement that have been reflected on the Financial Statement of the previous period but have not been handled in this period , …

6. Bad debt​​

Item	End of the year			Beginning of the year
	Principal value of debt	Recoverable value​	Debtor​	Principal value of debt	Recoverable value​	Debtor​
– Total value of receivables, loans that are overdue or not overdue but unlikely to be recovered; (including details of the overdue period and value of receivables, overdue loans by each entity if the receivables by each entity account for 10% or more of the total overdue debt);	…	…		…	…
– Ability to collect overdue receivables.	…	…		…	…
Add	…	…		…	…

– Explain about fines, late interest receivables , … arising from receivables that cannot be recovered, so the business cannot record revenue.

7. Inventory: (State clearly the basis for re-evaluation. If re-evaluation is not possible, explain the reason)

Item	End of the year		Beginning of the year
	Original price	Net realizable value	Original price	Preventive
– Purchased goods are on the way;	…	…	…	…
– Raw materials;	…	…	…	…
– Tools, instruments;	…	…	…	…
– Cost of unfinished business production;	…	…	…	…
– Product;	…	…	…	…
– Goods;	…	…	…	…
– Goods sent for sale;	…	…	…	…
– Raw materials and supplies at bonded warehouse.	…	…	…	…

– Raw material and material allocation criteria;

– Value of stagnant, poor quality, degraded, technically obsolete,… inventories that cannot be sold at the end of the period; Causes and solutions for stagnant, poor quality, degraded, technically obsolete,… inventories;

– The value of inventory used as collateral to secure payable debts at the end of the period.

Unfinished basic construction (Clearly state the basis for re-evaluation. If re-evaluation is not possible, explain the reason)

Item (Details for projects accounting for 10% of the total construction value )	End of the year		Beginning of the year
	Remaining value	Recoverable value	Original price	Recoverable value
– Shopping;	…	…	…	…
– XDCB;	…	…	…	…
– Repair and periodic maintenance;	…	…	…	…
– Upgrade and renovate	…	…	…	…
Add	…	…	…	…

9. Increase or decrease in tangible fixed assets (State clearly the basis for revaluation; if unable to re-evaluate, explain the reason):

Catalog​​	House, architectural object	Machinery and equipment	Means of transport and transmission	Perennial plants for periodic products	…	Total
Original price
Beginning balance​
– Purchased during the year
– Completed construction investment
– Other increases
– Switch to investment real estate
– Liquidation, sale
– Other discounts
Accumulated depreciation
Beginning balance
– Depreciation during the year
– Other increases
– Switch to investment real estate
– Liquidation, sale
– Other discounts
Remaining value
– At the beginning of the year
– At the end of the year, the revaluation was made.

– The remaining value at the end of the period of tangible fixed assets used as mortgage or pledge to secure loans;

– Description of perennial plants for periodic products and working animals (if any);

– Detailed explanation of the list of tangible fixed assets that are currently in existence and have been liquidated/sold/transferred during the period with a value ratio of 10% or more of total assets);

– Fixed assets at the end of the year have been fully depreciated but are still in use;

– Fixed assets awaiting liquidation at the end of the year;

– Commitments to purchase and sell tangible fixed assets of great value in the future;

– Other changes in tangible fixed assets.

10. Increase and decrease of intangible fixed assets (Clearly state the basis for revaluation, if unable to re-evaluate, explain the reason):

Item	Land use rights	Copyright	Industrial property rights	Software	…	Total
Original price
Beginning balance​
– Purchased during the year
– Created from within the enterprise
– Increase due to business consolidation
– Other increases
– Liquidation, sale
– Other discounts
Accumulated depreciation​
Beginning balance
– Depreciation during the year
– Other increases
– Liquidation, such as sale
– Other discounts
Remaining value
– On New Year’s Day
– At the end of the year, the revaluation was made.

– Detailed explanation of the list of existing intangible fixed assets and those liquidated/sold / transferred during the period with a value of 10% or more of the total asset value;

– The remaining value at the end of the period of intangible fixed assets used as mortgage or pledge to secure loans ;

– Intangible fixed assets have been fully depreciated but are still in use;

– Change depreciation method;

– Data explanation and other explanations.

11. Increase or decrease in financial leased fixed assets (State clearly the basis for revaluation; if revaluation is not possible, explain the reason):

Item	House, architectural object	Machinery and equipment	Means of transport and transmission	…	Total​
Original price
Beginning balance​
– Financial lease during the year
– Purchase of financial leased fixed assets
– Other increases
– Return of leased fixed assets
– Other discounts
Accumulated depreciation
Beginning balance
– Depreciation during the year
– Purchase of financial leased fixed assets
– Other increases
– Return of leased fixed assets
– Other discounts
Remaining value
– On New Year’s Day
– At the end of the year, the revaluation was made.

– Additional rentals are recognized as expenses during the year;

– Basis for determining additional rent;

– Lease renewal terms or right to purchase the asset;

– Detailed explanation of the list of existing leased fixed assets with a value of 10% or more of the total value of leased fixed assets.

12. Biological assets
13. 1. Other biological assets , except animals that periodically produce products that reach maturity

Indicators	End of the year		Beginning of the year
	Original price	Net realizable value​​	Original price	Preventive
1. Livestock that takes products once
2. Seasonal crops or one-time products
3. Animals for periodic production that have not yet reached maturity

– Description of biological assets whose value accounts for 10% or more of the total value of biological assets: nature and characteristics of each type of biological asset, accounting policies applied to each type of biological asset,…

– Method of allocating care and cultivation costs during the period for parent biological assets, newly created biological assets, agricultural products,…

– The value of biological assets used as collateral to secure payable debts at the end of the period.

– Explain other issues related to biological assets.

12.2 . Animals for production periodically reach maturity

Item	Animals for products​	…	…	…	Total​
Original price
Beginning balance
– Purchased during the year
– Liquidation, sale
– Other discounts
Ending balance
Accumulated depreciation
Beginning balance
– Depreciation during the year
– Other increases
– Liquidation, sale
– Other discounts
Ending balance
Remaining value
– On New Year’s Day
– At the end of the year

13. Increase or decrease in investment real estate (Clearly state the basis for re-evaluation . If re-evaluation is not possible, explain the reason):

Item	Beginning of the year number	Increase during the year	Down in the year	Year-end number
a) Investment real estate for rent
Original price				Not presented
– Land use rights – Home – House and land use rights – Infrastructure
Accumulated depreciation				Are not present
– Land use rights – Home – House and land use rights – Infrastructure
Remaining value
– Land use rights – Home – House and land use rights – Infrastructure				Presentation at recoverable amount
real estate held for price increase Original price – Land use rights – Home – House and land use rights – Infrastructure Loss due to impairment – Land use rights – Home – House and land use rights – Infrastructure Remaining value – Land use rights – Home – House and land use rights – Infrastructure

– The remaining value at the end of the period of the investment real estate used as mortgage or pledge to secure the loan.

– Real estate has been fully depreciated but is still for rent.

– Detailed explanation of the list of existing investment real estate and those liquidated/sold during the period with a value of 10% or more of the total investment real estate value.

– Data explanation and other explanations.

pending allocation costs are calculated until the official cessation of operations (details for each expense content)

Item	End of the year	Beginning of the year
– Prepaid rental costs for multiple periods;	…	…
– Insurance costs for multiple periods;	…	…
– Other items (detail if possible).	…	…
Add	…	…

15. Other assets (State clearly the basis for re-evaluation. If re-evaluation is not possible, explain the reason ) :

Item	End of the year		Beginning of the year
	Re-evaluation price	Original price	Re-evaluation price	Original price
Details by item	…	…	…	…
1 …………….	…	…	…	…
2 ……………	…	…	…	…
3 ……………	…	…	…	…
Add​​	…		…

16. Loans and financial lease debt

	End of the year	During the year		Beginning of the year
		Increase	Reduce
a) Loan	…	…	…	…
Add	…	…	…	…

1. b) Paid financial lease debts

Duration	This year			Last year​
	Total lease payments	Pay rent​​​	Principal repayment	Total finance lease payments	Pay interest​	Debt repayment origin
1 year or less
Over 1 year to 5 years
Over 5 years

1. c) Financial lease debt value

	End of the year		Beginning of the year
	Re-evaluation price	Original price	Re-evaluation price	Original price
– Principal of financial lease debt	…	…	…	…
– Finance lease interest payable	…	…	…	…
Add	…		…

1. d) Overdue and unpaid loans and financial lease debts

	End of the year		Beginning of the year
	Origin	Interest	Origin	Interest
– Get a loan;	…	…	…	…
– Financial leasing debt;	…	…	…	…
– Reason for non-payment	…	…	…	…
Add	…		…

1. d) Detailed explanation of loans and financial lease debts to related parties
2. Payable to seller

	End of the year	Beginning of the year
a) Payables to vendors	…	…
– Details for each subject accounting for 10% or more of the total payable to the seller;	…	…
– Payable to other entities	…	…
Add	…	…
b) Unpaid overdue debt	…	…
– Details of each subject accounting for 10% or more of the total overdue;	…	…
– Other subjects	…	…
Add​​	…	…
c) Payable to related parties (details for each entity)	…	…

18. Must pay dividends and profits

Item	End of the year	Beginning of the year
Must pay dividends, profits	…	…

– Explanation of the deadline for paying dividends or profits in cash, non-cash assets to shareholders, owners,…;

– Dividends and profits that have been committed to be paid but have not been paid by the deadline to shareholders and owners…

19. Taxes and other payments to the state

Item	Beginning of the year	Amount payable during the year	Amount actually paid during the year	End of the year
a) Must pay (details of each tax type)	…	…	…	…
Add	…	…	…	…
b) Receivables (details of each tax type)	…	…	…	…
Add	…	…	…	…

In case an enterprise is subject to additional corporate income tax payment according to the regulations on global minimum tax, it must explain the criteria or basis for recording the additional corporate income tax payable in the reporting year as well as the adjusted tax liability due to the difference between the tax declaration year and the year of recording additional corporate income tax expenses according to the regulations on global minimum tax, etc.

20. Expenses payable

Item	End of the year	Beginning of the year
– Advance payment of salary expenses during leave;	…	…
– Costs during business downtime;	…	…
– Other provisions;	…	…
– Interest payable	…	…
– Other items (details of each item)	…	…
Add​​	…	…

21. Other payables

Item	End of the year	Beginning of the year
a) Details according to each detailed content
– Surplus assets awaiting resolution;	…	…
– Union fees;	…	…
– Social insurance;	…	…
– Health insurance;	…	…
– Unemployment insurance;	…	…
– Receive deposits and bets;	…	…
– Other payables.	…	…
b) Amount of unpaid overdue debt (details of each item, clearly stating the reason for unpaid overdue debt)	…	…

22. Revenue awaiting allocation

Item	End of the year	Beginning of the year
a) Revenue awaiting allocation	…	…
– Revenue from traditional customer programs;	…	…
– Other revenue awaiting allocation .	…	…
b) Possibility of not being able to perform the contract with the customer (details of each item, reasons for not being able to perform).	…	…

23. Bonds issued

23.1. Regular bonds (details by type)	End of the year	Beginning of the year
a) Issued bonds	…	…
– Type issued at par value;	…	…
Discounted issue type ;	…	…
– Premium release type.	…	…
Add	…	…
b) Detailed explanation of bonds held by related parties (by type of bond)	…	…
c) Bond issuance costs	…	…
Add	…	…

Enterprises must explain in detail the time of issuance; the quantity of each type of bond issued; the interest rate of the bond issued; the principal term of the bond issued according to each group of bonds issued at par value, with discount or premium; the method of allocating the discount or premium, the cost of issuing bonds, etc.

23.2. Convertible bonds:

Enterprises must explain information about:

1. a) Convertible bonds at the beginning of the period:

– Issuance date, original term and remaining term of each type of convertible bond;

– Quantity, face value, interest rate of each type of convertible bond;

– Conversion rate into shares of each type of convertible bond;

– Discount rate used to determine the principal value of each type of convertible bond;

– The value of the principal and stock option portion of each type of convertible bond.

1. b) Additional convertible bonds issued during the period:

– Time of issuance, original term of each type of convertible bond;

– Quantity, face value, interest rate of each type of convertible bond;

– Conversion rate into shares of each type of convertible bond;

– Discount rate used to determine the principal value of each type of convertible bond ;

– The value of the principal and stock option portion of each type of convertible bond.

1. c) Convertible bonds converted into shares during the period:

– Number of each type of bond converted into shares during the period; Number of additional shares issued during the period to convert bonds;

– The principal value of convertible bonds is recorded as an increase in equity.

1. d) Mature convertible bonds are not converted into shares during the period:

– Number of each type of matured bonds not converted into shares during the period;

– The principal value of the convertible bond is returned to the investor.

1. d) Convertible bonds at the end of the period:

– Original term and remaining term of each type of convertible bond;

– Quantity, face value, interest rate of each type of convertible bond ;

Conversion rate into shares of each type of convertible bond;

– Discount rate used to determine the principal value of each type of convertible bond;

– The value of the principal and stock option portion of each type of convertible bond.

1. e) Detailed explanation of convertible bonds held by related parties (explanatory content is similar to items a, b, c, d, dd above)
2. Preferred shares classified as liabilities

– Face value;

– Issued subjects (management, officers, employees, other subjects);

– A repurchase clause or obligation to pay dividends at a fixed level regardless of the issuer’s performance (Time, repurchase price, other basic terms in the issuance contract);

– Value repurchased during the period;

– Other explanations.

25. Provisions for payables

Item	Beginning of the year	End of the year
Details by type of payable provision	…	…

– Enterprises must explain information about legal obligations or joint obligations, basis for estimating the value (if any),… of the obligation to restore the environment, clean up, restore, and return the site.

– Detailed explanation of the total estimated cost that the enterprise must pay to provide severance pay to employees according to the provisions of labor law.

26. Deferred income tax assets and deferred income tax liabilities
27. a) Deferred income tax assets:

Item	End of the year	Beginning of the year
– Corporate income tax rate used to determine the value of deferred income tax assets	…	…
– Deferred income tax assets related to deductible temporary differences	…	…
– Deferred income tax assets related to unused tax losses	…	…
– Deferred income tax assets related to unused tax incentives	…	…
– Amount offset against deferred income tax payable	…	…
Deferred income tax assets	…	…

1. b) Deferred income tax payable

Item	End of the year	Beginning of the year
– Corporate income tax rate used to determine the value of deferred income tax payable	…	…
– Deferred income tax liabilities arising from taxable temporary differences	…	…
– Amount offset against deferred income tax assets	…	…

27. Owner’s equity
28. a) Equity fluctuation comparison table

	Items of equity
	Owner’s equity	Capital surplus​	Bond conversion option	Other owners ‘ equity	in asset revaluation	Exchange rate difference​​	Undistributed profit after tax and funds	Other items …​	Add
A	1	2	3	4	5	6	7	8	9
Last year’s opening balance
– Capital increase in previous year
– Profit in the previous year
– Other increases
– Reduce capital in last year
– Loss in the previous year
– Other discounts
Beginning balance of this year
– Capital increase this year
– Profit this year
– Other increases
– Reduce capital this year
– Loss this year
– Other discounts
Ending balance​

1. b) Details of owner’s capital contribution

Item	End of the year	Beginning of the year
– Contributed capital of parent company (if it is a subsidiary)	…	…
– Capital contributions of other entities	…	…
Add	…	…

1. c) Capital transactions with owners and dividend and profit distribution

Item	This year	Last year
– Owner’s capital	…	…
+ Beginning capital contribution	…	…
+ Capital increase during the year	…	…
+ Capital contribution decreased during the year	…​	…
+ Year-end capital contribution	…	…
– Dividends , distributed profits	…	…

1. d) Stocks

Item	End of the year	Beginning of the year
Number of shares registered for issuance	…	…
– Number of shares sold to the public	…	…
+ Common stock	…	…
+ Preferred stock (classified as equity )	…	…
– Number of shares repurchased (treasury shares, own shares repurchased).	…	…
+ Common stock	…	…
+ Preferred stock (classified as equity)	…	…
Number of shares outstanding	…	…
+ Common stock	…	…
+ Preferred stock (classified as equity)	…	…

* Par value of outstanding shares: ………………………….

1. d) Dividends and profits

– Dividends and profits declared after the end of the accounting year:

+ Dividends and profits declared on common stock or charter capital: …………

+ Dividends declared on preferred shares: …………

+ Stock dividends: …………

+ Profits are divided to supplement the charter capital of the invested enterprise:….

– Unrecorded cumulative preferred stock dividends: …………

1. e) Reasons for increase/decrease in items belonging to the enterprise’s equity

– Capital surplus;

Bond conversion option ;

– Development investment fund;

– Own repurchased shares;

– Other equity funds.

1. g) Income and expenses, profits or losses are recorded directly in equity according to the provisions of specific Vietnamese Accounting Standards.
2. Price difference​​​ property back

Item	This year	Last year
Reasons for changes between the beginning and end of the year numbers (revaluation in which cases, which assets are revalued, according to which decision?…)	…	…

29. Exchange rate difference

Item	This year	Last year
– Exchange rate difference due to conversion of financial statements prepared in foreign currency into VND	…	…
– Exchange rate differences arise due to various reasons (specify the reasons)	…	…​

30. Items outside the Statement of Financial Position

	End of the year	Beginning of the year
a) Leased assets: The total future minimum lease payments for non-cancelable operating leases over the terms
– 1 year or less;	…	…
– Over 1 year to 5 years;	…	…
– Over 5 years;	…	…

1. b) Assets accepted for safekeeping, consignment, processing, and import-export consignment:

– Materials and goods received for safekeeping or processing: Enterprises must explain in detail the quantity, type, specifications, and quality of each type and group of materials and goods at the end of the period.

– Goods accepted for sale, consignment, or export on consignment: Enterprises must explain in detail the quantity , type, specifications, and quality of each type and group of goods.

1. c) Infrastructure assets excluding state capital components in enterprises: Enterprises must explain the original price and accumulated depreciation value according to relevant laws.
2. d) Assets of the enterprise used for pledge or mortgage: The enterprise must explain in detail each type of asset used for pledge or mortgage; each term and object of pledge or mortgage,…
3. d) Foreign currencies of all kinds: Enterprises must explain in detail the quantity of each type of foreign currency calculated in original currency.

And currency: Enterprises must present volumes in domestic units.

Precious metals and gemstones: Enterprises must explain in detail the original price, quantity and types of precious metals and gemstones.

1. e) Bad debts that have been resolved: Enterprises must explain in detail the value (in original currency and VND) of bad debts that have been resolved within 10 years from the date of resolution according to each subject and reason for the deletion of bad debts from the accounting books.
2. g) Interest on deferred and installment payments when purchasing assets: Enterprises must explain the total amount of deferred and installment payments when purchasing assets, the number of deferred and installment periods; the interest paid in deferred and installment payments each period, and the interest paid in deferred and installment payments remaining to be paid at the end of the period.
3. h) Interest on deferred and installment payments when selling assets: Enterprises must explain the total amount of deferred and installment payments when selling assets, deferred and installment payment periods; received deferred and installment payments, and remaining deferred and installment payments receivable at the end of the period.
4. i) Other information on items outside the Financial Statements.
5. The value of assets that the enterprise is holding from other parties but is limited in use due to legal restrictions or debts that the enterprise is obliged to pay according to the contract agreement or according to the provisions of law (for example, assets under a BCC contract, amounts of money blocked when a public company issues/offers shares to raise capital from shareholders, etc.)

Item (Depending on the content of the item to explain appropriately to the reality of the business)	This year	Last year
Asset
– Cash and cash equivalents	…	…
– Accounts receivable	…	…
– Inventory	…	…
– Fixed assets	…	…
– Real estate investment	…	…
– Other assets	…	…
Add	…	…
Liabilities
– Payable to seller	…	…
– Must repay loan	…	…
– Costs payable	…	…
– Other payables	…	…
Add	…	…

32. Other information that the enterprise deems necessary to explain and provide useful information to users .

– Explain information on the basis for determining the value of non-monetary assets sponsored or donated;

– Other information.

1. Additional information for items presented in the Income Statement

Unit of measurement:… …….

Item	This year	Last year
1. Total revenue from sales and services
a) Revenue	…	…
– Revenue from sales of products and goods;	…	…
– Revenue from providing services (except construction services)	…	…​
– Construction service revenue :	…	…
+ Construction service revenue arising during the period	…	…
cumulative revenue of construction services recorded up to the end of the accounting period	…	…
– Subsidy and subsidy revenue;	…	…
– Other revenue;	…	…
Add	…	…
b) Revenue from related parties (details by subject ).	…	…

1. c) In case an enterprise generates revenue from the sale of tourist apartments, office apartments combined with accommodation or similar products, it must explain in the Financial Statements the accounting policies, the nature of the contract (rights and obligations of the parties) and the accounting recording method that the enterprise considers most appropriate.
2. d) Explain the term, characteristics , value,… to determine and record revenue corresponding to each sales component, lease component, and financial component.
3. Revenue deductions

	This year	Last year
Trade discounts ;	…	…
– Sales discount;	…	…
– Revenue from returned goods;	…	…
Add	…	…

3. Cost of goods sold

Item	This year	Last year​
– Cost of products and goods sold ( minus remaining value and costs of selling and liquidating investment real estate);	…	…
– Cost of services provided (including cost of construction services);	…	…
– Value of inventory lost during the period;	…	…
– Value of each type of inventory lost beyond the norm during the period;	…	…
– Production costs exceeding normal levels are charged directly to cost of goods sold;	…	…
– Amounts written down for cost of goods sold	…	…
Add	…	…

4. Profit / loss from sale and liquidation of investment real estate

Item	This year	Last year
– Revenue from sale and liquidation of investment real estate	…	…
– Remaining value of investment real estate	…	…
– Cost of transfer and liquidation of investment real estate	…	…
Profit /loss from sale and liquidation of investment real estate	…	…

5. Financial operating revenue

Item	This year	Last year
– Interest on deposits and loans	…	…
– Profit from sale and liquidation of financial investments;	…	…
– Dividends and profits distributed in cash or non-monetary assets;	…	…
– Exchange rate difference;	…	…
– Interest on sales on deferred payment and installment payments;	…	…
– Payment discount enjoyed;	…	…
– Other financial revenue.	…	…
Add	…	…

6. Financial costs​​

Warehouse​​ item	This year	Last year
– Borrowing costs;	…	…
– Losses from sale and liquidation of financial investments;	…	…
– Exchange rate difference loss;	…	…
– Interest on purchases on deferred payment or installment payments;	…	…
– Payment discounts payable;	…	…
– Other financial costs;	…	…
– Financial expense deductions.	…	…
Add	…	…

7. Other income

	This year	Last year
– Liquidation and sale of fixed assets;	…	…
– Profit from revaluation of assets when contributing capital;	…	…
– Fines collected;	…	…
– Tax reduction;	…	…
– Other income.	…	…
Add​​	…	…

8. Other expenses

Item	This year	Last year
– Remaining value of fixed assets and costs of liquidation and sale of fixed assets;	…	…
– Loss due to revaluation of assets when contributing capital;	…	…
– Fines;	…	…
– Other expenses.	…	…
Add​​	…	…

9. Selling expenses and business management expenses

Item	This year	Last year
a) Business management expenses incurred during the period	…	…
– Details of items accounting for 10% or more of total business management costs;	…	…
– Other administrative expenses.	…	…
b) Selling expenses incurred during the period	…	…
– Details of items accounting for 10% or more of total cost of sales ;	…	…
– Other selling expenses.	…	…
c) Amounts recorded to reduce selling expenses and business management expenses	…	…
– Return of warranty provisions for products, goods, and construction works	…	…
– Reversal of restructuring provisions and other provisions;	…	…
– Other deductions	…	…

10. Production and business costs by factor

Item	This year	Last year
– Cost of raw materials;	…	…
– Labor costs;	…	…
– Fixed asset depreciation costs;	…	…
– Outsourcing service costs;	…	…
– Other expenses in cash.	…	…
Add	…	…

Note :

For the explanation of the indicator “Production and business costs by element”, depending on the characteristics, production and business lines and based on the opening balance and the number of related accounting accounts arising during the period , the enterprise will explain in detail the production and business costs by element reflected in the Business Performance Report.

In case due to the nature of the business, the enterprise cannot present the information elements on the Business Performance Report according to the function of the cost, it shall be presented according to the nature of the cost. When presenting the explanation of production and business costs by element, it must ensure that the total production and business costs by element must equal the total costs recorded in the Business Performance Report. Enterprises have the right to choose other bases but must ensure full explanation of costs by element.

1 1. Corporate income tax expense

	This year	Last year
– Pre-tax accounting profit	…	…
– Tax calculated at current corporate income tax rate	…	…
Adjust (depending on the characteristics of the business to explain the appropriate adjustment items) :	…	…
– Tax-free income	…	…
– Non-deductible expenses	…	…
– Shortage/(excess) provisions of previous years	…	…
…	…	…
Corporate income tax expense	…	…
Current corporate income tax expense	…	…
Deferred corporate income tax expense (**)	…	…
Corporate income tax expense (*)	…	…

income tax expense for the fiscal year is estimated based on taxable income and may be adjusted depending on tax authority inspection.

Deferred corporate income tax expense	This year	Last year
– Deferred corporate income tax expense arising from taxable temporary differences;	…	…
– Deferred corporate income tax expense arising from the reversal of deferred income tax assets;	…	…
– Deferred corporate income tax income arising from deductible temporary differences;	(…)	(…)
– Deferred corporate income tax income arising from unused tax losses and tax incentives;	(…)	(…)
– Deferred corporate income tax income arising from the reversal of deferred income tax liabilities;	(…)	(…)
– Total deferred corporate income tax expense.	…	…

VII. Additional information for items presented in the Cash Flow Statement

1. Cash and cash equivalents not used:

Explain in detail the value and reasons for each amount of cash and cash equivalents that the enterprise is holding but cannot use due to legal restrictions or other constraints that the enterprise must fulfill.

Non -cash transactions affect future cash flow statements

	This year	Last year
– Purchase of assets by taking on directly related liabilities or through financial leasing transactions;	…	…
– Buying businesses through issuing shares ;	…	…
into equity ;	…	…
– Other non-monetary transactions	…	…

3. Actual loan amount collected during the period :

– Proceeds from borrowing under conventional contracts;

– Proceeds from issuance of regular bonds;

– Proceeds from issuing convertible bonds;

– Proceeds from issuance of preferred shares are classified as liabilities;

– Proceeds from government bond repurchase and securities REPO transactions ;

– Proceeds from borrowing in other forms.

4. Amount actually paid back during the period:

– Principal repayment of loan under normal contract;

– Principal repayment of regular bonds;

– Principal repayment of convertible bonds ;

– Principal repayment of preferred stock is classified as a liability ;

– Payment for government bond repurchase and securities REPO transactions;

– Debt repayment in other forms.

5. Purchase and disposal of subsidiaries during the reporting period

– Total value of purchases or liquidations of subsidiaries during the period;

– The portion of the purchase or liquidation value of a subsidiary paid in cash and cash equivalents;

– The amount of cash and cash equivalents actually held in the subsidiary or other business unit acquired or disposed of;

– The value of assets (summary by type of asset) other than cash and cash equivalents and liabilities in subsidiaries purchased or liquidated during the period.

VIII. Other information

1. Contingent liabilities, commitments and other financial information: …………
2. Events occurring after the end of the accounting period: ………………………………
3. Information about related parties (in addition to the information explained in the above sections).
4. Present assets, revenue, and business results by segment (by business sector or geographical area) in accordance with the provisions of Vietnamese Accounting Standard No. 28 – Segment reporting

(1):….

(2):…

5. Comparative information (changes in information in the Financial Statements of previous accounting periods): ……………………………………………………………………………………
6. Other information ……………………………………………………………………

 

Approved, date… month… year…

PREPARED BY (Signature, full name)

CHIEF ACCOUNTANT (Signature, full name)

LEGAL REPRESENTATIVE ( Signature , full name, seal)

 

Interim financial statement (full form)

Reporting unit: ……………… Address: …………………………

Form B 01a – DN (Attached to Circular No. 99/ 2025 /TT-BTC dated October 27, 2025 of the Minister of Finance)

 

INTERIM FINANCIAL STATEMENT

(Full form)

On the date…. month…. year ………

Unit: ………

ASSET	Code​	Explanation	Quarterly balance	Beginning of the year number
1	2	3	4	5
A – SHORT-TERM ASSETS (100)=110+120+130+140+150	100
I. Cash and cash equivalents	110
1. Money	111
… (*)

 

Approved, date… month … year…

PREPARED BY (Signature , full name)

CHIEF ACCOUNTANT (Signature , full name)

LEGAL REPRESENTATIVE ( Signature , full name , seal )

 

Interim income statement (full form)

Reporting unit: ……………… Address: …………………………

Form No. B 02a – DN (Attached to Circular No. 99/ 2025 /TT-BTC dated October 27, 2025 of the Minister of Finance)

 

INTERIM BUSINESS PERFORMANCE REPORT

(Full form)

Accounting period from date…. to date….

Unit: ………

TARGETS	Code​	Explanation	Dear…..		Accumulated from the beginning of the year to the end of this quarter
			This year	Last year	This year	Last year
1	2	3	4	5	6	7
service revenue	01
… (*)

 

Approved, date… month… year…

PREPARED BY (Signature , full name)

CHIEF ACCOUNTANT (Signature , full name)

LEGAL REPRESENTATIVE ( Signature , full name , seal )

 

Interim cash flow statement ( full form )

Reporting unit: ……………… Address: …………………………

Form No. B 03a – DN (Attached to Circular No. 99/ 2025 /TT-BTC dated October 27, 2025 of the Minister of Finance)

 

INTERIM CASH FLOW STATEMENT

(Full form)

(By direct method)

Accounting period from date…. to date….

Unit: ………

Indicators	Code	Theory​​	Accumulated from the beginning of the year to the end of this quarter
			This year	Last year
1	2	3	4	5
I. Cash flow from operating activities
1. Revenue from sales, services and other revenues	01
2. Payments to suppliers of goods and services	02
…(*)

Approved, date… month… year…

PREPARED BY (Signature , full name)

CHIEF ACCOUNTANT (Signature , full name)

LEGAL REPRESENTATIVE ( Signature , full name , seal )

 

Reporting unit: ……………… Address: …………………………

Form No. B 03a – DN (Attached to Circular No. 99/ 2025 /TT-BTC dated October 27, 2025 of the Minister of Finance)

 

INTERIM CASH FLOW STATEMENT

(Full form)

(By indirect method)

Accounting period from date…. to date….

Unit: ..……

Indicators	Code​	Explanation	Accumulated from the beginning of the year to the end of this quarter
			This year	Last year
1	2	3	4	5
Cash flow from operating activities
1. Profit before tax	01
2. Adjustments for the amounts
– Depreciation of fixed assets and investment real estate	02
… (*)

Approved, date… month… year…

PREPARED BY (Signature , full name)

CHIEF ACCOUNTANT (Signature , full name)

LEGAL REPRESENTATIVE ( Signature , full name , seal )

 

Selected Financial Statements

Reporting unit : ……………… Address: … … ……………………

Form No. B 09 a – DN (Attached to Circular No. 99/2025 / TT-BTC dated October 27, 2025 of the Minister of Finance)

 

NOTES TO SELECTED FINANCIAL STATEMENTS
Accounting period from date…. to date….

1. Characteristics of business operations
2. Form of capital ownership.
3. Business field.
4. Business lines
5. Characteristics of the enterprise’s business activities during the accounting period that affect the Financial Statements.
6. Accounting period, currency used in accounting
7. Annual accounting period (starting from … /…/… ending on …/…/…).
8. Currency used in accounting.

III. Applicable accounting standards and regimes

1. Applicable accounting regime.
2. Declaration on compliance with Vietnamese Accounting Standards and Accounting Regime
3. Applicable accounting form.
4. Applicable accounting policies

Enterprises must disclose that the preparation of the interim financial statements and the most recent annual financial statements apply the same accounting policies. In case of changes, they must describe the changes and clearly state the impact of those changes.

1. Significant events or transactions during the interim accounting period
2. Explain the seasonality or cyclicality of business activities during the interim accounting period.
3. Present the nature and amount of items affecting assets, liabilities, equity, net income or cash flows that are unusual because of their nature, size or incidence.
4. Present the changes in equity and accumulated value as of the date of the Interim Financial Statements, as well as the corresponding comparative notes of the same accounting period of the most recent previous financial year.
5. The nature and amount of changes in accounting estimates reported in prior interim reports of the current fiscal year or changes in accounting estimates reported in prior periods, if those changes have a material effect in the current interim period.
6. Describe the issuance, repurchase and repayment of debt and equity securities.
7. Dividends paid (total or per share) on common and preferred shares (applicable to joint stock companies).
8. Present revenue and operating results by business segment or geographical area based on the division of segment reporting (Applicable to listed companies).
9. Present any significant events occurring after the end of the interim period that have not been reflected in the Interim Financial Statements .
10. Describe the changes in contingent liabilities or contingent assets since the end of the most recent annual accounting period.
11. Other information.

 

Approved, date… month… year…

PREPARED BY (Signature , full name)

CHIEF ACCOUNTANT (Signature , full name)

LEGAL REPRESENTATIVE ( Signature , full name , seal )

 

11. Interim financial statement ( summary form )

Reporting unit: ……………… Address: …………………………

Form No. B 01b – DN (Attached to Circular No. 99/ 2025 /TT-BTC dated October 27, 2025 of the Minister of Finance)

 

INTERIM FINANCIAL STATEMENT

(Summary)

On the date…. month…. year

Unit: ……….

ASSET	Code	Explanation	Quarterly balance	Beginning of the year number
1	2	3	4	5
A – SHORT-TERM ASSETS (100=110+120+130+140+150+ 160)	100
I. Cash and cash equivalents	110
II. Short-term financial investments	120
III. Short-term receivables	130
IV. Inventory	140
V. Short-term biological assets	150
VI. Other short-term assets	160
B – LONG-TERM ASSETS (200 = 210 + 220 + 230 + 240 + 250 + 260 + 270)	200
I. Long-term receivables	210
II. Fixed assets	220
III. Long-term biological assets	230
IV. Investment real estate	240
Long-term unfinished assets	250
VI. Long-term financial investment	260
VII. Other long-term assets	270
TOTAL ASSETS (280 = 100 + 200)	280
CAPITAL​​
A – LIABILITIES PAYABLE (300 = 310 + 330)	300
I. Short-term debt	310
II. Long-term debt	330
B – OWNER’S EQUITY	400
TOTAL CAPITAL (440 = 300 + 400)	440

Approved, date… month… year…

PREPARED BY (Signature , full name)

CHIEF ACCOUNTANT (Signature , full name)

LEGAL REPRESENTATIVE ( Signature , full name , seal )

 

Mid-year business performance report (summary form )

Reporting unit: ……………… Address: …………………………

Form No. B 02b – DN (Attached to Circular No. 99/ 2025 /TT-BTC dated October 27, 2025 of the Minister of Finance)

 

INTERIM BUSINESS PERFORMANCE REPORT

( Summary )

Accounting period from date…. to date….

Unit: ……. …

TARGETS	Code​	Explanation	Dear …..		Accumulated from the beginning of the year to the end of this quarter
			This year	Last year	This year	Last year
1	2	3	4	5	6	7
1. Sales and service revenue	01
2. Financial revenue and other income	31
3. Total accounting profit before tax	50
4. Profit after corporate income tax	60

Approved, date… month… year…

PREPARED BY (Signature , full name)

CHIEF ACCOUNTANT (Signature , full name)

LEGAL REPRESENTATIVE ( Signature , full name , seal )

 

13. Interim cash flow statement (summary form )

Reporting unit: ……………… Address: …………………………

Form No. B 03b – DN (Attached to Circular No. 99/ 2025 /TT-BTC dated October 27, 2025 of the Minister of Finance)

 

CASH FLOW STATEMENT

(Summary)

Accounting period from date…. to date….

Unit: ………..

TARGETS	Code​	Explanation	Dear …..		Accumulated from the beginning of the year to the end of this quarter
			This year	Last year	This year	Last year
1	2	3	4	5	6	7
1. Net cash flow from operating activities	20
2. Net cash flow from investing activities	30
3. Net cash flow from financing activities	40
4. Net cash flow during the period (50= 20+30+40)	50
5. Cash and cash equivalents at the beginning of the period	60
6. Impact of changes in foreign exchange rates	61
7. Effect of reclassification of end-of-period cash equivalents	62
8. Cash and cash equivalents at the end of the period (70 = 50+60+61+62)	70

Approved, date… month… year…

PREPARED BY (Signature , full name)

CHIEF ACCOUNTANT (Signature , full name)

LEGAL REPRESENTATIVE ( Signature , full name , seal )

 

14. Explanatory note to Selected Financial Statements (Following Form No. B0 9a-DN)

 

SECTION 2

CONTENT AND METHOD OF PREPARING FINANCIAL REPORTS

1. General information about the business

In the annual financial report, the enterprise must present the following general information:

– Name and address of the reporting enterprise;

– Clearly state whether this Financial Statement is the enterprise’s separate Financial Statement, the consolidated Financial Statement or the parent company’s or group’s consolidated Financial Statement;

– Accounting period end date;

– Financial Report Approval Date;

– Currency used for accounting records;

– Currency used to prepare and present Financial Statements.

1. Instructions for preparing and presenting the Annual Financial Statement
2. Prepare and present the Financial Statement of the enterprise meeting the going concern assumption

1.1. Purpose of the Financial Statement

The Financial Situation Report is a consolidated Financial Report, reflecting the overall value of the existing assets and the sources of those assets of the enterprise at a certain point in time. The data on the Financial Situation Report shows the total value of the existing assets of the enterprise according to the structure of the assets and the structure of the capital sources that form those assets . Based on the Financial Situation Report, it is possible to comment on and evaluate the general financial situation of the enterprise.

1.2. Principles of preparing and presenting Financial Statements

1.2.1. According to the provisions of Vietnamese Accounting Standard No. 21 – Presentation of Financial Statements, when an enterprise prepares and presents a Financial Statement, it must comply with the general principles of preparing and presenting Financial Statements . In addition, on the Financial Statement, the Assets and Liabilities items must be presented separately as short-term and long-term according to the provisions of Article 20 of this Circular.

1.2.2. When preparing the consolidated financial statement between the enterprise and its affiliated units, the enterprise must eliminate all balances of items arising from internal transactions, such as receivables, payables, internal loans, etc. between the enterprise and its affiliated units, and between affiliated units.

The technique of excluding internal items when consolidating reports between enterprises and affiliated units is performed similarly to the technique of consolidating financial statements.

1.2.3. Indicators without figures are exempted from presentation on the Financial Status Report. Enterprises proactively renumber the indicators according to the principle of continuity in each section but are not allowed to renumber the indicator “Code”.

1.3. Mechanism Financial Statement Preparation

– Based on the general ledger;

– Based on detailed accounting books, cards or detailed summary tables;

– Based on the previous year’s Financial Situation Report (to present the beginning of the year column).

1.4. Contents and methods of preparing indicators in the Financial Status Report of an enterprise that meet the going concern assumption ( Form B01 – DN)

1. a) Short-term assets (Code 100)

Current assets reflect the total value of cash, cash equivalents and other short-term assets that can be converted into cash, can be sold or used within a period of no more than 12 months or within a normal business cycle from the end of the accounting period, including: Cash, cash equivalents, short-term financial investments, short-term receivables, inventories, short-term biological assets and other short-term assets .

Code 100 = Code 110 + Code 120 + Code 130 + Code 140 + Code 150 + Code 160.

– Cash and cash equivalents (Code 110)

This is a summary indicator reflecting the total amount of cash and cash equivalents currently available to the enterprise at the end of the accounting period, including: Cash in funds, demand deposits, cash in transit and cash equivalents of the enterprise. For cash and cash equivalents that the enterprise is restricted from using, they are not presented in this indicator but must be presented in the indicator Other current assets (Code 165) or Other long-term assets (Code 274).

Code 110 = Code 111 + Code 112.

+ Money (Code 111)

This is an indicator that reflects the total amount of money available to the enterprise at the end of the accounting period, including: Cash in the enterprise’s fund, non-term deposits at banks,… according to the provisions of law and money in circulation . The data to be recorded in the “Cash” indicator is the total detailed debit balance of Accounts 111 – Cash, Account 112 – Demand deposits and Account 113 – Cash in transit (including only amounts of money that the enterprise is not restricted from using) at the end of the accounting period. In addition, during the preparation of the Financial Position Statement, if it is found that the amounts of money reflected in other indicators satisfy the definition of money, they will be presented in this indicator .

+ Cash equivalents (Code 1 12)

This indicator reflects short-term investments with a recovery period of no more than 3 months from the investment date, which can be easily converted into a certain amount of cash and have no risk of conversion into cash at the end of the accounting period.

The data to be recorded in this indicator is based on the detailed debit balance of Account 1281 – Term Deposits (details of term deposits with original terms of no more than 3 months) and Account 1288 – Other investments held to maturity (details of items that qualify for classification as cash equivalents but are not restricted by the enterprise). In addition, in the process of preparing the Financial Position Statement, if it is found that the items reflected in other accounts satisfy the definition of cash equivalents, the enterprise is allowed to present in this indicator. Cash equivalents may include: Bank bills, treasury bills, deposits with original maturity of not more than 3 months,…

Amounts previously classified as cash equivalents but overdue and not yet recovered must be presented in other indicators, in accordance with the content of each item.

– Short-term financial investments (Code 120)

Is a synthetic indicator reflecting the total value of short-term investments (after deducting provisions for devaluation of trading securities, provisions for short-term held-to-maturity investments and provisions for losses on other short-term investments), including: Securities held for business purposes, short-term held-to-maturity investments and other investments with remaining terms not exceeding 12 months from the end of the accounting period.

investments reflected in this indicator do not include short-term investments presented in the “Cash equivalents” indicator.

Code 120 = Code 121 + Code 122 + Code 123 + Code 124 + Code 125 + Code 126

+ Trading securities ( Code 121)

indicator reflects the value of securities and other financial instruments held for trading purposes at the end of the accounting period (held for the purpose of waiting for price increase to sell for profit). Trading securities include: stocks, bonds , other types of securities and financial instruments (fund certificates , stock purchase rights, warrants, call options, put options, futures contracts, commercial papers, bills of exchange, debts/loans bought and sold by enterprises for profit,…) . The data to be recorded in this indicator is the Debit balance of Account 121 – Trading securities at the end of the accounting period.

+ Provision for devaluation of trading securities (Code 122)

This indicator reflects the provision for devaluation of trading securities at the end of the accounting period . Data to be recorded in the indicator This is the Credit balance of Account 2291 – Provision for devaluation of trading securities at the end of the accounting period and is recorded in negative numbers in parentheses (…).

Short-term held-to-maturity investments (Code 123)

This indicator reflects investments held to maturity with a remaining term of 12 months or less from the end of the accounting period, such as term deposits, bonds , commercial papers, loans and other types of debt securities and not classified as cash equivalents. This indicator does not include investments held to maturity presented in the indicator “Cash equivalents” . The data to be recorded in this indicator is the detailed debit balance of Accounts 1281 – Term deposits, Account 1282 – Bonds, Account 1283 – Loans, Account 1288 – Other investments held to maturity at the end of the accounting period.

+ Short-term held-to-maturity investment reserve (Code 124 )

This indicator reflects the provision for short-term investments held to maturity at the end of the accounting period . The data to be recorded in this indicator is the detailed credit balance of Account 2292 – Provision for loss on investments in other entities (provision for short-term investments held to maturity) at the end of the accounting period and is recorded in negative numbers in the form of parentheses (…).

+ Other short-term investments (Code 125)

This indicator reflects investments in BCC contracts that the enterprise does not have joint control rights but enjoys benefits depending on the after-tax profit of the contract and has a remaining term of no more than 12 months at the end of the accounting period . The data to be recorded in this indicator is the detailed debit balance of Account 2281 – Capital investment in other units at the end of the accounting period.

+ Provision for losses on other short-term investments (Code 126)

This indicator reflects the provision for investments in BCC contracts in which the enterprise does not have joint control but enjoys secondary benefits. belongs to the after-tax profit of the contract and has a remaining term of no more than 12 months at the end of the accounting period . The data to be recorded in this indicator is the detailed credit balance of Account 2292 – Provision for investment losses in other units at the end of the accounting period and is recorded as a negative number in the form of parentheses (…).

– Short-term receivables (Code 130)

Is a synthetic indicator reflecting the total value of receivables with a remaining collection period of 12 months or less or within a normal business cycle from the end of the accounting period (after deducting provisions for short-term doubtful receivables), such as: Short-term receivables from customers, short-term prepayments to sellers, short-term internal receivables, receivables according to construction contract progress, other short-term receivables, provisions for short-term doubtful receivables, and assets awaiting resolution.

Code 130 = Code 131 + Code 132 + Code 133 + Code 134 + Code 135 + Code 136 + Code 137.

+ Short-term receivables from customers (Code 1 31)

This indicator reflects the amount of money still receivable from customers with a remaining collection period of 12 months or less or within a normal business cycle from the end of the accounting period . The data to be recorded in this indicator is based on the total detailed debit balance of Account 131 – Receivables from customers for each customer.

+ Short-term advance payment to seller (Code 1 32)

This indicator reflects the amount paid in advance to the seller for 12 months or less or in a normal business cycle to purchase goods and services but not yet received at the end of the accounting period . The data to be recorded in this indicator is based on the total detailed debit balance of Account 331 – Payable to sellers according to each seller.

+ Short-term internal receivables (Code 1 33)

indicator reflects the receivables between the enterprise and its affiliated units and between affiliated units with each other in payment relationships . outside the capital transfer relationship with a recovery period of 12 months or less or within a normal business cycle from the end of the accounting period . The data to be recorded in this indicator is the detailed debit balance of Accounts 1362 – Internal receivables for exchange rate differences, Account 1363 – Internal receivables for borrowing costs eligible for capitalization, Account 1368 – Other internal receivables at the end of the accounting period. When the enterprise prepares a consolidated financial situation report with its affiliated units, this indicator is offset with the “Short-term internal payables” indicator on the financial situation report of the affiliated units.

+ Receivable according to construction contract progress (Code 1 34)

This indicator reflects the difference between the total cumulative recorded revenue corresponding to the completed work portion greater than the total cumulative amount customers must pay according to the construction contract progress by the end of the reporting period of unfinished construction contracts . The data to be recorded in this indicator is based on the detailed debit balance of Account 337 – Payment according to construction contract progress.

+ Other short-term receivables (Code 1 35)

This indicator reflects other receivables with a remaining collection period of 12 months or less or within a normal business cycle from the end of the accounting period, such as: Receivables from BCC contracts that the enterprise jointly controls; receivables from short-term payments; interest, dividends, profits distributed in cash or non-cash assets; short-term advances, deposits, and pledges; temporary loans;… The data to be recorded in this indicator is the detailed debit balance of Accounts 1388 – Other receivables, Account 334 – Payables to employees, Account 338 – Other payables, Account 141 – Advances, Account 244 – Deposits, pledges at the end of the accounting period.

doubtful receivables (Code 1 36)

indicator reflects the provision for short-term bad debts at the end of the accounting period . The data to be recorded in this indicator is the detailed credit balance of Account 2293 – Provision for bad debts at the end of the accounting period . The balance at the end of the accounting period (details of the provision for doubtful short-term receivables) is recorded as a negative number in the form of parentheses ( …).

+ Assets in short supply awaiting resolution (Code 137)

This indicator reflects the value of assets missing for unknown reasons awaiting resolution at the end of the accounting period . The data to be recorded in this indicator is the debit balance of Account 1381 – Assets missing pending resolution at the end of the accounting period.

When preparing the Financial Statement, if the enterprise does not have solid evidence that the missing assets awaiting resolution are recoverable, the enterprise must record the value of those missing assets in expenses to determine the business results of the period. At the same time , the enterprise must explain in the Financial Statement the value of the missing assets awaiting resolution that has been recorded in the business results of the period, the time limit in which the enterprise expects to clearly identify the cause of each type of missing assets awaiting resolution on the Financial Statement of this period, the results of handling the missing assets awaiting resolution that have been reflected in the Financial Statement of the previous period,…

– Inventory (Code 140)

Is a synthetic indicator reflecting the total existing value of all types of inventories reserved for the production and business process of the enterprise (after deducting provisions for inventory price reduction ) at the end of the accounting period.

Code 140 = Code 141 + Code 142.

+ Inventory (Code 141)

This indicator reflects the total value of inventories owned by the enterprise and not yet determined to have been sold during the period, with a circulation period of 12 months or less or within a normal business cycle from the end of the accounting period. This indicator does not include the value of long-term unfinished production and business costs and the value of long-term equipment, supplies, and spare parts. The data to be recorded in this indicator is the detailed debit balance of Accounts 151 – Goods in transit, Account 152 – Raw materials, materials, Account 153 – Tools, instruments, Account 154 – Production and business costs in progress , Account 155 – Products, Account 156 – Goods, Account 157 – Goods sent Sold, Account 158 – Raw materials and supplies in bonded warehouse at the end of the accounting period.

costs with a recovery period of more than 12 months or more than one normal business cycle from the end of the accounting period that do not satisfy the definition of inventory according to Vietnamese Accounting Standards are not presented in this indicator but are presented in the indicator “Long-term unfinished production and business costs” (Code 251).

Equipment, supplies, and spare parts with a recovery period of more than 12 months or more than one normal business cycle from the end of the accounting period that do not satisfy the definition of inventory according to Vietnamese Accounting Standards are not presented in this indicator but are presented in the indicator “Long-term equipment, supplies, and spare parts” (Code 273).

+ Provision for inventory price reduction (Code 1 42 )

This indicator reflects the provision for devaluation of inventories at the end of the accounting period after deducting the provision for devaluation established for long-term unfinished production and business expenses and long-term equipment, materials and spare parts. The data to be recorded in this indicator is the detailed credit balance of Account 2294 – Provision for devaluation of inventories at the end of the accounting period (detailed provision for items presented as inventories in indicator Code 141) and is recorded in negative numbers in the form of parentheses (…).

This indicator does not include the provision for price reduction of long-term unfinished production and business costs and long-term replacement equipment, materials and spare parts.

– Short-term biological assets (Code 150)

Is a synthetic indicator reflecting the current value of biological assets (including livestock raised for one-time production and seasonal or one-time production crops) with an expected harvest time of 12 months or less or within a normal business cycle from the end of the accounting period (after deducting the provision for short-term biological asset losses) at the end of the accounting period.

Code 150 = Code 151 + Code 152 + Code 153.

+ Livestock for short-term one-time product collection ( Code 15 1 )

This indicator reflects the total value of livestock raised for one-time product collection, with an expected harvest time of 12 months or less or within a normal business cycle from the end of the accounting period . The data to be recorded in this indicator is the detailed debit balance of Account 2152 – Livestock raised for one-time product collection at the end of the accounting period.

+ Seasonal crops or short-term one-time products (Code 152)

This indicator reflects the total value of seasonal crops or one-time product harvests with an expected harvest time of 12 months or less or within a normal business cycle from the end of the accounting period . The data to be recorded in this indicator is the detailed debit balance of Account 2153 – Seasonal crops or one-time product harvests at the end of the accounting period.

– Short-term biological asset loss provision (Code 153)

This indicator reflects the provision for depreciation set up for short-term biological assets at the end of the accounting period . The data to be recorded in this indicator is the detailed credit balance of Account 2295 – Provision for loss of biological assets at the end of the accounting period. The detailed provision for biological assets is presented in the indicator Code 151, 152 and is recorded in negative numbers in the form of parentheses (…).

– Other short-term assets (Code 160)

Is a synthetic indicator reflecting the total value of other short-term assets with a recovery or usage period of 12 months or less from the end of the accounting period, such as short-term pending allocation costs, deductible VAT, taxes and other amounts receivable from the State, repurchase transactions of government bonds and other short-term assets at the end of the accounting period.

Code 160 = Code 161 + Code 162 + Code 163 + Code 164 + Code 165.

+ Short-term pending allocation costs (Code 161)

This indicator reflects the value of the expense awaiting allocation with an allocation period of 12 months or less or within a normal business cycle from the time the expense awaiting allocation arises. The data to be recorded in the expense ” Short-term expense awaiting allocation” is the detailed debit balance of Account 242 – Expense awaiting allocation at the end of the accounting period.

+ Deductible value added tax ( Code 1 62)

This indicator reflects the amount of VAT that can be deducted or refunded at the end of the accounting period . The data to be recorded in the indicator “Deductible VAT” is based on the debit balance of Account 133 – Deductible VAT at the end of the accounting period.

+ Taxes and other amounts receivable from the state (Code 1 63)

This indicator reflects taxes and other amounts paid in excess to the State at the end of the accounting period . The data to be recorded in this indicator is based on the detailed debit balance of Account 1383 – Special Consumption Tax of imported goods, Account 333 – Taxes and amounts payable to the State at the end of the accounting period.

+ Government bond repurchase transaction (Code 164)

This indicator reflects the value of the buyer’s government bonds before the end of the repurchase contract term at the end of the accounting period . The data to be recorded in the indicator “Government bond repurchase transactions” is the debit balance of Account 171 – Government bond repurchase transactions at the end of the accounting period.

+ Other short-term assets (Code 1 65)

This indicator reflects the value of other short-term assets, such as: Precious metals, precious stones (not classified as inventories), investments held for price increase to sell for profit not classified as investment real estate, such as paintings, photos, other valuable items at the end of the accounting period . The data to be recorded in this indicator is the detailed debit balance of account 2288 – Other investments and cash and cash equivalents that the enterprise is restricted from using in the short term at the end of the accounting period.

1. b) Long-term assets (Code 200)

This indicator reflects the value of assets not reflected in the current assets indicator. Long-term assets are assets with a recovery or use period of more than 12 months or more than a normal business cycle from the end of the accounting period, such as: Long-term receivables, fixed assets, long-term biological assets, investment real estate, long-term financial investments, long-term unfinished assets and other long-term assets.

Code 200 = Code 210 + Code 220 + Code 230 + Code 240 + Code 250 + Code 260 + Code 270.

Long- term receivables (Code 210)

Is a synthetic indicator reflecting the total value of receivables with a collection period of more than 12 months or more than a normal business cycle from the end of the accounting period, such as: Long-term receivables from customers, long-term prepayments to sellers, working capital in affiliated units, long-term internal receivables, other long-term receivables (after deducting provisions for long-term doubtful receivables).

Code 210 = Code 211 + Code 212 + Code 213 + Code 214 + Code 215 + Code 216.

+ Long-term receivables from customers (Code 211 )

This indicator reflects the amount of money still receivable from customers with a collection period of more than 12 months or more than a normal business cycle from the end of the accounting period . The data to be recorded in this indicator is based on the detailed debit balance of Account 131 – Customer receivables, opened in detail for each customer.

+ Long-term advance payment to seller ( Code 212)

This indicator reflects the amount paid in advance to the seller for more than 12 months or more than a normal business cycle to purchase goods and services but not yet received at the end of the accounting period . The data to be recorded in this indicator is based on the total detailed debit balance of Account 331 – Payable to sellers according to each seller.

+ Business capital at affiliated units (Code 213)

This indicator is only recorded on the Financial Situation Report of the head office to reflect the business capital assigned to the affiliated units. When preparing the consolidated Financial Situation Report of the entire enterprise, this indicator is offset with the indicator “Internal payables for business capital” (Code 335) or the indicator “Owner’s capital contribution” (Code 411) on the Financial Situation Report of the affiliated units, detailing the capital received from the superior unit . The data to be recorded in this indicator is based on the Debit balance of Account 1361 – Business capital in affiliated units at the end of the accounting period.

+ Long-term internal receivables (Code 2 1 4)

This indicator reflects the receivables between the head office and affiliated units and between affiliated units with each other in payment relationships other than capital transfer relationships, with a remaining collection period of more than 12 months or more than a normal business cycle from the end of the accounting period . The data to be recorded in this indicator is based on the detailed debit balance of Accounts 1362 – Internal receivables for exchange rate differences, Account 1363 – Internal receivables for borrowing costs eligible for capitalization, Account 1368 – Other internal receivables at the end of the accounting period. When the enterprise prepares the consolidated financial situation report of the enterprise, this indicator is offset with the “Long-term internal payables” indicator on the financial situation report of the affiliated units.

+ Other long-term receivables (Code 2 1 5)

This indicator reflects other receivables with a remaining collection period of more than 12 months or more than a normal business cycle from the end of the accounting period, such as: Receivables from jointly controlled BCC contracts; Receivables from payments on behalf of, interest, dividends distributed in cash or non-cash assets; Advances, deposits, escrows, loans, etc. Data to be recorded in this indicator is based on the detailed debit balance of the accounts: Account 1388 – Other receivables, Account 334 – Payables to employees, Account 338 – Other payables, Account 141 – Advances, Account 244 – Deposits, escrows at the end of the accounting period.

+ Provision for long-term doubtful debts (Code 216)

This indicator reflects the provision for doubtful long-term receivables at the end of the accounting period. The data to be recorded in this indicator is the detailed credit balance of Account 2293 – Provision for doubtful debts (details of provision for doubtful long-term receivables) at the end of the accounting period and is recorded in negative numbers in parentheses (…).

– Fixed assets (Code 220)

Is a synthetic indicator reflecting the total remaining value (Original price minus accumulated depreciation) of fixed assets at the end of the accounting period.

Code 220 = Code 221 + Code 224 + Code 227.

– Tangible fixed assets (Code 221)

Is a synthetic indicator reflecting the total remaining value of all tangible fixed assets at the end of the accounting period.

Code 221 = Code 222 + Code 223.

+ Original price (Code 222)

This indicator reflects the total original price of all types of tangible fixed assets at the end of the accounting period. The data to be recorded in this indicator is the Debit balance of Account 211 – Tangible fixed assets at the end of the accounting period.

+ Accumulated depreciation value (Code 223)

This indicator reflects the total accumulated depreciation value of tangible fixed assets at the end of the accounting period. The data to be recorded in this indicator is the credit balance of Account 2141 – Depreciation of tangible fixed assets at the end of the accounting period and is recorded in negative numbers in parentheses (…).

– Financial leased fixed assets (Code 224)

Is a synthetic indicator reflecting the total remaining value of all types of financial leased fixed assets at the end of the accounting period.

Code 224 = Code 225 + Code 226.

+ Original price (Code 225)

This indicator reflects the total original price of all types of financial leased fixed assets at the end of the accounting period. The data to be recorded in this indicator is the debit balance of Account 212 – Financial leased fixed assets at the end of the accounting period.

+ Accumulated depreciation value (Code 226)

This indicator reflects the total accumulated depreciation value of financial lease fixed assets at the end of the accounting period. The data to be recorded in this indicator is the credit balance of Account 2142 – Depreciation of financial lease fixed assets at the end of the accounting period and is recorded in negative numbers in the form of parentheses (…).

– Intangible fixed assets (Code 227)

Is a synthetic indicator reflecting the total remaining value of all types of intangible fixed assets at the end of the accounting period.

Code 227 = Code 228 + Code 229.

+ Original price (Code 228)

This indicator reflects the total original price of all types of intangible fixed assets at the end of the accounting period. The data to be recorded in this indicator is the Debit balance of Account 213 – Intangible fixed assets at the end of the accounting period.

+ Accumulated depreciation value (Code 229)

This indicator reflects the total accumulated depreciation value of intangible fixed assets at the end of the accounting period. The data to be recorded in this indicator is the credit balance of Account 2143 – Depreciation of intangible fixed assets at the end of the accounting period and is recorded in negative numbers in parentheses (…).

– Long-term biological assets (Code 230)

This indicator reflects the total original cost of long-term biological assets (including livestock for periodic products, livestock for one-time products, seasonal crops or long-term one-time products) with an expected recovery period of more than 12 months or more than a normal business cycle from the end of the accounting period. The data to be recorded in this indicator is the detailed debit balance of Account 215 – Biological assets at the end of the accounting period.

Code 230 = Code 231 + Code 236 + Code 237 + Code 238.

+ Livestock for long-term periodic products (Code 231)

This indicator reflects the value of livestock for periodic products of enterprises with an expected recovery period of more than 12 months or more than a normal business cycle from the end of the accounting period. The data to be recorded in this indicator is the Debit balance of Account 2151 – Livestock for long-term periodic products at the end of the accounting period.

Code 231 = Code 232 + Code 233

+ Livestock for periodic production not yet reaching maturity (Code 232)

This indicator reflects the costs of purchasing and caring for livestock for periodic products from the time of origin until maturity. The data to be recorded in this indicator is the Debit balance of Account 21511 – Livestock for periodic products that have not yet reached maturity at the end of the accounting period.

+ Livestock for periodic production reaching maturity (Code 233)

This indicator reflects the remaining value of livestock for periodic products reaching maturity at the end of the accounting period.

Code 233 = Code 234 + Code 235

Original price (Code 234)

This indicator reflects the original cost of biological assets that are livestock for periodic products reaching maturity at the end of the accounting period. The data to be recorded in this indicator is the Debit balance of Account 215121 – Original cost at the end of the accounting period.

Accumulated depreciation value (Code 235)

This indicator reflects the accumulated depreciation value of all livestock for periodic products reaching the mature stage at the end of the accounting period. The data to be recorded in this indicator is the Credit balance of Account 215122 – Accumulated depreciation value at the end of the accounting period and is recorded in negative numbers in the form of parentheses (…).

+ Livestock for long-term one-time product collection (Code 236)

This indicator reflects the total value of livestock raised for one-time product collection with an expected harvest time of more than 12 months or more than a normal business cycle from the end of the accounting period. The data to be recorded in this indicator is the detailed debit balance of Account 2152 – Livestock raised for one-time product collection at the end of the accounting period.

+ Seasonal crops or long-term one-time products (Code 237)

This indicator reflects the total value of seasonal crops or one-time product harvests with an expected harvest time of more than 12 months or more than a normal business cycle from the end of the accounting period. The data to be recorded in this indicator is the detailed debit balance of Account 2153 – Seasonal crops or one-time product harvests at the end of the accounting period.

+ Provision for long-term loss of biological assets (Code 238)

This indicator reflects the loss provision for biological assets with an expected harvest time of more than 12 months or more than a normal business cycle from the end of the accounting period. The data to be recorded in this indicator is the detailed credit balance of Account 2295 – Loss provision for biological assets at the end of the accounting period (details of the provision for biological assets are presented in indicators Codes 231, 236, 237) and is recorded in negative numbers in the form of parentheses (…).

– Investment real estate (Code 240)

Is a synthetic indicator reflecting the total remaining value of all types of investment real estate at the end of the accounting period.

Code 240 = Code 241 + Code 242.

+ Original price (Code 241)

This indicator reflects the total original cost of all types of investment real estate at the end of the accounting period after deducting the loss due to the decline in value of investment real estate held for price increase. The data to reflect in this indicator is the detailed debit balance of Account 217 – Investment real estate at the end of the accounting period.

+ Accumulated depreciation value (Code 242)

This indicator reflects the total accumulated depreciation value of investment real estate used for lease at the end of the accounting period. The data to be recorded in this indicator is the credit balance of Account 2147 – Depreciation of investment real estate at the end of the accounting period and is recorded in negative numbers in the form of parentheses (…).

– Long-term unfinished assets (Code 250)

Is a synthetic indicator reflecting the value of long-term unfinished production and business costs and long-term unfinished construction costs at the end of the accounting period.

Code 250 = Code 251 + Code 252.

+ Long-term unfinished production and business costs (Code 251)

Long-term unfinished production and business costs are costs intended to produce inventories with a normal production time of more than 12 months or more than a normal business cycle, or the production of inventories is delayed, interrupted, behind schedule, temporarily suspended,… causing the production time to exceed 12 months from the end of the accounting period.

This indicator reflects the net realizable value (the original price minus the provision for devaluation set aside for this item) of unfinished production and business costs with an expected recovery period exceeding 12 months or more than a normal business cycle from the end of the accounting period, which do not satisfy the definition of inventory according to Vietnamese Accounting Standards. The data to be recorded in this indicator is based on the detailed debit balance of Account 154 – Unfinished production and business costs after deducting the detailed credit balance of Account 2294 – Provision for devaluation of inventories (provision for devaluation of long-term unfinished production and business costs) at the end of the accounting period.

+ Cost of unfinished basic construction (Code 252)

This indicator reflects the total value of fixed assets being purchased, capital construction investment costs, repair costs, periodic maintenance, upgrading, and renovation of unfinished fixed assets at the end of the accounting period. The data to be recorded in this indicator is the debit balance of Account 241 – Unfinished capital construction at the end of the accounting period.

– Long-term financial investment (Code 260)

Is a synthetic indicator reflecting the total value of financial investments such as investments in subsidiaries, investments in associated companies, joint ventures, capital contributions to other entities, investments held to maturity with remaining terms of more than 12 months or more than a normal business cycle after deducting the provision for loss on investments in other entities and the provision for long-term investments held to maturity at the end of the accounting period.

Code 260 = Code 261 + Code 262 + Code 263 + Code 264 + Code 265 + Code 266.

+ Investment in subsidiaries (Code 261)

This indicator reflects the value of investments in subsidiaries at the end of the accounting period. The data to be recorded in this indicator is the Debit balance of Account 221 – Investment in subsidiaries at the end of the accounting period.

+ Investment in joint ventures and associates (Code 262)

This indicator reflects the value of investment in joint ventures and associates at the end of the accounting period. The data to be recorded in this indicator is the total debit balance of Account 222 – Investment in joint ventures and associates at the end of the accounting period.

+ Capital investment in other units (Code 263)

This indicator reflects investments in equity of other entities but the enterprise does not have control, joint control, significant influence (except for trading securities, investments in subsidiaries, joint ventures, associates) and investments in BCC contracts that the enterprise does not have joint control but enjoys benefits depending on the after-tax profit of the contract and has a remaining term of more than 12 months or more than a normal business cycle at the end of the accounting period. The data to be presented in this indicator is the detailed debit balance of Account 2281 – Capital contributions to other entities at the end of the accounting period.

+ Provision for long-term investment losses in other entities (Code 264)

This indicator reflects the provision for investment losses in subsidiaries, joint ventures, associates, and capital contributions to other units (except for provisions for investments in BCC contracts at Code 126) due to the invested unit suffering losses or the investor’s ability to lose capital at the end of the accounting period. The data to be recorded in this indicator is the detailed credit balance of Account 2292 – Provision for investment losses in other units at the end of the accounting period and is recorded in negative numbers in parentheses (…).

+ Long-term held-to-maturity investments (Code 265)

This indicator reflects the value of investments held to maturity with a remaining term of more than 12 months or more than a normal business cycle from the end of the accounting period, such as term deposits, bonds, commercial papers, loans and other types of debt securities. The data to be recorded in this indicator is the detailed debit balance of Accounts 1281 – Term deposits, Account 1282 – Bonds, Account 1283 – Loans, Account 1288 – Other investments held to maturity.

+ Long-term investment held to maturity provision (Code 266):

This indicator reflects the provision for long-term investments held to maturity at the end of the accounting period. The data to be recorded in this indicator is the detailed credit balance of Account 2292 – Provision for loss on investments in other entities (provision for long-term investments held to maturity) at the end of the accounting period and is recorded in negative numbers in parentheses (…).

– Other long-term assets (Code 270)

Is a synthetic indicator reflecting the total value of other long-term assets with an expected recovery or use period of more than 12 months or more than a normal business cycle from the end of the accounting period, such as: Long-term expenses awaiting allocation, deferred income tax assets, equipment, supplies, long-term replacement parts and long-term assets not presented in other indicators.

Code 270 = Code 271 + Code 272 + Code 273 + Code 274.

+ Long-term allocated transportation costs (Code 271)

This indicator reflects the value of the incurred expense with an expected allocation period of more than 12 months or more than a normal business cycle from the time the expense is incurred pending allocation. The data to be recorded in the indicator “Long-term expense awaiting allocation” is the detailed debit balance of Account 242 – Expense awaiting allocation at the end of the accounting period. The enterprise does not reclassify long-term expense awaiting allocation into short-term expense awaiting allocation.

+ Deferred income tax assets (Code 272)

This indicator reflects the value of deferred income tax assets at the end of the accounting period. The data to be recorded in this indicator is based on the debit balance of Account 243 – Deferred income tax assets at the end of the accounting period.

If the taxable temporary differences and the deductible temporary differences relate to the same taxpayer and are settled with the same tax authority, the deferred tax liability is offset against the deferred tax asset. In this case, the “Deferred income tax asset” indicator reflects the difference between the deferred income tax asset and the deferred income tax liability.

+ Long-term replacement equipment, materials and spare parts (Code 273)

This indicator reflects the net value (after deducting the provision for price reduction) of equipment, materials, and spare parts with a storage period of more than 12 months or more than a normal business cycle from the end of the accounting period for storage, replacement, and prevention of damage to fixed assets. The data to be recorded in this indicator is based on the detailed debit balance of Account 153 – Tools and equipment (details of long-term reserved spare parts and equipment) after deducting the detailed credit balance of Account 2294 – Inventory price reduction provision (long-term equipment, materials, and spare parts) at the end of the accounting period.

+ Other long-term assets (Code 274)

This indicator reflects the value of other long-term assets other than the long-term assets mentioned above, such as valuable items for display, introducing traditions, history, etc., but not classified as fixed assets and not intended to be sold within 12 months or in a normal business cycle from the end of the accounting period. The data to be recorded in this indicator is based on the balance of detailed debit account 2288 – Other investments and cash and cash equivalents that the enterprise is restricted from using in the long term at the end of the accounting period.

1. c) Total assets (Code 280)

Is a synthetic indicator reflecting the total value of the enterprise’s existing assets at the end of the accounting period, including short-term assets and long-term assets.

Code 280 = Code 100 + Code 200.

1. d) Liabilities (Code 300)

Is a synthetic indicator reflecting the total amount of debt payable by the enterprise at the end of the accounting period, including: Short-term debt and long-term debt.

Code 300 = Code 310 + Code 330.

1. d) Short-term debt (Code 310)

Is a synthetic indicator reflecting the total value of debts payable with a remaining payment term of no more than 12 months or within a normal business cycle from the end of the accounting period, such as: Short-term payables to sellers; short-term advance payments from buyers; dividends and profits payable; short-term taxes and other payables to the State; payables to employees; short-term payable expenses; short-term internal payables; short-term construction contract progress payables; short-term revenue awaiting allocation; other short-term payables; short-term financial leasing loans and debts; short-term payable provisions; reward and welfare funds; price stabilization funds; government bond repurchase transactions.

Code 310 = Code 311 + Code 312 + Code 313 + Code 314 + Code 315 + Code 316 +
Code 317 + Code 318 + Code 319 + Code 320 + Code 321 + Code 322 + Code 323 + Code 324 + Code 325.

+ Short-term payables to suppliers (Code 311)

This indicator reflects the value of the debt payable to sellers with a remaining payment term of 12 months or less or within a normal business cycle from the end of the accounting period. The data to be recorded in this indicator is based on the detailed credit balance of Account 331 – Payable to sellers opened in detail for each seller.

+ Short-term advance payment by buyer (Code 312)

This indicator reflects the amount of money that buyers advance to purchase products, goods, services, fixed assets, investment real estate and the enterprise is obliged to provide for 12 months or less or within a normal business cycle from the end of the accounting period (excluding pre-received revenues). The data to be recorded in this indicator is based on the detailed credit balance of Account 131 – Receivables from customers opened in detail for each customer.

+ Dividends and profits payable (Code 313)

This indicator reflects the value of dividends and profits payable to investors who are shareholders and capital contributors of the enterprise at the end of the accounting period. The data to be recorded in this indicator is the credit balance of Account 332 – Dividends and profits payable at the end of the accounting period.

+ Taxes and short-term payments to the State (Code 314)

This indicator reflects the total value of amounts that the enterprise must pay to the State within a period of no more than 12 months or in a normal business cycle from the end of the accounting period, including taxes, fees, charges and other payable amounts. The data to be recorded in this indicator is based on the detailed Credit balance of Account 333 – Taxes and amounts payable to the State at the end of the accounting period.

+ Payable to employees (Code 315)

This indicator reflects the amounts that the enterprise still has to pay to employees at the end of the accounting period. The data to be recorded in this indicator is based on the detailed credit balance of Account 334 – Payable to employees at the end of the accounting period.

+ Short-term payable expenses (Code 316)

This indicator reflects the value of debts that are still payable due to expenses of the reporting period that do not have enough records and documents but have arisen and will have to be paid within a term of no more than 12 months or within a normal business cycle from the end of the accounting period such as advance payment of vacation salary, interest payable , etc. The data to be recorded in this indicator is based on the detailed Credit balance of Account 335 – Expenses payable at the end of the accounting period.

+ Short-term internal payables (Code 317)

This indicator reflects the internal payables with a remaining payment term of no more than 12 months or within a normal business cycle from the end of the accounting period (except for payables for business capital) between the head office and affiliated units or between affiliated units in the enterprise. The data to be recorded in this indicator is based on the detailed credit balance of Accounts 3362 – Internal payables for exchange rate differences, Account 3363 – Internal payables for borrowing costs eligible for capitalization, Account 3368 – Other internal payables at the end of the accounting period. When preparing the consolidated financial situation report of the enterprise, this indicator is offset with the indicator “Short-term internal receivables” on the financial situation report of affiliated units.

+ Payable according to construction contract progress (Code 318)

This indicator reflects the difference between the total cumulative amount that customers must pay according to the construction contract progress greater than the total cumulative recorded revenue corresponding to the completed work by the end of the reporting period of unfinished construction contracts. The data to be recorded in this indicator is based on the detailed credit balance of Account 337 – Payment according to construction contract progress at the end of the accounting period.

+ Short-term revenue awaiting allocation (Code 319)

This indicator reflects the revenue awaiting allocation with an expected allocation period of no more than 12 months or within a normal business cycle from the end of the accounting period. The data to be recorded in this indicator is the detailed credit balance of Account 3387 – Revenue awaiting allocation at the end of the accounting period.

+ Other short-term payables (Code 320)

This indicator reflects other payables with a remaining payment term of no more than 12 months or within a normal business cycle from the end of the accounting period, in addition to payables reflected in other indicators, such as: Value of assets discovered to be in surplus for unknown reasons, amounts payable to social insurance agencies, trade union funds, short-term deposits, etc. Data to be recorded in this indicator is based on the detailed credit balance of the accounts: Account 338 – Other payables, Account 138 – Other receivables, Account 344 – Deposits received at the end of the accounting period.

+ Short-term loans and financial leases (Code 321)

This indicator reflects the total value of loans and debts that the enterprise owes to banks, organizations, financial companies and other entities with a remaining payment term of no more than 12 months or within a normal business cycle from the end of the accounting period. The data to be recorded in this indicator is based on the detailed credit balance of Account 341 – Loans and financial lease debts and Account 343 – Bonds issued at the end of the accounting period.

+ Short-term payables provision (Code 322)

This indicator reflects the expected payable provisions that will arise within 12 months or within a normal business cycle from the end of the accounting period, such as product warranty provisions, goods, construction works, business restructuring provisions, etc. The payable provisions are often estimated, with uncertain payment time, payable value, and the enterprise has not yet received goods or services from the supplier. The data to be recorded in this indicator is based on the detailed credit balance of Account 352 – Payable provisions at the end of the accounting period.

+ Bonus and welfare fund (Code 323)

This indicator reflects the unused Bonus and Welfare Fund and Executive Board Bonus Fund at the end of the accounting period. The data to be recorded in this indicator is the Credit balance of Account 353 – Bonus and Welfare Fund at the end of the accounting period.

+ Price stabilization fund (Code 324)

This indicator reflects the value of the existing Price Stabilization Fund at the end of the accounting period. The data to be recorded in this indicator is the Credit balance of Account 357 – Price Stabilization Fund at the end of the accounting period.

+ Government bond repurchase transaction (Code 325)

This indicator reflects the value of the selling party’s government bonds before the end of the repurchase contract term at the end of the accounting period. The data to be recorded in this indicator is the credit balance of Account 171 – Government bond repurchase transactions at the end of the accounting period.

1. e) Long-term debt (Code 330)

Is a synthetic indicator reflecting the total value of the enterprise’s long-term debts, including debts with a remaining payment term of more than 12 months or more than a normal business cycle from the end of the accounting period, including: Long-term payables to sellers; long-term prepayments from buyers; long-term taxes and payables to the State; long-term payable expenses; internal payables for business capital; long-term internal payables; long-term pending allocation revenue; other long-term payables; long-term loans and financial leasing debts; convertible bonds; preferred shares; deferred income tax payable; long-term payable provisions; science and technology development fund.

Code 330 = Code 331 + Code 332 + Code 333 + Code 334 + Code 335 +
Code 336 + Code 337 + Code 338 + Code 339 + Code 340 + Code 341 + Code 342 + Code 343 + Code 344.

+ Long-term payables to suppliers (Code 33 1)

This indicator reflects the value of payables to sellers with a remaining payment term of more than 12 months or more than a normal business cycle from the end of the accounting period. The data to be recorded in this indicator is based on the detailed credit balance of Account 331 – Payables to sellers, opened in detail for each seller.

+ Long-term prepayment by buyer (Code 332)

This indicator reflects the amount of money that buyers advance to purchase products, goods, services, fixed assets, investment real estate and that the enterprise is obliged to provide for more than 12 months or more than a normal production and business cycle at the time of reporting (excluding pre-received revenues). The data to be recorded in this indicator is based on the detailed credit balance of Account 131 – Receivables from customers with details for each customer.

+ Taxes and long-term payments to the State (Code 333)

This indicator reflects the value of the long-term payables of enterprises to the State at the end of the accounting period, such as additional corporate income tax expenses according to the regulations on global minimum tax. The data to be recorded in this indicator is based on the detailed credit balance of Account 333 – Taxes and payables to the State at the end of the accounting period.

+ Long-term payable expenses (Code 334)

This indicator reflects the value of debts that are still payable due to expenses of the reporting period that do not have enough records and documents but have arisen and will have to be paid after 12 months or more than a normal business cycle from the end of the accounting period such as interest payable,… The data to be recorded in this indicator is based on the detailed credit balance of Account 335 – Expenses payable at the end of the accounting period.

+ Internal payables for working capital (Code 335)

Depending on the operational characteristics and management model of each unit, the enterprise shall decentralize and regulate the affiliated units to record the capital provided by the enterprise in this indicator or the indicator “Owner’s capital contribution” (Code 411).

This indicator is only reflected on the Financial Statement of the affiliated unit to reflect the amounts the affiliated unit must pay to the enterprise for business capital.

The data to be recorded in this indicator is based on the details of the Credit balance of Account 3361 – Internal payables for business capital at the end of the accounting period. When preparing the consolidated financial situation report of the whole enterprise, this indicator is offset by the superior unit with the indicator “Business capital in affiliated units” on the financial situation report of the superior unit.

+ Long-term internal payables (Code 336)

This indicator reflects the internal payables with a remaining payment term of more than 12 months or more than a normal business cycle from the end of the accounting period (except for payables for business capital) between the head office and affiliated units or between affiliated units in the enterprise. The data to be recorded in this indicator is based on the detailed credit balance of Accounts 3362 – Internal payables for exchange rate differences, Account 3363 – Internal payables for borrowing costs eligible for capitalization, Account 3368 – Other internal payables at the end of the accounting period. If there are affiliated units, the enterprise’s Financial Statement must summarize both the data of the head office and affiliated units. In that case, this indicator is offset with the “Long-term internal receivables” indicator on the Financial Status Report of affiliated units.

+ Long-term revenue awaiting allocation (Code 337)

This indicator reflects the revenue awaiting allocation with an expected allocation period of more than 12 months or more than a normal business cycle from the end of the accounting period. The data to be recorded in this indicator is the detailed credit balance of Account 3387 – Revenue awaiting allocation at the end of the accounting period.

+ Other long-term payables (Code 338)

This indicator reflects other payables with a remaining payment term of more than 12 months or more than a normal business cycle from the end of the accounting period, in addition to payables reflected in other indicators, such as long-term deposits, long-term loans, etc. Data to be recorded in this indicator is based on the detailed credit balance of Accounts 338 – Other payables, Account 344 – Deposits received at the end of the accounting period.

+ Long-term loans and financial leases (Code 339)

This indicator reflects the amount of loans and debts of enterprises to banks, organizations, financial companies and other entities, with a remaining payment term of more than 12 months or more than a normal business cycle from the end of the accounting period, such as: Bank loans, payables for financial leased fixed assets, proceeds from issuing regular bonds, etc. The data to be recorded in this indicator is the credit balance of Accounts 341 – Financial lease loans and debts and Account 3431 – Regular bonds at the end of the accounting period.

+ Convertible bonds (Code 340)

This indicator reflects the value of the principal debt of convertible bonds issued by the enterprise at the end of the accounting period. The data to be recorded in this indicator is the detailed credit balance of Account 3432 – Convertible bonds at the end of the accounting period.

+ Preferred shares (Code 341)

This indicator reflects the value of preferred shares classified as liabilities at the end of the accounting period. The data to be recorded in this indicator is based on the detailed credit balance of account 41112 – preferred shares at the end of the accounting period.

+ Deferred income tax payable (Code 342)

This indicator reflects the amount of deferred corporate income tax payable at the end of the accounting period. The data to be recorded in this indicator is the credit balance of Account 347 – Deferred income tax payable at the end of the accounting period.

If the taxable temporary differences and the deductible temporary differences relate to the same taxpayer and are settled with the same tax authority, the deferred income tax liability is offset against the deferred tax asset. In this case, the item “Deferred income tax liability ” reflects the difference between the deferred income tax liability being greater than the deferred tax asset at the end of the accounting period.

+ Long-term payable provisions (Code 343)

This indicator reflects the provision for amounts expected to be paid over 12 months or more than a normal business cycle from the end of the accounting period, such as product warranty provisions, goods, construction works, restructuring provisions, environmental restoration provisions, etc. Data to be recorded in this indicator is based on the detailed credit balance of Account 352 – Provisions payable at the end of the accounting period.

+ Science and technology development fund (Code 344)

This indicator reflects the amount of unused Science and Technology Development Fund at the time of reporting. The data to be recorded in this indicator is the Credit balance of Account 356 – Science and Technology Development Fund.

1. g) Equity

Code 400 = Code 411 + Code 412 + Code 413 + Code 414 + Code 415 +
Code 416 + Code 417 + Code 418 + Code 419 + Code 420

– Owner’s equity (Code 411)

This indicator reflects the total capital actually contributed by owners to the enterprise (for joint stock companies, it reflects the capital contributed by shareholders according to the par value of shares; for other types of enterprises, this indicator reflects the actual capital contributed by owners according to the Company Charter) at the end of the accounting period. At affiliated units, this indicator can reflect the capital granted if the enterprise stipulates that the affiliated accounting unit records it in Account 411 – Owner’s investment capital. The data to be recorded in this indicator is the Credit balance of Account 4111 – Owner’s capital contribution. For joint stock companies, Code 411 = Code 411a + Code 411b. For other types of enterprises, enterprises only present the owner’s capital contribution in indicator 411 without having to present it in detail according to 02 indicators 411a and 411b.

+ Common shares with voting rights (Code 411a)

This indicator is only used in joint stock companies, reflecting the par value of common shares with voting rights at the end of the accounting period. The data to be recorded in this indicator is the Credit balance of Account 41111 – Common shares with voting rights.

+ Preferred shares (Code 411b)

This indicator reflects the par value of preferred shares classified as equity at the end of the accounting period. The data to be recorded in this indicator is based on the detailed credit balance of Account 41112 – Preferred shares at the end of the accounting period.

– Capital surplus (Code 412)

This indicator reflects the capital surplus at the end of the accounting period. The data to be recorded in this indicator is the Credit balance of Account 4112 – Capital surplus at the end of the accounting period. If Account 4112 has a Debit balance, this indicator is recorded as a negative number in the form of parentheses (…).

– Bond conversion option (Code 413)

This indicator reflects the value of the capital component of convertible bonds issued by the enterprise at the end of the accounting period. The data to be recorded in this indicator is the detailed credit balance of Account 4113 – Bond conversion option at the end of the accounting period.

– Other owners’ equity (Code 414)

This indicator reflects the value of other owners’ capital at the end of the accounting period. The data to be recorded in this indicator is the credit balance of Account 4118 – Other capital at the end of the accounting period.

– Own repurchased shares (Code 415)

This indicator reflects the value of treasury stocks and repurchased shares of the company at the end of the accounting period. The data to be recorded in this indicator is the Debit balance of Account 419 – Repurchased shares of the company at the end of the accounting period and is recorded in negative numbers in parentheses (…).

– Difference in asset revaluation (Code 416)

This indicator reflects the difference due to revaluation of existing assets at the end of the accounting period. The data to be recorded in this indicator is the Credit balance of Account 412 – Difference in revaluation of assets at the end of the accounting period. In case Account 412 – Difference in revaluation of assets has a Debit balance, this indicator is recorded in a negative number in the form of parentheses (…).

– Exchange rate difference (Code 417)

This indicator reflects the total exchange rate difference at the end of the accounting period.

The data to be recorded in this indicator is the Credit balance of Account 413 – Exchange rate difference at the end of the accounting period. In case Account 413 – Exchange rate difference has a Debit balance, this indicator is recorded in a negative number in the form of parentheses (…).

In case the unit uses foreign currency as the accounting currency, this indicator also reflects the exchange rate difference due to converting the Financial Statements prepared in foreign currency into Vietnamese Dong.

– Development investment fund (Code 418)

This indicator reflects the amount of unused Development Investment Fund at the end of the accounting period. The data to be recorded in this indicator is the Credit balance of Account 414 – Development Investment Fund at the end of the accounting period.

– Other equity funds (Code 419)

This indicator reflects the value of other funds belonging to the enterprise’s equity capital set aside from the remaining undistributed profit after tax at the end of the accounting period. The data to be recorded in this indicator is the credit balance of Account 418 – Other funds belonging to the equity capital at the end of the accounting period.

– Undistributed profit after tax (Code 420)

This indicator reflects the undistributed or unsettled post-tax profit (or loss) at the end of the accounting period. The data to be recorded in this indicator is the Credit balance of Account 421 – Undistributed post-tax profit at the end of the accounting period. In case Account 421 – Undistributed post-tax profit has a Debit balance, the data of this indicator is recorded in negative numbers in the form of parentheses (…).

Code 420 = Code 420a + Code 420b.

+ Accumulated undistributed profit after tax up to the end of the previous period (Code 420a)

This indicator reflects the accumulated undistributed or unresolved profit (or loss) up to the end of the previous period (beginning of the reporting period).

The data to be recorded in this indicator on the Quarterly Financial Situation Report is the Credit balance of Account 4211 – Undistributed profit after tax accumulated to the end of the previous year plus the detailed Credit balance of Account 4212 – Undistributed profit after tax this year, detailing the accumulated profit from the beginning of the year to the beginning of the reporting period. In case Account 4211 – Undistributed profit after tax accumulated to the end of the previous year, Account 4212 – Undistributed profit after tax this year has a Debit balance, the data of this indicator is recorded in negative numbers in the form of parentheses (…).

The data to be recorded in the indicator “Undistributed profit after tax up to the end of the previous period” on the annual Financial Status Report is the Credit balance of Account 4211 “Undistributed profit after tax accumulated up to the end of the previous year” at the end of the accounting period. In case Account 4211 – Undistributed profit after tax accumulated up to the end of the previous year, Account 4212 – Undistributed profit after tax this year has a Debit balance, the data of this indicator is recorded in negative numbers in the form of parentheses (…).

+ Undistributed profit after tax this period (Code 420b)

This indicator reflects the undistributed or unresolved profit (or loss) arising in the reporting period.

The data to be recorded in the indicator “Undistributed profit after tax this period” on the quarterly Financial Status Report is the Credit balance of Account 4212 – Undistributed profit after tax this year, detailing the profit generated in the reporting quarter. In case Account 4212 – Undistributed profit after tax this year has a Debit balance, the data of this indicator is recorded in negative numbers in the form of parentheses (…).

The data to be recorded in the indicator “Undistributed profit after tax this period” on the annual financial situation report is the credit balance of Account 4212 – Undistributed profit after tax this year. In case Account 4212 – Undistributed profit after tax this year has a debit balance, the data of this indicator is recorded in negative numbers in the form of parentheses (…).

1. h) Total capital sources (Code 440)

Reflects the total capital sources forming the enterprise’s assets at the reporting time.

Code 440 = Code 300 + Code 400.

Indicator “Total Assets Code 280”

=

Indicator “Total Capital” Code number 440”

2. Prepare and present the Financial Statement of the enterprise that does not meet the going concern assumption (Form No. B 01 – DNKLT)

2.1. The presentation of the indicators of the Financial Position Statement when the enterprise does not meet the going concern assumption is performed similarly to the Financial Position Statement of the enterprise when it is in operation, except for the following main points:

1. a) No distinction between short-term and long-term: Indicators are established without basing on the remaining period being 12 months or less or within a normal business cycle or more than 12 months or more than a normal business cycle from the end of the accounting period;
2. b) No provision indicators are presented because all assets and liabilities have been revalued at net realizable value, recoverable value or fair value.

2.2. Some indicators have different preparation methods from the Financial Statement of a going concern as follows:

1. a) Indicator “Trading securities” (Code 121)

This indicator reflects the book value of trading securities after revaluation. Enterprises do not have to present the indicator “Provision for devaluation of trading securities” because the amount of devaluation provision is directly recorded as a reduction in the book value of trading securities.

1. b) Indicator “Investments held to maturity” (Code 122)

This indicator reflects the book value of investments held to maturity after revaluation. Enterprises do not have to present the indicator “Provision for investments held to maturity” because the amount of provision for devaluation is directly recorded as a reduction in the book value of the investment.

1. c) Indicators related to investments in subsidiaries, joint ventures, associates, and other investments are reflected at book value after revaluing the above investments. Enterprises do not have to present the indicator “Provision for loss of investment in other long-term entities” because the provision is recorded directly as a reduction in the book value of the investments.
2. d) Indicators related to receivables are reflected at the book value after revaluation of receivables. Enterprises do not have to present the indicator “Provision for bad debts” because the provision is recorded directly as a reduction in the book value of receivables.
3. d) “Inventory” indicator Code 140

This indicator reflects the book value of inventories after revaluation. This indicator includes the costs of production, unfinished business and equipment, supplies, spare parts classified as long-term on the Financial Statement of the enterprise in continuous operation. Enterprises do not have to present the indicator “Provision for devaluation of inventories” because the amount of devaluation provision is directly recorded in the book value of inventories.

1. e) Indicators related to tangible fixed assets, intangible fixed assets, financial leased fixed assets, biological assets, and investment real estate are reflected at the book value after revaluation of the above assets. Enterprises do not have to present the “Original price” indicator because the book value is the revaluation price, and do not present the “Accumulated depreciation” indicator because the depreciation amount has been directly recorded in the book value of the assets.

2.3. Other indicators are presented by combining the content and data of the corresponding indicators in the long-term and short-term sections of the continuously operating enterprise.

1. Instructions for preparing and presenting Business Performance Report (Form No. B02-DN)
2. Content and structure of the report
3. a) The business performance report reflects the business situation and results of the enterprise, including results from the main business activities, financial activities and other activities of the enterprise.

When preparing the consolidated business performance report between the head office and affiliated units, the enterprise must exclude all revenue, income and expenses arising from internal transactions.

1. b) The business performance report includes 5 columns:

– Column 1: Reporting indicators;

– Column 2: Codes of corresponding indicators;

– Column 3: The numbers corresponding to the indicators of this report are shown on the Notes to the Financial Statements;

– Column 4: Total number of transactions in the annual reporting period;

– Column 5: Data from previous year (for comparison).

2. Basis for reporting

– Based on the previous year’s business performance report.

– Based on the general accounting books and detailed accounting books during the period used for accounts from type 5 to type 9.

3. Content and method of establishing indicators in the Business Performance Report

3.1. Sales and service revenue (Code 01):

– This indicator reflects total revenue from sales of goods and products (including semi-finished real estate products and real estate goods); revenue from sales of biological assets (except biological assets such as perennial plants for periodic products, working animals); revenue from providing services (including rental services for investment real estate and fixed assets) and other revenue in the enterprise’s reporting period. The data to be recorded in this indicator is the accumulated number of detailed occurrences on the credit side of Account 511 – Revenue from sales of goods and provision of services in the reporting period.

Sales revenue and service provision recorded in this indicator do not include revenue from liquidation and transfer of investment real estate (including investment real estate held for lease and investment real estate held for price increase for sale).

When an enterprise prepares a consolidated income statement with its subsidiaries, sales and service revenues arising from internal transactions must be excluded.

– This indicator does not include indirect taxes, such as VAT (including VAT paid by direct method), special consumption tax, export tax, environmental protection tax and other indirect taxes and fees arising from the sale of goods and provision of services.

3.2. Revenue deductions (Code 02):

This indicator reflects the total revenue deductions in the accounting period, including: Trade discounts, sales discounts, and sales returns in the reporting period. The data to be recorded in this indicator is the cumulative debit side of Account 511 – Sales revenue and service provision corresponding to the credit side of Account 521 – Revenue deductions, details of trade discounts, sales discounts, and sales returns in the reporting period.

This indicator does not include deductions from real estate sales revenue (if any); indirect taxes and fees that the enterprise is not entitled to and must pay to the State budget (recorded as a reduction in revenue in accounting book Account 511 – Sales revenue and service provision) because these amounts are essentially collections on behalf of the State, not included in the revenue structure and are not considered as revenue deductions.

3.3. Net revenue from sales and service provision (Code 10):

This indicator reflects the revenue from sales of products and goods (including semi-finished real estate products and real estate goods), revenue from providing services (including rental services for investment real estate and fixed assets) and other revenue after deducting estimated revenue reductions (trade discounts, sales discounts, sales returns) in the reporting period, serving as the basis for calculating the business performance of the enterprise.

Code 10 = Code 01 – Code 02.

3.4. Cost of goods sold (Code 11):

This indicator reflects the total cost of products and goods (including the cost of finished real estate products and real estate goods); cost of biological assets (except biological assets that are perennial plants for periodic products); direct costs of completed service volumes provided (including real estate and fixed asset rental services), other costs included in cost or recorded as a reduction in cost of goods sold in the reporting period. The data to be recorded in this indicator is the accumulated number of detailed occurrences on the Credit side of Account 632 – Cost of goods sold in the reporting period corresponding to the Debit side of Account 911 – Determining business results.

Cost of goods sold recorded in this indicator does not include the remaining value and costs directly related to liquidated and sold investment real estate (including investment real estate held for lease and investment real estate held waiting for price increase for sale).

When an enterprise prepares a consolidated income statement with its subsidiaries, all cost of goods sold arising from internal transactions must be eliminated.

3.5. Gross profit from sales and service provision (Code 20):

This indicator reflects the difference between net revenue from sales of products, goods, biological assets, provision of real estate and fixed asset rental services and cost of goods sold arising in the reporting period.

Code 20 = Code 10 – Code 11.

3.6. Profit/loss from sale and liquidation of investment real estate (Code 21):

This indicator reflects the difference between the revenue from selling and liquidating investment real estate (including investment real estate held for lease and investment real estate held for price increase to sell) and the remaining value and cost of selling and liquidating investment real estate in the period. In case the revenue from selling and liquidating investment real estate is higher than the selling cost and the remaining value of investment real estate, this indicator is presented as a positive number (+). In case the revenue from selling and liquidating investment real estate is lower than the selling cost and the remaining value of investment real estate, this indicator is presented as a negative number (-). Cost of selling and liquidating investment real estate is the cost directly related to the sale and liquidation of investment real estate in the period of the enterprise.

The data to be recorded in this indicator is based on the details of the debit side of Account 511 – Sales revenue and service provision corresponding to the credit side of Account 911 – Determining business results (if profit) or based on the details of the credit side of Account 632 – Cost of goods sold corresponding to the credit side of Account 911 – Determining business results (if loss) in the reporting period.

3.7. Financial revenue (Code 22):

This indicator reflects the financial revenue arising in the reporting period of the enterprise. The data to be recorded in this indicator is the accumulated amount arising on the Debit side of Account 515 – Financial revenue corresponding to the Credit side of Account 911 – Determining business results in the reporting period.

In particular, in the case where in the reporting period, the enterprise has a total profit greater than the total loss on exchange rate difference due to revaluation of foreign currency items at the end of the period, the enterprise must present in this indicator the net profit on exchange rate difference due to revaluation of foreign currency items at the end of the period.

When an enterprise prepares a consolidated income statement with its subsidiaries, all financial revenues arising from internal transactions must be eliminated.

3.8. Financial costs (Code 23):

This indicator reflects the total financial expenses incurred during the enterprise’s reporting period. The data to be recorded in this indicator is the cumulative amount arising on the Credit side of Account 635 – Financial expenses corresponding to the Debit side of Account 911 – Determining business results during the reporting period.

In particular, in the case where in the reporting period, the enterprise has a total loss greater than the total exchange rate difference gain due to revaluation of foreign currency items at the end of the period, the enterprise must present in this indicator the net loss on exchange rate difference due to revaluation of foreign currency items at the end of the period.

When an enterprise prepares a consolidated income statement with its subsidiaries, financial expenses arising from internal transactions must be eliminated.

3.9. Borrowing costs (Code 24):

This indicator reflects the borrowing costs payable included in financial expenses in the reporting period. The data to be recorded in this indicator is based on the detailed accounting book Account 635 – Financial expenses in the reporting period.

3.10. Selling expenses (Code 25):

This indicator reflects the total cost of selling goods, products, and services provided arising during the reporting period. The data to be recorded in this indicator is the total amount arising on the credit side of Account 641 – Sales costs corresponding to the debit side of Account 911 – Determining business results during the reporting period.

3.11. Business management costs (Code 26):

This indicator reflects the total business management costs incurred during the reporting period. The data to be recorded in this indicator is the total amount arising on the credit side of Account 642 – Business management costs corresponding to the debit side of Account 911 – Determining business results during the reporting period.

3.12. Net profit from business activities (Code 30):

This indicator reflects the business performance of the enterprise during the reporting period.

Code 30 = Code 20 + Code 21 + Code 22 – (Code 23 + Code 25 + Code 26).

3.13. Other income (Code 31):

indicator reflects other incomes arising during the reporting period. The data to be recorded in this indicator is based on the total arising on the debit side of Account 711 – Other income corresponding to the credit side of Account 911 – Determining business results during the reporting period.

For liquidation and sale of fixed assets, the data to be recorded in this indicator is the difference between the revenue from liquidation and sale of fixed assets higher than the remaining value of fixed assets and the liquidation costs of fixed assets in the reporting period.

When an enterprise prepares a consolidated income statement with its subsidiaries, other income arising from internal transactions must be excluded.

3.14. Other expenses (Code 32):

This indicator reflects the total of other expenses incurred during the reporting period. The data to be recorded in this indicator is based on the total arising on the credit side of Account 811 – Other expenses corresponding to the debit side of Account 911 – Determining business results during the reporting period.

For liquidation and sale of fixed assets, the data to be recorded in this indicator is the difference between the revenue from liquidation and sale of fixed assets less than the remaining value of fixed assets and the cost of liquidation of fixed assets in the reporting period.

When an enterprise prepares a consolidated income statement with its subsidiaries, other expenses arising from internal transactions must be eliminated.

3.15. Other profits (Code 40):

This indicator reflects the difference between other income (after deducting VAT payable calculated by the direct method) and other expenses incurred in the reporting period.

Code 40 = Code 31 – Code 32.

3.16. Total accounting profit before tax (Code 50):

This indicator reflects the total accounting profit realized in the reporting year of the enterprise before deducting corporate income tax expenses from business activities and other activities arising in the reporting period.

Code 50 = Code 30 + Code 40.

3.17. Current corporate income tax expense (Code 51):

This indicator reflects the current corporate income tax expense arising in the reporting year. The data to be recorded in this indicator is based on the total arising on the credit side of Account 8211 – Current corporate income tax expense corresponding to the debit side of Account 911 – Determining business results or based on the arising on the debit side of Account 8211 – Current corporate income tax expense corresponding to the credit side of Account 911 – Determining business results in the reporting period (in this case, the data is recorded in negative numbers in the form of parentheses (…)).

3.18. Deferred corporate income tax expense (Code 52):

This indicator reflects the deferred corporate income tax expense or deferred corporate income tax income arising in the reporting year. The data to be recorded in this indicator is based on the total arising on the credit side of Account 8212 – Deferred corporate income tax expense corresponding to the debit side of Account 911 – Determining business results or based on the arising on the debit side of Account 8212 – Deferred corporate income tax expense corresponding to the credit side of Account 911 – Determining business results in the reporting period (in this case, the data recorded in this indicator is a negative number in the form of a parenthesis (…).

3.19. Profit after corporate income tax (Code 60):

This indicator reflects the total net profit (or loss) after tax from the business’s operations (after deducting corporate income tax expenses) arising in the reporting year.

Code 60 = Code 50 – (Code 51 + Code 52).

3.20. Basic earnings per share (Code 70):

This indicator reflects the basic earnings per share, excluding instruments issued in the future that may dilute the value of the shares. This indicator is presented in the Financial Statements of joint stock companies that are independent enterprises. For parent companies that are joint stock companies, this indicator is only presented in the Consolidated Financial Statements, not presented in the separate Financial Statements of the parent company.

In case the Bonus and Welfare Fund is deducted from after-tax profit, basic earnings per share are determined according to the following formula:

Basic earnings per share	=	Profit or loss attributable to common stockholders	–	Number of deductions for welfare fund
		Weighted average number of common shares outstanding during the period

The determination of profit or loss allocated to shareholders owning common shares and the weighted average number of common shares outstanding during the period is carried out in accordance with the guidance of Circular No. 21/2006/TT-BTC dated March 20, 2006 of the Ministry of Finance and its amendments and supplements (if any).

The amount of bonus and welfare fund deduction is the estimated amount of bonus and welfare fund deduction in the reporting year. If the approved bonus and welfare fund deduction in the following year is different from the estimated amount of the reporting year, the difference will be adjusted retroactively and included in the basic earnings per share of the previous year.

3.21. Diluted earnings per share (Code 71)

3.21.1 This measure reflects diluted earnings per share, taking into account the impact of future instruments that may be converted into shares and dilute the value of the shares.

This indicator is presented on the Financial Statement of a joint stock company which is an independent enterprise. For a parent company which is a joint stock company, this indicator is only presented on the Consolidated Financial Statement, not on the separate Financial Statement of the parent company.

3.21.2. Diluted earnings per share is determined as follows:

Declining earnings per share	=	Profit or loss attributable to common stockholders	–	Number of deductions for welfare fund
		Weighted average number of shares popular in circulation during the period	+	Number of common shares expected to be released further

The amount of bonus and welfare fund deduction is the estimated amount of bonus and welfare fund deduction in the reporting year. If the approved bonus and welfare fund deduction in the following year is different from the estimated amount of the reporting year, the difference will be adjusted retroactively and included in the diluted earnings per share of the previous year.

3.21.3. Determine the profit (or loss) attributable to common stockholders to calculate diluted earnings per share:

Profit or loss attributable to common stock

=

Profit or loss after corporate income tax

–

Adjustments for reduction

+

Incremental adjustments

Where a company presents basic earnings per share in its consolidated financial statements, the profit or loss after corporate income tax for the period is the profit or loss after corporate income tax calculated on the basis of consolidated information. Where a company presents in its separate financial statements, the profit or loss after corporate income tax for the period is the profit or loss after tax of the company alone.

1. a) Adjustments to reduce profit or loss after corporate income tax to calculate profit or loss allocated to common shares when determining diluted earnings per share.

– Preferred stock dividends: Preferred stock dividends include: non-cumulative preferred stock dividends announced in the reporting period and cumulative preferred stock dividends arising in the reporting period. Preferred stock dividends are calculated as follows:

Preferred stock dividends

=

Preferred stock dividend yield​

x

Par value of preferred shares

– The larger difference between the fair value of the payment to the owner and the book value of the preferred stock when the joint stock company buys back the owner’s preferred stock.

– The excess of the fair value of the common stock or other consideration payable under the beneficial conversion terms at the time of payment over the fair value of the common stock issued under the original conversion terms.

– Dividends or other items related to potential common shares that have a dilutive effect;

– Gains recognized during the period relating to dilutive potential ordinary shares; and

– Other factors that reduce profit after tax if the conversion of potential common shares into common shares has a dilutive effect. For example, costs to convert convertible bonds into common shares reduce profit after income tax for the period.

1. b) Determine the adjustments to increase profit or loss after corporate income tax:

– The larger difference between the fair value of the payment to the owner and the book value of the preferred stock when the joint stock company buys back the owner’s preferred stock.

– Factors that increase profit after tax if the conversion of potential dilutive common stock into common stock. For example, converting convertible bonds into common stock will reduce the interest expense related to the convertible bonds and increase profit after corporate income tax for the period.

3.21.4. Number of shares to calculate diluted earnings per share

The number of shares used to calculate diluted earnings per share is determined as the weighted average number of common shares outstanding during the period plus (+) the weighted average number of common shares that would be issued in the event that all potential dilutive common shares are converted into common shares.

1. a) Determination of the weighted average number of common shares outstanding during the period is carried out according to the guidance of Circular No. 21/2006/TT-BTC dated March 20, 2006 of the Ministry of Finance and its amendments , supplements and replacements (if any).
2. b) Determine the weighted average number of common shares to be issued during the period

Common shares to be issued during the period are considered potential common shares that have a dilutive effect on earnings per share, including:

– Call options and similar instruments;

– Convertible financial instruments;

– Conditionally issued common shares;

– Contracts are paid in common shares or in cash;

– Options have been purchased;

– Issued put options.

The determination of the number of additional common shares to be issued during the period is carried out in accordance with the provisions of Vietnamese Accounting Standard No. 30 – Earnings per share.

1. Instructions for preparing and presenting Cash Flow Statement (Form No. B03 – DN)
2. Principles of preparing and presenting Cash Flow Statements

1.1. The preparation and presentation of annual cash flow statements and interim accounting periods must comply with the provisions of Vietnamese Accounting Standard No. 24 – Cash flow statements and Vietnamese Accounting Standard No. 27 – Interim financial statements. The method of preparing Cash flow statements is guided for the most common transactions. Enterprises shall base on the nature of each transaction to present cash flows appropriately if there are no specific instructions in this Circular. Indicators without figures do not need to be presented. Enterprises may renumber but may not change the codes of the indicators.

1.2. Short-term investments considered as cash equivalents presented in the Cash Flow Statement only include short-term investments with a recovery or maturity period of no more than 3 months, which can be easily converted into a certain amount of cash and have no risk of conversion into cash from the date of purchase of the investment at the end of the accounting period. For example: bank bills, treasury bills,… with a recovery or maturity period of no more than 3 months from the date of purchase.

1.3. Enterprises must present cash flows on the Cash Flow Statement according to three types of activities: Business activities, investment activities and financial activities according to the provisions of Vietnamese Accounting Standard No. 24 – Cash Flow Statement.

– Cash flow from operating activities is the cash flow arising from the primary revenue-generating activities of the enterprise and other activities that are not investing or financing activities;

– Cash flow from investing activities is the cash flow arising from purchasing, constructing, liquidating , and selling long-term assets and other investments not classified as cash equivalents ;

– Cash flow from financial activities is the cash flow arising from activities that create changes in the size and structure of the enterprise’s equity and debt capital.

1.4. Enterprises shall present cash flows from operating activities, investing activities and financing activities in the manner most appropriate to the nature of their business.

1.5. Cash flows arising from the following operating, investing and financing activities are reported on a net basis:

– Collect and pay money on behalf of customers such as rent collection, payment and return to property owners;

– Collecting and disbursing cash for items with fast turnover and short maturity such as: Buying and selling foreign currency; Buying and selling investments; Other short-term loans or borrowings with a payment term of no more than 3 months.

1.6. Cash flows arising from foreign currency transactions must be converted into the official currency used in accounting records and financial statements at the exchange rate at the time of the transaction.

1.7. Investment and financing transactions that do not directly use cash or cash equivalents are not presented in the Cash Flow Statement. For example:

– The purchase of assets by assuming directly related liabilities or through finance leasing transactions;

– Buying a business through the issuance of shares;

– Conversion of loans and financial leases into equity.

1.8. Cash and cash equivalents at the beginning and end of the period, the impact of changes in exchange rates converting cash and cash equivalents in foreign currencies at the end of the period must be presented as separate items on the Cash Flow Statement to compare the figures with the corresponding items on the Financial Position Statement.

1.9. Enterprises must present the value and reasons for cash and cash equivalents with large ending balances held by the enterprise but not used due to legal restrictions or other constraints that the enterprise must comply with.

1.10. In case an enterprise borrows to pay directly to contractors or suppliers of goods and services (loan money is transferred directly from the lender to the contractor or supplier without transferring it to the enterprise’s account), the enterprise must still present it on the Cash Flow Statement, specifically:

– The amount of borrowing is presented as a cash inflow from financing activities;

– Amounts paid to suppliers of goods or services or to contractors are presented as cash outflows from operating or investing activities depending on the transaction.

1.11. In case an enterprise incurs a clearing payment with the same entity, the presentation of the cash flow statement is carried out according to the following principles:

– If the offsetting involves transactions classified in the same cash flow, it is presented on a net basis (for example, in a barter transaction where the purchase of inventories is not similar and the sale of inventories is offset, etc.);

– If the offsetting involves transactions classified in different cash flows, the enterprise is not presented on a net basis but must present the value of each transaction separately (For example, offsetting sales receivables with loans,…).

1.12. For cash flows from government bond purchases and sales and securities REPO transactions: The seller presents cash flows from financing activities; the buyer presents cash flows from investing activities.

2. Basis for preparing Cash Flow Statement

The preparation of the Cash Flow Statement is based on:

– Financial report;

– Business performance report;

– Notes to the Financial Statements;

– Previous period cash flow statement;

– Other accounting documents, such as: General accounting books, detailed accounting books of accounts “Cash”, “Demand deposits”, “Cash in transit”; General accounting books and detailed accounting books of other related accounts, fixed asset depreciation calculation and allocation tables and other detailed accounting documents,…

3. Requirements for opening and recording accounting books to prepare Cash Flow Statement

– The detailed accounting books of accounts receivable, payable, and inventory must be monitored in detail for each transaction to be able to present the cash flow of collection or payment according to 3 types of activities: Business activities, investment activities, and financial activities. For example: The amount of debt payment to the contractor related to the construction and development activities is classified as cash flow from investment activities, the amount of debt payment to the supplier of goods and services for production and business is classified as cash flow from business activities.

– For detailed accounting books, the accounts reflecting money must be detailed to track the cash flows of receipts and payments related to 3 types of activities: Business activities, investment activities and financial activities as a basis for synthesis when preparing the cash flow statement. For example, for the amount of money paid to the bank for principal and interest on loans, the enterprise must separately reflect the amount of money paid for interest on loans as cash flow from business or investment activities and the amount of money paid for principal on loans as cash flow from financial activities.

– At the end of the accounting period, when preparing the Cash Flow Statement, the enterprise must determine short-term investments with a recovery or maturity of no more than 3 months from the date of purchase that satisfy the definition of cash equivalents in accordance with the provisions of the Standard “Cash Flow Statement” to exclude from cash flow from investment activities. The value of cash equivalents is added (+) to the “Cash and cash equivalents at the end of the period” indicator on the Cash Flow Statement.

4. Method of preparing annual cash flow statement

4.7. Prepare reports on cash flow indicators from business activities

Cash flows from operating activities reflect cash inflows and outflows related to production and business activities during the period, including cash flows related to securities held for trading purposes.

Cash flows from operating activities are prepared using one of two methods: the direct method or the indirect method.

4.7.7. Prepare reports on cash flow indicators from business activities using the direct method (See Form No. B 03-DN)

1. a) Establishment principles:

According to the direct method, cash inflows and cash outflows from business operations are determined and presented in the Cash Flow Statement by directly analyzing and summarizing cash receipts and payments according to each receipt and payment item from the enterprise’s general and detailed accounting books.

1. b) Method of establishing specific targets

– Revenue from sales, provision of services and other revenues (Code 01)

This indicator is based on the total amount collected (total payment price) in the period from selling goods, products, providing services, royalties, fees, commissions and other revenues (including revenue from selling finished products and real estate goods, revenue from leasing investment real estate & leasing fixed assets, selling trading securities, etc. ), including the amounts collected from receivables related to transactions of selling goods, providing services and other revenues arising from previous periods but only collected in this period and the amount of advance payment from buyers of goods and services.

This indicator does not include proceeds from liquidation, sale of fixed assets, investment real estate (including investment real estate held for lease and investment real estate held for price increase), proceeds from loan recovery, capital contribution to other entities, dividends and distributed profits and other proceeds classified as cash flows from investing activities; proceeds from borrowing, receiving capital contributions from owners and other proceeds classified as cash flows from financial activities.

Data to be recorded in this indicator is taken from the accounting books of Accounts 111 – Cash, Account 112 – Demand deposits (receipts), accounting books of accounts receivable (details of revenue from sales, provision of services, immediate payment of payable debts), after comparison with the accounting books of Accounts 511 – Sales and service revenue, Account 131 – Receivables from customers (details of sales revenue, provision of services for which immediate payment has been made, amount of receivables recovered or advance payments collected during the period,…) or Accounts 515 – Financial activity revenue, Account 121 – Trading securities (details of revenue from selling trading securities).

– Payments to suppliers of goods and services (Code 02)

This indicator is based on the total amount paid during the period for purchasing goods and services, paying expenses for production and business, including the amount spent on purchasing business securities and the amount paid for debts payable or advances to sellers of goods and service providers related to production and business activities.

This indicator does not include expenses for purchasing and investing in the construction of fixed assets and real estate (including expenses for purchasing raw materials for construction), expenses for lending, contributing capital to invest in other units and other expenses classified as cash flows from investing activities; expenses for repaying loan principal, returning capital contributions to owners, dividends and profits paid to owners and other expenses classified as cash flows from financing activities.

The data to be recorded in this indicator is taken from the accounting books of Accounts 111 – Cash, Account 112 – Non-term deposits (cash disbursement part), accounting books of accounts receivable and loans (details of loans received or receivables collected and immediately paid back to accounts payable), after being compared with the accounting books of Accounts 331 – Payable to sellers, and accounts reflecting inventories. This indicator is recorded in negative numbers in the form of parentheses (…).

– Payment to employees (Code 03)

This indicator is based on the total amount paid to employees during the reporting period in terms of salary, wages, allowances, bonuses, etc. paid or advanced by the enterprise.

The data to be recorded in this indicator is taken from the accounting books of Account 111 – Cash, Account 112 – Demand deposits (details of money paid to employees), after being compared with the accounting book of Account 334 – Payable to employees (details of money paid) in the reporting period. This indicator is recorded in negative numbers in the form of parentheses (…).

– Borrowing costs paid (Code 04)

This indicator is based on the total borrowing costs paid in the reporting period, including borrowing costs incurred in the period and paid immediately in this period, interest payable in previous periods paid in this period, and prepaid borrowing costs in this period.

This indicator does not include the amount of borrowing costs paid during the period that are capitalized into the value of unfinished assets classified as cash flows from investing activities. In case the amount of borrowing costs paid during the period is both capitalized and included in financial expenses, the enterprise shall base on the interest capitalization rate applied to the reporting period according to the provisions of Vietnamese Accounting Standard No. 16 – Borrowing costs to determine the amount of borrowing costs paid for the cash flow from business activities and cash flow from investing activities.

The data to be recorded in this indicator is taken from the accounting books of Accounts 111 – Cash, Account 112 – Non-term deposits, Account 113 – Cash in transit (details of money paid for borrowing costs); accounting books of accounts receivable (details of money paid for borrowing costs from money collected from receivables) in the reporting period, after being compared with the accounting books of Account 335 – Expenses payable, Account 635 – Financial expenses, Account 341 – Borrowings and financial leasing debts and other related accounts. This indicator is recorded in negative numbers in the form of parentheses (…).

– Corporate income tax paid (Code 05)

This indicator is based on the total amount of corporate income tax paid to the State in the reporting period, including the amount of corporate income tax paid this period, the amount of corporate income tax owed from previous periods paid in this period and the amount of corporate income tax paid in advance (if any).

The data to be recorded in this indicator is taken from the accounting books of Account 111 – Cash, Account 112 – Non-term deposits, Account 113 – Cash in transit (details of corporate income tax payments), after being compared with the accounting book of Account 3334 – Corporate income tax. This indicator is recorded in negative numbers in the form of parentheses (…).

– Other revenue from business activities (Code 06)

This indicator is based on the total amount of money collected from other sources of business activities, in addition to the amount of money collected in Code 01, such as: Money collected from other income (compensation, fines, bonuses and other amounts, etc.); Money collected from tax refunds; Money collected from receiving deposits and bets; Money recovered from deposits and bets; Money awarded and supported by outside organizations and individuals; Money received to increase funds paid by superiors or subordinates, etc.;

The data to be recorded in this indicator is taken from the revenue in the accounting books of Account 111 – Cash, Account 112 – Demand deposits after being compared with the accounting books of Account 711 – Other income, Account 133 – Deductible VAT, Account 1383 – Special consumption tax on imported goods, Account 141 – Advances, Account 244 – Deposits, bets, Account 333 – Taxes and amounts payable to the State and the accounting books of other related accounts in the reporting period.

– Other expenses for business activities (Code 07)

This indicator is based on the total amount spent on other items, in addition to the expenses related to production and business activities in the reporting period reflected in Codes 02, 03, 04, 05, such as: Compensation, fines and other expenses; Tax payments (excluding corporate income tax); Annual fees, charges, land rents; Social insurance, health insurance, unemployment insurance, and trade union fees; Deposits and bets; Returns of deposits and bets; Direct payments from payable reserves; Direct payments from reward and welfare funds; Direct payments from other funds belonging to equity;…

The data to be recorded in this indicator is taken from the expenditures in the accounting books of Accounts 111 – Cash, Account 112 – Non-term deposits, Account 113 – Cash in transit in the reporting period, after being compared with the accounting books of Accounts 811 – Other expenses, Account 244 – Deposits, bets, Account 333 – Taxes and amounts payable to the State, Account 338 – Other payables, Account 344 – Received deposits, bets, Account 352 – Provisions for payables, Account 353 – Reward and welfare fund, Account 356 – Science and technology development fund and other related accounts. This indicator is recorded in negative numbers in the form of parentheses (…).”

– Net cash flow from operating activities (Code 20)

The indicator “Net cash flow from operating activities” reflects the difference between the total amount of money received and the total amount of money spent from operating activities in the reporting period. The data to be recorded in this indicator is calculated by the total data of the indicators from Code 01 to Code 07. If the data of this indicator is a negative number, it is recorded in parentheses (…).

Code 20 = Code 01 + Code 02 + Code 03 + Code 04 + Code 05 + Code 06 + Code 07

4.1.2. Prepare reports on cash flow indicators from business activities using the indirect method (See Form No. B03-DN)

1. Establishment principles:

Under the indirect method, cash inflows and cash outflows from operating activities are calculated and determined first by adjusting operating profit before corporate income tax for the effects of non-cash items, period-related changes in inventories, receivables and payables from operating activities and items whose cash effects are cash flows from investing activities or cash flows from financing activities, including:

– Non-cash expenses such as: Depreciation of fixed assets and investment real estate, allocation of one-time land rental payments, provisions,…

– Non-cash profits and losses, such as foreign exchange gains and losses; capital contributions in non-cash assets;

– Profits and losses are classified as cash flows from investment activities, such as: Profits and losses from liquidation and sale of fixed assets and investment real estate, loan interest, deposit interest, dividends and distributed profits, etc.;

– Borrowing costs have been recorded in the Income Statement for the period.

– Cash flows from operating activities are adjusted for changes in working capital, long-term deferred expenses, and other revenues and expenses from operating activities, such as:

+ Changes during the reporting period in inventory items, receivables, payables from business activities;

+ Changes in pending allocation costs;

+ Borrowing costs paid;

+ Corporate income tax paid;

+ Other revenue from business activities;

+ Other expenses from business activities.

1. Method of establishing specific targets

– Profit before tax (Code 01)

This indicator is taken from the Total accounting profit before tax (Code 50) on the Business performance report of the reporting period. If this figure is negative (in case of loss), it is recorded in parentheses (…).

– Depreciation of fixed assets and investment real estate (Code 02)

+ In case the enterprise can separate the depreciation remaining in inventory and the depreciation that has been calculated in the business performance report in the period: The indicator “Depreciation of fixed assets and investment real estate” only includes the depreciation that has been calculated in the business performance report in the period and the allocation of pending allocation costs for one-time land rent that does not meet the conditions for recognition as intangible fixed assets; The indicator “Increase and decrease in inventory” does not include the depreciation that is in the value of inventory at the end of the period (not yet determined as consumed in the period);

+ In case the enterprise cannot separate the depreciation remaining in inventory and the depreciation that has been calculated in the Business Performance Report in the reporting period, it shall be implemented according to the following principle: The indicator “Depreciation of fixed assets and investment real estate” includes the depreciation that has been calculated in the Business Performance Report in the period plus the depreciation related to unsold inventory; The indicator “Increase and decrease in inventory” includes the depreciation of fixed assets in the value of inventory at the end of the period (not yet determined as consumed in the period).

In all cases, the enterprise must exclude from the Cash Flow Statement the depreciation included in the value of unfinished basic construction, the depreciation recorded in the Science and Technology Development Fund that has formed fixed assets, and the Welfare Reward Fund that has formed fixed assets arising during the period. The data of this indicator is added (+) to the data of the “Profit before tax” indicator.

– Provisions (Code 03)

This indicator reflects the impact of the provisioning, reversal and use of provisions on cash flows in the reporting period. This indicator is prepared based on the difference between the opening balance and the closing balance of the provisions for asset losses (provisions for devaluation of trading securities, provisions for losses on investments in other entities, provisions for investments held to maturity, provisions for devaluation of inventories, provisions for bad debts, provisions for losses on biological assets) and provisions payable on the Financial Position Statement.

This indicator data is added (+) to the “Profit before tax” indicator data if the total ending balance of provisions is greater than the total opening balance or is deducted from the “Profit before tax” indicator data if the total ending balance of provisions is less than the total opening balance and is recorded as a negative number in parentheses (…).

– Exchange rate difference gains/losses due to revaluation of foreign currency items (Code 04)

This indicator reflects the exchange rate difference (or loss) due to revaluation of foreign currency items that have been reflected in pre-tax profit in the reporting period. This indicator is established based on the difference in the Credit or Debit amount of Account 911 – Determining business results compared with accounting books of Account 515 – Financial income (if the gain is due to revaluation of foreign currency items) or Account 635 – Financial expenses (if the loss is due to revaluation of foreign currency items).

This indicator data is subtracted (-) from the “Profit before tax” indicator data (if there is a profit from exchange rate difference) or added (+) to the “Profit before tax” indicator (if there is a loss from exchange rate difference).

– Profit/loss from investment and financial activities (Code 05)

This indicator is based on the total profits and losses arising during the period that have been reflected in pre-tax profits but are classified as cash flows from investment and financial activities, including:

+ Profits and losses from liquidation and sale of fixed assets and investment real estate;

+ Profits and losses from revaluation of non-monetary assets contributed as capital or invested in other entities;

+ Exchange rate difference profit/loss arising from payment of investment and financial activities;

+ Profits and losses from selling and recovering financial investments (excluding profits and losses from trading securities), such as: Investments in subsidiaries, joint ventures, associates, other investments; Investments held to maturity;

+ Loan interest, deposit interest, dividends and shared profits.

This indicator is prepared based on the detailed accounting books of Accounts 511 – Sales and service revenue, Account 515 – Financial revenue, Account 711 – Other income, Account 632 – Cost of goods sold, Account 635 – Financial expenses, Account 811 – Other expenses and other related accounts (details of profits and losses determined as cash flows from investment activities) in the reporting period.

This indicator data is subtracted (-) from the “Profit before tax” indicator data (if the investment activity has a net profit) and is recorded as a negative number in parentheses (…); or added (+) to the “Profit before tax” indicator (if the investment activity has a net loss).

– Borrowing costs (Code 06)

This indicator reflects the borrowing costs recorded in the Income Statement during the reporting period, including the bond issuance costs of regular bonds and convertible bonds; the amount of borrowing costs per period calculated at the actual interest rate is recorded as an increase in the debt component of convertible bonds. This indicator is prepared based on the accounting book Account 635 – Financial expenses (details of borrowing costs of the reporting period) after comparing with the “Borrowing costs” indicator in the Income Statement.

This indicator figure is added to the “Profit before tax” indicator figure.

– Other adjustments (Code 07)

This indicator reflects the amount of provision or refund of the Price Stabilization Fund or the Science and Technology Development Fund during the period. This indicator is prepared based on the accounting books of Account 356 – Science and Technology Development Fund, Account 357 – Price Stabilization Fund.

This indicator data is added to the “Profit before tax” indicator data if additional funds are set aside during the period or is deducted from the “Profit before tax” indicator if funds are returned during the period.

– Profit from operating activities before changes in working capital (Code 08)

This indicator reflects the cash flow generated from business activities in the reporting period after excluding the impact of non-cash income and expense items. This indicator is based on pre-tax profit plus (+) adjustments.

Code 08 = Code 01 + Code 02 + Code 03 + Code 04 + Code 05 + Code 06 + Code 07.

If this indicator is negative, write it in parentheses (…).

– Increase, decrease in receivables (Code 09)

This indicator is based on the total difference between the ending balance and the beginning balance of the accounts receivable (details of the part related to production and business activities), such as: Account 131 – Receivables from customers, Account 136 – Internal receivables, Account 138 – Other receivables, Account 133 – Deductible VAT, Account 141 – Advances, Account 244 – Deposits, Account 331 – Payables to sellers (including input VAT of investment activities and the amount paid in advance to sellers ) in the reporting period.

This indicator does not include receivables related to investment activities, such as: Advance payments to construction contractors; Receivables from loans (both principal and interest); Receivables from deposit interest, dividends and shared profits; Receivables from liquidation and sale of fixed assets, investment real estate, investments in other units (except for trading securities); Value of fixed assets used as collateral, mortgage, etc.

This indicator data is added (+) to the indicator “Profit from business activities before changes in working capital” if the sum of the ending balances is less than the sum of the beginning balances. This indicator data is subtracted (-) from the indicator data “Profit from business activities before changes in working capital” if the sum of the ending balances is greater than the sum of the beginning balances and is recorded as a negative number in parentheses (…).

– Increase, decrease inventory (Code 10)

This indicator is based on the total difference between the ending balance and the beginning balance of the inventory accounts (excluding the balance of the “Provision for inventory price reduction” account on the basis of excluding: Value of inventory used for investment activities in construction and development or inventory used to exchange for fixed assets, investment real estate; Trial production costs are included in the original price of fixed assets formed from construction and development). In case inventory is purchased during the period but the purpose of use (for business activities or investment in construction and development) is not yet determined, the value of inventory is calculated in this indicator.

In case the enterprise can separate the depreciation of fixed assets still in inventory and the depreciation that has been calculated in the Business Performance Report in the period (the indicator “Depreciation of fixed assets” – Code 02 only includes the depreciation of fixed assets that has been calculated in the Business Performance Report in the period), this indicator does not include the depreciation of fixed assets in the value of inventory at the end of the period (not yet determined as consumed in the period);

In case the enterprise cannot separate the depreciation of fixed assets still in inventory and the depreciation that has been calculated in the Business Performance Report in the period (the indicator “Depreciation of fixed assets and investment real estate” – Code 02 includes the depreciation of fixed assets related to unsold inventory), this indicator includes the depreciation of fixed assets in the value of inventory at the end of the period (not yet determined as consumed in the period).

This indicator data is added (+) to the indicator “Profit from business activities before changes in working capital” if the sum of the ending balances is less than the sum of the beginning balances. This indicator data is subtracted (-) from the indicator “Profit from business activities before changes in working capital” if the sum of the ending balances is greater than the sum of the beginning balances and is recorded as a negative number in parentheses (…).

– Increase, decrease in payables (excluding interest payable, corporate income tax payable) (Code 11)

This indicator is based on the total difference between the ending balance and the beginning balance of the payable accounts (details of the part related to production and business activities), such as Account 331 – Payable to sellers, Account 333 – Taxes and amounts payable to the State, Account 334 – Payable to employees, Account 335 – Expenses payable, Account 336 – Internal payables, Account 337 – Payment according to construction contract progress, Account 338 – Other payables, Account 344 – Received deposits, deposits, Account 131 – Receivables from customers (details of prepayments from buyers).

This indicator does not include corporate income tax payable (Credit Account 3334 – Corporate income tax), borrowing costs payable (Credit Account 335 – Expenses payable, details of interest payable).

This indicator does not include payables related to investment activities, such as: Amounts paid in advance by buyers related to the liquidation and sale of fixed assets and investment real estate; Payables related to the purchase and construction of fixed assets and investment real estate; Payables for purchasing capital instruments and debt instruments, etc.; and payables related to financial activities, such as: Payables for loan principal, bond principal, financial lease debt; dividends and profits payable.

This indicator data is added (+) to the indicator “Profit from business activities before changes in working capital” if the total of the ending balances is greater than the total of the beginning balances. This indicator data is subtracted (-) from the indicator data “Profit from business activities before changes in working capital” if the total of the ending balances is less than the total of the beginning balances and is recorded as a negative number in parentheses (…).

– Increase, decrease pending allocation costs (Code 12)

This indicator is based on the total difference between the ending balance and the beginning balance of Account 242 – Expenses awaiting allocation in the reporting period, excluding expenses awaiting allocation related to cash flows from investment activities, such as: One-time land rent that does not meet the criteria for recognition as intangible fixed assets,…

This indicator data is added (+) to the indicator “Profit from business activities before changes in working capital” if the ending balance is less than the beginning balance. This indicator data is subtracted (-) from the indicator data “Profit from business activities before changes in working capital” if the ending balance is greater than the beginning balance and is recorded as a negative number in parentheses (…).

– Increase and decrease in trading securities (Code 13)

This indicator is based on the total difference between the ending balance and the beginning balance of Account 121 – Trading securities in the reporting period.

This indicator data is added (+) to the indicator “Profit from business activities before changes in working capital” if the ending balance is less than the beginning balance. This indicator data is subtracted (-) from the indicator data “Profit from business activities before changes in working capital” if the ending balance is greater than the beginning balance and is recorded as a negative number in parentheses (…).

– Borrowing costs paid (Code 14)

This indicator is based on the total amount of borrowing costs paid in the reporting period, including borrowing costs incurred in the period and paid immediately in this period, borrowing costs payable in previous periods paid in this period, and borrowing costs paid in advance in this period.

This indicator does not include the amount of borrowing costs paid during the period that are capitalized into the value of unfinished assets classified as cash flows from investing activities. In case the amount of borrowing costs paid during the period is both capitalized and included in financial expenses, the enterprise shall base on the interest capitalization rate applied to the reporting period according to the provisions of Vietnamese Accounting Standard No. 16 – Borrowing costs to determine the amount of borrowing costs paid for cash flows from business activities and cash flows from investing activities.

The data to be recorded in this indicator is taken from the accounting books of Accounts 111 – Cash, Account 112 – Demand deposits, Account 113 – Cash in transit (details of money spent on borrowing costs); accounting books of accounts receivable (details of money spent on borrowing costs from money collected from receivables) in the reporting period, after being compared with the accounting books of Account 335 – Expenses payable, Account 635 – Financial expenses, Account 341 – Borrowings and financial leasing debts and other related accounts.

This indicator figure is subtracted (-) from the indicator figure “Profit from business activities before changes in working capital” and is recorded as a negative number in parentheses (…).

– Corporate income tax paid (Code 15)

This indicator is based on the total amount of corporate income tax paid to the State in the reporting period, including the amount of corporate income tax paid this period, the amount of corporate income tax owed from previous periods paid in this period and the amount of corporate income tax paid in advance (if any).

The data to be recorded in this indicator is taken from the accounting books of Account 111 – Cash, Account 112 – Non-term deposits, Account 113 – Cash in transit (details of corporate income tax payments). After being compared with the accounting book of Account 3334 – Corporate income tax, the data of this indicator is deducted (-) from the data of the indicator “Profit from business activities before changes in working capital” and is recorded in negative numbers in the form of parentheses (…).

– Other revenue from business activities (Code 16)

This indicator reflects other revenues arising from business activities other than those mentioned in Codes 01 to 14, such as: Money received from outside organizations and individuals, usually supported to increase the enterprise’s funds; Money received to increase funds paid by superiors or subordinates; Interest on deposits of the Price Stabilization Fund is recorded to increase the Fund;… in the reporting period.

This indicator is based on the accounting books of Accounts 111 – Cash, Account 112 – Non-term deposits, Account 113 – Cash in transit after reconciling with the accounting books of related accounts in the reporting period . The data of this indicator is added (+) to the data of the indicator “Profit from business activities before changes in working capital”.

– Other expenses for business activities (Code 17)

This indicator reflects other expenses arising from business activities other than those stated in Codes 01 to 14, such as: Expenditures from the Reward and Welfare Fund, Science and Technology Development Fund, etc.

This indicator is based on the accounting books of Accounts 111 – Cash, Account 112 – Demand Deposits, Account 113 – Cash in Transit after reconciling with the accounting books of related accounts in the reporting period. The data of this indicator is subtracted (-) from the data of the indicator “Profit from business activities before changes in working capital”.

– Net cash flow from operating activities (Code 20)

The indicator “Net cash flow from operating activities” reflects the difference between the total amount of money received and the total amount of money spent from operating activities in the reporting period. This indicator is calculated by adding up the data of indicators with codes from Code 08 to Code 17. If this indicator is a negative number, it will be recorded in parentheses (…).

Code 20 = Code 08 + Code 09 + Code 10 + Code 11 + Code 12 + Code 13 + Code 14 + Code 15 + Code 16 + Code 17

4.2. Prepare reports on cash flow indicators from investment activities

1. a) Establishment principles:

– Cash flows from investing activities are prepared and presented in the Cash Flow Statement separately for cash inflows and cash outflows, except for the case where cash flows are reported on a net basis as mentioned in paragraph 18 of Vietnamese Accounting Standard No. 24 – Cash Flow Statement.

– Cash flows from investing activities are prepared using the direct or modified direct method.

+ According to the direct method, cash inflows and outflows during the period from investing activities are determined by directly analyzing and synthesizing cash receipts and expenditures according to each revenue and expenditure item from the enterprise’s accounting records.

+ Under the adjusted direct method, cash inflows and outflows during the period are determined by the difference between the ending balance and the beginning balance of the items on the relevant Financial Position Statement, then adjusted for the effects of non-cash items.

+ This appendix guides the preparation of cash flow from investing activities using the direct method. In case of preparation using the adjusted direct method, enterprises shall apply the method of preparing the Consolidated Cash Flow Statement prescribed in Circular No. 202/2014/TT-BTC dated December 22, 2014 of the Ministry of Finance guiding the method of preparing and presenting the Consolidated Financial Statement and the amended, supplemented, and replaced documents (if any) for implementation.

1. b) Method of establishing specific indicators using the direct method (See Form No. B03-DN)

– Cash spent on purchasing and constructing fixed assets and other long-term assets (Code 21)

This indicator is based on the total amount actually spent to purchase and construct tangible fixed assets, intangible fixed assets, investment real estate, one-time land rental payments that do not meet the criteria for recognition as intangible fixed assets, money spent for the implementation phase that has been capitalized into intangible fixed assets, money spent for investment activities in construction of unfinished fixed assets and investment real estate in the reporting period. The trial production cost after offsetting with the amount of money collected from selling trial production products of fixed assets formed from construction activities is added to this indicator (if the expense is greater than the revenue) or deducted from this indicator (if the expense is less than the revenue).

This indicator reflects the amount actually paid to purchase raw materials and assets used for construction but not yet used for construction investment activities at the end of the period; the amount advanced to construction contractors but not yet accepted; the amount paid to repay debts to sellers during the period directly related to construction investment and procurement.

In case of purchasing raw materials and assets used for both production, business and construction investment purposes, but at the end of the period, the value of raw materials and assets used for construction investment activities or production and business activities cannot be determined, the amount paid is not reflected in this indicator but is reflected in the cash flow from business activities.

This indicator does not include financial lease debt, value of other non-cash assets used to pay for purchases of fixed assets, investment real estate, construction works or value of fixed assets, investment real estate, construction works increased during the period but not yet paid in cash.

The data to be recorded in this indicator is based on the accounting books of Accounts 111 – Cash, Account 112 – Non-term deposits, Account 113 – Cash in transit (details of the amount spent on purchasing, constructing fixed assets and other long-term assets, including capitalized borrowing costs), the accounting books of accounts receivable (details of debt collection transferred immediately for purchasing and construction activities), the accounting books of Account 3411 – Loans (details of loan received transferred immediately to the seller), the accounting books of Account 331 – Payables to sellers (details of advance payments or debt repayments to construction contractors, debt repayments to sellers of fixed assets, investment real estate), after comparing with the accounting books of Accounts 211 – Tangible fixed assets, Account 213 – Intangible fixed assets, Account 217 – Investment real estate, Account 241 – Construction in progress dang, Account 242 – Costs awaiting allocation in the reporting period. This indicator is recorded in negative numbers in the form of parentheses (…).

– Proceeds from liquidation and sale of fixed assets and other long-term assets (Code 22)

This indicator is based on the net amount collected from liquidation and sale of tangible fixed assets, intangible fixed assets, investment real estate (including investment real estate held for lease or waiting for price increase) in the reporting period, including the amount of recovered debts directly related to the liquidation and sale of fixed assets and other long-term assets.

This indicator does not include revenue from non-cash assets or receivables that have not been collected in the reporting period from the liquidation and sale of fixed assets, investment real estate and other long-term assets; does not include non-cash expenses related to the liquidation and sale of fixed assets, investment real estate and the remaining value of fixed assets and investment real estate contributed to joint ventures or associations or losses.

The data to be recorded in this indicator is the difference between the amount of money received and the amount spent on liquidation, transfer of fixed assets, investment real estate and other long-term assets. The amount of money received is taken from the accounting books of Accounts 111 – Cash, Account 112 – Demand deposits, Account 113 – Cash in transit, after being compared with the accounting books of Accounts 511 – Sales revenue and service provision, Account 711 – Other income, Account 131 – Receivables from customers (details of money received from liquidation, transfer of fixed assets, investment real estate and other long-term assets) in the reporting period. The amount of money spent is taken from the accounting books of Accounts 111 – Cash, Account 112 – Demand Deposits, Account 113 – Cash in Transit, after being compared with the accounting books of Accounts 811 – Other Expenses, Account 632 – Cost of Goods Sold (Details on liquidation and sale of fixed assets and investment real estate) in the reporting period. This indicator is recorded in negative numbers in parentheses (…) if the actual amount received is less than the actual amount spent.

– Money spent on lending and purchasing debt instruments of other entities (Code 23)

This indicator is based on the total amount of money deposited in banks with a term of over 3 months, money spent on loans to other parties, money spent by the buyer in the repurchase of government bonds and securities REPO transactions, and money spent on purchasing debt instruments of other entities (bonds, commercial papers, preferred shares classified as liabilities, etc.) for investment purposes held to maturity in the reporting period.

This indicator does not include money spent on purchasing debt instruments considered as cash equivalents and purchasing debt instruments held for trading purposes (making profit from the difference between buying and selling prices); Loans, purchases of debt instruments paid with non-monetary assets or debt rollover.

The data to be recorded in this indicator is taken from the accounting books of Account 111 – Cash, Account 112 – Non-term deposits, Account 113 – Cash in transit, after being compared with the accounting books of Account 128 – Investments held to maturity , Account 171 – Government bond repurchase transactions in the reporting period. This indicator is recorded in negative numbers in the form of parentheses (…).

– Money recovered from lending and reselling debt instruments of other entities (Code 24)

This indicator is based on the total amount collected from withdrawing bank deposits with terms of over 3 months; Money collected from the buyer in the repurchase of government bonds and securities REPO transactions; Money recovered from loan principal, bond principal, preferred stocks classified as liabilities and debt instruments of other units in the reporting period.

This indicator does not include proceeds from the sale of debt instruments considered as cash equivalents and the sale of debt instruments classified as trading securities; It does not include proceeds from the recovery of non-cash assets or the conversion of debt instruments into equity instruments of other entities.

Data to be recorded in this indicator is taken from the accounting books of Account 111 – Cash, Account 112 – Demand deposits, Account 113 – Cash in transit, after being compared with the accounting books of Account 128 – Investments held to maturity, Account 171 – Government bond repurchase transactions in the reporting period.

– Money spent on capital investment in other units (Code 25)

This indicator is based on the total amount spent to invest in other entities’ capital instruments in the reporting period (including debt payments to purchase capital instruments from the previous period), including capital investment expenditures in the form of purchasing common shares with voting rights, purchasing preferred shares classified as equity, contributing capital to subsidiaries, joint ventures, associates, other investments, etc.

This indicator does not include expenses for purchasing shares held for business purposes; expenses for purchasing preferred shares classified as liabilities; investments in other entities using non-monetary assets; investments in the form of issuing shares or bonds; conversion of debt instruments into capital contributions or unpaid debts.

The data to be recorded in this indicator is taken from the accounting books of Accounts 111 – Cash, Account 112 – Demand deposits, Account 113 – Cash in transit, after being compared with the accounting books of Accounts 221 – Investment in subsidiaries, Account 222 – Investment in joint ventures and associated companies, Account 228 – Other investments, Account 331 – Payable to sellers during the reporting period and is recorded in negative numbers in parentheses (…).

– Capital investment recovery in other units (Code 26)

This indicator is based on the total amount recovered from resale or liquidation of investments in other units during the reporting period (including receivables from sale of capital instruments from the previous period, sale of paintings, items held for price increase).

This indicator does not include proceeds from the sale of shares held for business purposes; The value of investments recovered by non-monetary assets, by debt instruments or equity instruments of other entities or not yet paid in cash.

The data to be recorded in this indicator is taken from the accounting books of Accounts 111 – Cash, Account 112 – Demand deposits, Account 113 – Cash in transit, after being compared with the accounting books of Accounts 221 – Investment in subsidiaries, Account 222 – Investment in joint ventures and associated companies, Account 228 – Other investments, Account 131 – Accounts receivable from customers in the reporting period.

– Interest income, dividends and profits received (Code 27)

This indicator is based on the amount of money collected from loan interest, term deposit interest, bond interest, dividends and profits received from capital investments in other units during the reporting period.

This indicator does not include interest, dividends received in shares or non-monetary assets, and interest from enterprises’ demand deposits at banks.

Data to be recorded in this indicator is taken from the accounting books of Account 111 – Cash, Account 112 – Demand deposits, after being compared with the accounting book of Account 515 – Financial activity revenue.

– Net cash flow from investing activities (Code 30)

The indicator “Net cash flow from investing activities” reflects the difference between the total amount of cash received and the total amount of cash spent from investing activities in the reporting period. This indicator is calculated by adding up the data of indicators with codes from Code 21 to Code 27. If the data of this indicator is negative, it is recorded in parentheses (…).

Code 30 = Code 21 + Code 22 + Code 23 + Code 24 + Code 25 + Code 26 + Code 27.

4.3. Prepare reports on cash flow indicators from financial activities

1. Establishment principles:

– Cash flows from financing activities are prepared and presented in the Cash Flow Statement separately for cash inflows and cash outflows, except for the case where cash flows are reported on a net basis as mentioned in Vietnamese Accounting Standard No. 24 – Cash Flow Statement.

– Cash flows from financing activities are prepared using the direct or modified direct method.

+ According to the direct method, cash inflows and outflows during the period from financial activities are determined by directly analyzing and synthesizing cash receipts and expenditures according to each revenue and expenditure content from the enterprise’s accounting records.

+ Under the adjusted direct method, cash inflows and outflows during the period are determined by the difference between the ending balance and the beginning balance of the items on the relevant Financial Position Statement, then adjusted for the effects of non-cash items.

+ This Circular guides the preparation of cash flow from financial activities using the direct method. In case of preparation using the adjusted direct method, enterprises shall apply the method of preparing the Consolidated Cash Flow Statement prescribed in Circular No. 202/2014/TT-BTC dated December 22, 2014 of the Ministry of Finance guiding the method of preparing and presenting the Consolidated Financial Statement and the amended, supplemented, and replaced documents (if any) for implementation.

1. Method of establishing specific indicators using the direct method (See Form No. B03-DN)

– Proceeds from issuing shares and receiving capital contributions from owners (Code 31)

This indicator is based on the total amount of money collected from the owners of the enterprise contributing capital during the reporting period. This indicator does not include loans and financial leasing debts converted into capital, undistributed profit after tax converted into capital contributions (including dividends paid in shares) or capital contributions received from owners in the form of non-cash assets.

For joint stock companies, this indicator reflects the amount collected from issuing common shares at the actual issuance price, including the amount collected from issuing preferred shares classified as equity and the option portion of convertible bonds, but excluding the amount collected from issuing preferred shares classified as liabilities.

The data to be recorded in this indicator is taken from the accounting books of Account 111 – Cash, Account 112 – Demand deposits, Account 113 – Cash in transit after being reconciled with the accounting book of Account 411 – Owner’s investment capital in the reporting period.

– Money to return capital to owners, buy back issued shares (Code 32)

This indicator is based on the total amount paid to return capital to the owners of the enterprise in the form of cash refund or repurchase of own shares in cash to cancel or use treasury shares as bonus shares in the reporting period according to the provisions of law.

This figure does not include preferred stock returns classified as liabilities, owners’ equity contributions in non-cash assets.

The data to be recorded in this indicator is taken from the accounting books of Accounts 111 – Cash, Account 112 – Demand deposits, Account 113 – Cash in transit, after being compared with the accounting books of Accounts 411 – Owner’s investment capital, Account 419 – Own shares repurchased during the reporting period. This indicator is recorded in negative numbers in the form of parentheses (…).

– Proceeds from borrowing (Code 33)

This indicator is based on the total amount of money received during the period by the enterprise from financial institutions, credit institutions and other entities during the reporting period, including loans in the form of issuing ordinary bonds or convertible bonds or issuing preferred shares classified as liabilities. This indicator also includes the amount received by the seller in the repurchase of government bonds and other securities repo transactions. This indicator does not include loans in non-monetary assets or financial leasing debts.

In case of borrowing in the form of issuing regular bonds, this indicator reflects the total amount received during the period (equal to the par value of the bond adjusted for bond issuance costs, discounts, bond premiums or prepaid bond interest – if any).

In case of borrowing in the form of issuing convertible bonds, this indicator reflects the amount corresponding to the principal debt of the convertible bonds.

In case of borrowing in the form of issuing preferred shares, this indicator reflects the total amount received during the period due to the enterprise issuing preferred shares classified as liabilities, including the condition that the issuer must repurchase the shares at a certain time in the future. In case the terms stipulate that the issuer is only obliged to repurchase shares from the holder at par value, this indicator only reflects the amount received at the par value of the preferred shares (the amount received higher than the par value has been accounted for as capital surplus presented in the indicator “Proceeds from issuing shares, receiving capital contributions from owners” (Code 31)).

In case of borrowing under the Government bond repurchase transaction, this indicator reflects the total amount received during the period from the seller in the Government bond repurchase and resale transaction and securities REPO.

Data to be recorded in this indicator is taken from the accounting books of Accounts 111 – Cash, Account 112 – Non-term deposits, Account 113 – Cash in transit, accounts payable (details of loans received to be immediately paid back to payable debts) after being compared with the accounting books of Accounts 171 – Government bond repurchase transactions, Account 3411 – Loans, Account 343 – Issued bonds, Account 41112 – Preferred shares and other related accounts in the reporting period.

– Loan principal repayment (Code 34)

This indicator is based on the total amount paid back on loan principal, including principal repayments of regular bonds, convertible bonds or preferred stocks classified as liabilities during the reporting period. This indicator also includes the amount the seller has paid back to the buyer in government bond repurchase transactions and other securities repo transactions.

This indicator does not include principal repayments in non-monetary assets or conversion of debt into equity.

The data to be recorded in this indicator is taken from the accounting books of Accounts 111 – Cash, Account 112 – Non-term deposits, accounting books of accounts receivable (the part of loan repayment from the amount of receivables), after comparing with the accounting books of Account 171 – Government bond repurchase transactions, Account 3411 – Loans, Account 343 – Issued bonds, Account 41112 – Preferred shares in the reporting period. This indicator is recorded in negative numbers in the form of parentheses (…).

– Principal repayment of financial lease (Code 35)

This indicator is based on the total amount paid for financial lease debt in the reporting period. The indicator does not include the payment of financial lease debt with non-cash assets or the conversion of financial lease debt into contributed capital.

The data to be recorded in this indicator is taken from the accounting books of Account 111 – Cash, Account 112 – Non-term deposits, Account 113 – Cash in transit, accounting books of accounts receivable (details of financial lease debt payments from receivables), after being compared with the accounting book of Account 3412 – Financial lease debt in the reporting period. This indicator is recorded in negative numbers in the form of parentheses (…).

– Dividends and profits paid to owners (Code 36)

This indicator is based on the total amount of dividends and profits paid to the owners of the enterprise (including the amount of personal income tax paid on behalf of the owners) during the reporting period.

This indicator does not include profits converted into owners’ equity, dividends paid in shares or paid in non-cash assets and profits used to set up funds.

The data to be recorded in this indicator is taken from the accounting books of Accounts 111 – Cash, Account 112 – Non-term deposits, Account 113 – Cash in transit, after being compared with the accounting books of Accounts 421 – Undistributed profit after tax, Account 332 – Dividends payable, profits (details of the amount paid in dividends and profits) in the reporting period. This indicator is recorded in negative numbers in the form of parentheses (…).

– Net cash flow from financial activities (Code 40)

The net cash flow from financial activities indicator reflects the difference between the total amount of money received and the total amount of money spent from financial activities in the reporting period. This indicator is calculated by adding up the data of indicators with codes from Code 31 to Code 36. If the data of this indicator is negative, it is recorded in parentheses (…).

Code 40 = Code 31 + Code 32 + Code 33 + Code 34 + Code 35 + Code 36.

4.4. Summary of cash flows during the period (See Form No. B03-DN)

– Net cash flow during the period (Code 50)

The “Net cash flow during the period” indicator reflects the difference between the total amount of money received and the total amount of money spent from three types of activities: Business activities, investment activities and financial activities of the enterprise during the reporting period. If this indicator is a negative number, it is recorded in parentheses (…).

Code 50 = Code 20 + Code 30 + Code 40.

– Cash and cash equivalents at the beginning of the period (Code 60)

This indicator is based on the data of the “Cash and cash equivalents” indicator at the beginning of the reporting period (Code 110, column “Beginning number” on the Financial Position Statement).

– Impact of changes in foreign exchange rates (Code 61)

This indicator is based on the total exchange rate difference due to revaluation of the ending balance of cash and cash equivalents in foreign currency and monetary gold (Code 110 of the Financial Position Statement) at the end of the accounting period.

The data to be recorded in this indicator is taken from the accounting books of Accounts 111 – Cash, Account 112 – Demand deposits, Account 113 – Cash in transit, Account 128 – Investments held to maturity and related accounts (details of items that satisfy the definition of cash equivalents), after being compared with the detailed accounting books of Account 515 – Financial activity revenue or Account 635 – Financial expenses in the reporting period. This indicator is recorded in positive numbers if there is an exchange rate gain and is recorded in negative numbers in parentheses (…) if there is an exchange rate loss.

– Cash and cash equivalents at the end of the period (Code 70)

indicator is based on the data of the “Cash and cash equivalents” indicator at the end of the reporting period (Code 110, column “Ending number” on the Financial Position Statement).

This indicator is equal to the “Total” of indicators Code 50, 60 and 61 and equal to indicator Code 110 on the Financial Status Report of that period.

Code 70 = Code 50 + Code 60 + Code 61.

1. Method of preparing and presenting Notes to Financial Statements (Form No. B09 – DN)
2. Purpose of the Notes to the Financial Statements:
3. a) The explanatory note to the Financial Statements is an inseparable part of the Enterprise Financial Statements used to describe in narrative or detailed analysis the numerical information presented in the Financial Position Statement, Business Performance Statement, Cash Flow Statement as well as other necessary information as required by specific Vietnamese Accounting Standards.
4. b) The notes to the Financial Statements may also present other information if the enterprise deems it necessary for the fair and reasonable presentation of the Financial Statements.
5. Principles of preparing and presenting the Notes to Financial Statements
6. a) When preparing the annual financial statements, enterprises must prepare the Financial Statement Explanation in accordance with the provisions of Vietnamese Accounting Standard No. 21 – Presentation of Financial Statements and the instructions in this Financial Reporting Regime.
7. b) When preparing the Interim Financial Statements (including full and summary forms), enterprises must prepare the Notes to the Selected Financial Statements according to the provisions of Vietnamese Accounting Standard No. 27 – Interim Financial Statements and the Circular guiding the standards.
8. c) The explanatory notes to the enterprise’s Financial Statements must present the following contents:

– Information on the basis of preparation and presentation of the Financial Statements and the specific accounting policies selected and applied to significant transactions and events;

– Present information as prescribed by Vietnamese Accounting Standards that has not been presented in other Financial Statements (Important information);

– Provide additional information not presented in other Financial Statements, but necessary for the fair and reasonable presentation of the financial position of the enterprise.

1. d) The Financial Statement Notes must be presented systematically. Enterprises can proactively arrange the order of numbers in the Financial Statement Notes in the most appropriate way to their own characteristics according to the principle that each item in the Financial Statements, Business Performance Reports and Cash Flow Statements must be marked to lead to related information in the Financial Statement Notes.
2. Basis for preparing the Financial Statement Explanation

– Based on the Financial Status Report, Business Performance Report, Cash Flow Report of the reporting year;

– Based on the general accounting book; detailed accounting books, cards or related detailed summary tables;

– Based on the previous year’s Financial Statements;

– Based on the actual situation of the enterprise and related documents.

4. Content and method of establishing indicators

4.1. Characteristics of business operations

In this section, the business clearly states:

1. a) Form of capital ownership: State-owned enterprise, joint stock company, limited liability company , partnership or private enterprise. For enterprises with foreign investment capital, it is necessary to clearly explain: Name of country and territory of each investor in the enterprise (including investors with Vietnamese nationality and foreign nationality) and changes in the equity structure between investors (percentage of capital contribution) at the end of the fiscal year.
2. b) Business sector: Clearly state whether it is industrial production, commercial business, services, construction or a combination of many business sectors.
3. c) Business lines: Clearly state the main business activities (The explanation of the main business activities is based on the regulations on the economic sector system of Vietnam) and the characteristics of the products produced or services provided by the enterprise.
4. d) Normal production and business cycle: In case the cycle lasts longer than 12 months, explain the average production and business cycle of the industry or sector.
5. d) Characteristics of the business’s operations in the fiscal year that affect the Financial Statements: Clearly state events related to the legal environment, market developments, characteristics of business operations, management, finance, mergers, divisions, separations, changes in scale, etc. that affect the business’s Financial Statements.
6. e) Corporate structure

– List of subsidiaries: Detailed presentation of name, address, voting rights ratio, capital contribution ratio, and interest ratio of the parent company in each subsidiary;

– List of joint ventures and associated companies: Detailed presentation of name, address, voting rights ratio, capital contribution ratio, and interest ratio of the enterprise in each joint venture and associated company;

– List of affiliated units: Show detailed name and address of each unit.

1. g) Number of employees at the end of the fiscal year or average number of employees during the fiscal year: Specify the number of employees of the enterprise at the end of the fiscal year or the average number of employees of the enterprise during the fiscal year.
2. h) Statement on the comparability of information in the Financial Statements.
3. i) Explain other information as prescribed by relevant laws.

4.2. Accounting period, currency used in accounting

1. a) The annual accounting period clearly states the annual accounting period according to the calendar year starting from January 1,… to December 31,… If the enterprise has a fiscal year different from the calendar year, clearly state the start date and end date of the annual accounting period.
2. b) Currency used in accounting: clearly state Vietnamese Dong, or another currency selected according to the provisions of the Law on Accounting.

4.3. Applicable Accounting Standards and Regimes

1. a) Applicable accounting regime: Clearly state the documents promulgating the accounting regime that the enterprise applies.
2. b) Declaration of compliance with Vietnamese Accounting Standards and Accounting Regime: Clearly state whether the Financial Statements are prepared and presented in accordance with Vietnamese Accounting Standards and Regimes or not? Financial Statements are considered to be prepared and presented in accordance with Vietnamese Accounting Standards and Regimes if the Financial Statements comply with all provisions of each standard, Circular guiding the implementation of Vietnamese Accounting Standards and the current Accounting Regime that the enterprise is applying. In case no Vietnamese Accounting Standards are applied, it must be clearly stated.

4.4. Accounting policies applied when an enterprise meets the going concern assumption

(1) Principles for converting Financial Statements prepared in foreign currencies into Vietnamese Dong: Does the application of exchange rate when converting Financial Statements comply with the instructions at Point a, Clause 3, Article 6 of this Circular?

(2) Types of exchange rates applied in accounting

– The selected exchange rate is applied when accounting for exchange rate differences arising during the period and the exchange rate when revaluing monetary items with foreign currency corners.

– Cross exchange rate for cases where the bank does not publish the foreign currency exchange rate.

– The gold purchase price announced by the State Bank or the reference purchase price of the unit licensed to trade in gold according to the law to be used when re-evaluating monetary gold at the end of the accounting period.

(3) Principles for determining the actual interest rate (also known as the effective interest rate) used to discount cash flows for items recorded at present value, amortization value, recovery value, etc. (This explanatory section only needs to be performed when the enterprise has applied interest rates to discount future cash flows):

– Basis for determining actual interest rate (market interest rate or commercial bank interest rate or interest rate applied to business loans or other basis);

– Reasons for choosing real interest rate.

(4) Principles for recording cash and cash equivalents

– Specify whether the bank deposit is term or non-term;

– Specify what types of monetary gold are included and whether they are used as inventory or not;

– State clearly on what basis cash equivalents are determined? Is it in accordance with the provisions of Vietnamese Accounting Standard No. 24 – Cash flow statement?

(5) Accounting principles for financial investments

1. a) For trading securities:

– Time of recording (for listed securities, clearly explain whether it is T+0 or another time);

– Book value is determined as fair value, original cost or other value, principles for determining fair value of trading securities;

– Basis for setting up provisions for devaluation of trading securities;

– Method of calculating cost of trading securities; change accounting policy if the enterprise changes the method of calculating cost of capital.

1. b) For investments held to maturity:

– Book value is determined as fair value, original cost or other value;

– Basis for setting up provisions for investments in other entities (details for investments held to maturity);

– Are items that meet the definition of foreign currency monetary items revalued?

1. c) For investments in subsidiaries, joint ventures and associates:

– For subsidiaries, joint ventures and associates acquired during the period, when is the initial recognition date? Is it in compliance with Vietnamese Accounting Standard No. 11 – Business consolidation for subsidiaries acquired during the period? Is it in compliance with Vietnamese Accounting Standard No. 07 – Accounting for investments in associates, Vietnamese Accounting Standard No. 08 – Financial information on capital contributions to joint ventures?

– Principles for determining subsidiaries, joint ventures and associates (based on voting rights ratio, capital contribution ratio or interest ratio);

– Is the carrying amount of an investment in a subsidiary determined by cost, fair value or other methods? Is the carrying amount of an investment in a joint venture or associate determined by cost, equity method or other methods?

– Basis for establishing provisions for investment losses in subsidiaries, joint ventures and associates; basis for determining losses based on the type of Financial Statement (Consolidated Financial Statement or Separate Financial Statement of subsidiaries, joint ventures and associates); Principles for determining the recovery value of investments in other entities in case the investments show signs of decline in value.

1. d) For investments in equity instruments of other entities:

– Is the carrying amount of an investment in another entity determined by cost or another method?

– Basis for establishing provisions for investment losses in other units; Financial statements to determine losses (Consolidated financial statements or separate financial statements of the invested unit);

1. d) Accounting methods for other transactions related to financial investments:

– Stock swap transactions;

– Investment transactions in the form of capital contribution;

– Transaction in the form of repurchase of capital contribution;

– Accounting method for stock dividends.

(6) Principles of accounting for receivables

– Criteria for classifying receivables (customer receivables, other receivables, internal receivables);

– Is it tracked in detail by principal maturity, remaining maturity at the reporting time, by original currency and by each entity?

– Are receivables revalued to meet the definition of foreign currency monetary items? What is the exchange rate used for revaluation?

– Is there a record of receivables not exceeding the recoverable amount?

– Principles and methods of setting aside provisions for doubtful debts.

(7) Principles of inventory accounting

– Inventory recognition principles: Clearly state whether inventories are recorded at original cost or at net realizable value.

– Method of calculating inventory value: Clearly state which method the business applies (Weighted average; first in, first out; actual price; retail price method;…).

– Inventory accounting method: Specify whether the enterprise calculates the value of goods sold at each time they arise or calculates the value of goods sold at the end of the period based on the value of inventory.

– Method of setting up inventory price reduction reserve: Specify that the enterprise sets up inventory price reduction reserve based on the larger difference between the original price and the net realizable value of the inventory. Is the net realizable value of the inventory determined in accordance with the provisions of Vietnamese Accounting Standard No. 02 – Inventories? The method of setting up inventory price reduction reserve is to set up based on the difference between the amount of reserve that must be set up this year and the amount of reserve that was set up last year but not fully used, leading to the need to set up more or reverse this year.

– Raw material and material allocation criteria.

– Accounting policies relating to inventories for high risk contracts.

(8) Principles of accounting and depreciation of tangible fixed assets (including perennial plants for periodic products, working animals), intangible fixed assets, financial leased fixed assets, investment real estate

1. a) Accounting principles for tangible and intangible fixed assets

– Clearly state whether the book value of fixed assets is at original cost or revaluation price;

– Accounting principles for expenses arising after initial recording (regular repair and maintenance costs; periodic repair and maintenance; upgrades and renovations) are recorded in book value or production and business costs;

– Clearly state the methods of depreciation of fixed assets; the amount to be depreciated is calculated based on original cost or depreciated value;

– Are other regulations on management, use and depreciation of fixed assets complied with?

1. b) Accounting principles for financial leased fixed assets:

– State how the carrying amount is determined;

– Clearly state the methods of depreciation of financial leased fixed assets.

1. c) Accounting principles for investment real estate.

– How is the book value of investment real estate recorded?

– Clearly state the methods of depreciation of investment real estate.

(9) Principles of accounting for biological assets

– Livestock for periodic production;

– Livestock for one-time product collection;

– Seasonal crops or one-time production.

(10) Accounting principles for business cooperation contracts

– Is the nature of the BCC contract joint control or non-joint control? Product or profit sharing? What are the rights and obligations of the enterprise related to the BCC contract?…

– For the capital contributor

+ How are capital contributions (in cash or non-cash assets) to BCC recorded?

+ How are revenue and costs related to contracts recorded?

– For the capital recipient (the party that performs the operations and incurs common costs)

+ Principles of recording capital contributions of other parties;

+ Principles of revenue, cost and product division of the contract.

(11) Principles of accounting for costs awaiting allocation

– Clearly state which expenses are being gradually allocated to production and business costs?

– Method and time for allocating pending costs;

– Is there detailed tracking of pending costs allocated by period?

(12) Accounting principles for payables to vendors

– How to classify payables?

– Is it possible to track the details of payables by principal repayment period, remaining period at the reporting time, by original currency and by each subject?

– Are the liabilities revalued to meet the definition of foreign currency monetary items? What is the exchange rate used for revaluation?

– Is the liability recorded as lower than the obligation to pay?

(13) Accounting principles for dividends and profits

– Time of recording dividend and profit payable;

– Commitment period to pay dividends and profits to business owners;

– Payment status of dividends and committed profits;

– Are the dividends and profits payable during the period related to the distribution from the profits of any fiscal year?

(14) Principles for recording payable expenses:

– Specify which expenses are estimated to be recorded in production and business costs during the period?

– The basis for determining the value of those expenses.

(15) Principles for recording revenue awaiting allocation

– In what cases does revenue arise pending allocation?

– Method of allocating pending revenue.

(16) Accounting principles for payable provisions:

– Principles for recording provisions for payables: Clearly state whether the recorded provisions for payables satisfy the conditions specified in Vietnamese Accounting Standard No. 18 – Provisions, assets and contingent liabilities.

– Method of recording provisions for payables:

+ Basis for setting up provisions for payables

+ Specify the additional provisions for payables (or reversals) based on the larger (or smaller) difference between the amount of provisions for payables to be established this year and the amount of provisions for payables established last year that have not been used and are recorded in the accounting books.

(17) Accounting principles for deferred corporate income tax

1. a) Accounting principles for deferred income tax assets

– Basis for recording deferred income tax assets (temporary deductible differences, tax losses or unused tax incentives);

– Tax rate (%) used to determine the value of deferred income tax assets;

– Is there an offset against deferred income tax payable?

– Is the likelihood of future taxable income determined when a deferred tax asset is recognized? Are unrecognized deferred tax assets revalued?

1. b) Accounting principles for deferred corporate income tax payable

– Basis for recording deferred income tax payable (temporary difference – taxable);

– Tax rate (%) used to determine the value of deferred income tax payable;

– Is there an offset against deferred income tax assets?

(18) Principles for recording loans and financial lease debts

– How are loan and finance lease values recorded?

– Is there tracking by object, term, and currency?

– Are foreign currency loans and finance leases revalued?

(19) Principles for recording and capitalizing borrowing costs:

– Principle of recording borrowing costs: Clearly state that borrowing costs are recorded in production and business expenses in the period when incurred, unless capitalized according to the provisions of Vietnamese Accounting Standard No. 16 – Borrowing costs.

– Capitalization rate used to determine the borrowing costs capitalized during the period: Specify what this capitalization rate is (This capitalization rate is determined according to the calculation formula prescribed in the Circular guiding accounting for Vietnamese Accounting Standards No. 16 – Borrowing costs.

(20) Principles for recording convertible bonds

– Basis for determining debt and equity components of convertible bonds.

– Recording the debt and equity components separately and the time of handling the debt and equity components of convertible bonds.

– What interest rate is used to discount cash flows?

(21) Principles of recording equity:

– Is the owner’s capital contribution recorded at the actual capital contribution? How is capital surplus recorded? How is the convertible bond option determined?

– Reasons for recording the difference in asset revaluation and exchange rate difference?

– How are undistributed profits determined? Principles for distributing profits and dividends.

(22) Principles and methods of recording revenue and other income:

– Sales and service revenue: Is the principle of revenue recognition in accordance with performance obligations complied with? What methods are used to record revenue?

+ Sales revenue and service provision.

+ Construction contract revenue;

+ Revenue from sales of investment real estate: Does it comply with Vietnamese Accounting Standard No. 05 – Investment real estate? Method of recording profits/losses arising from the sale of real estate.

+ Revenue from sales of real estate such as tourist apartments, office apartments combined with accommodation or similar products: Content, characteristics and nature of the contract on the rights and obligations of the parties; which accounting policies are used to record revenue,…

– Methods of recording financial revenue.

– Other income recognition principles.

(23) Accounting principles for revenue deductions

– What are the revenue deductions?

– Is the Accounting Standard “Events occurring after the end of the accounting period” complied with to adjust revenue?

(24) Principles of accounting for cost of goods sold

– What are the write-downs of cost of goods sold?

– Is the principle of revenue matching costs guaranteed?

– Is the principle of prudence ensured, immediately recording costs exceeding the normal level of inventories?

– How are inventory losses and damages recorded?

– Principles for recording inventory price reduction provisions.

(25) Principles and methods of recording financial expenses:

– What items are included in financial costs?

– Principles for recording interest expenses on loans used for production and business;

– Principles for accounting for exchange rate difference losses when they arise and re-evaluating foreign currency items of the reporting period.

(26) Principles of accounting for sales costs and business management costs

– Are all selling expenses and administrative expenses incurred during the period fully recorded?

– What are the adjustments for reducing selling expenses and administrative expenses?

– Principles for recording provisions for business restructuring, provisions for bad debts, provisions for product, goods and construction warranty.

(27) Accounting principles for sale and liquidation of fixed assets and investment real estate

(28) Principles and methods of recording current corporate income tax expenses and deferred corporate income tax expenses:

Current corporate income tax expense includes current corporate income tax expense under the provisions of the Corporate Income Tax Law and additional corporate income tax expense under the global minimum tax provisions.

+ Current corporate income tax expense according to the provisions of the Law on Corporate Income Tax is the amount of corporate income tax payable calculated on taxable income in the year and the current corporate income tax rate.

+ Additional corporate income tax expense under the global minimum tax regulations is the amount of corporate income tax that an enterprise must pay additionally to the state budget, determined according to the provisions of the law on global minimum tax.

Deferred corporate income tax expense is determined based on the deductible temporary difference, taxable temporary difference and corporate income tax rate. Current corporate income tax expense is not offset against deferred corporate income tax expense.

(29) Other accounting principles and methods: Specify other accounting principles and methods with the purpose of helping users understand that the enterprise’s Financial Statements have been presented on the basis of compliance with the enterprise accounting standards and regimes issued by the Ministry of Finance.

4.5. Accounting policies applied when an enterprise does not meet the going concern assumption

1. a) Cases where an enterprise is considered to not meet the going concern assumption.
2. b) Policy to reclassify long-term assets and liabilities into short-term when the enterprise does not meet the going concern assumption.
3. c) Principles for determining the value of items and presenting them on the Financial Position Statement for:

– Financial investments;

– Accounts receivable;

– Payables;

– Inventory;

– Biological assets;

– Fixed assets, Investment real estate;

– Other assets and liabilities.

4.6. Additional information for items presented in the Statement of Financial Position

– In this section, the enterprise must present and analyze in detail the figures presented in the Financial Position Statement to help users of the Financial Statements better understand the content of the items of assets, liabilities and equity.

– The unit of measurement of the value presented in the section “Additional information for items presented in the Financial Statement” is the unit of measurement used in the Financial Statement, the data recorded in the “Beginning of the year” column is taken from the “End of the year” column in the previous year’s Financial Statement Notes, the data recorded in the “End of the year” column is prepared based on data taken from:

+ Report on financial situation this year;

+ General accounting book;

+ Detailed accounting books or related detailed summary tables.

– Enterprises are proactive in numbering the detailed information presented in this section according to the principle of not changing the indexes from the Financial Status Report and ensuring easy reconciliation and comparability between periods.

– In case an enterprise retroactively applies changes in accounting policies or retroactively adjusts material errors of previous years, it must adjust the comparative figures (figures in the “Beginning of the Year” column) to ensure the principle of comparability and clearly explain this. In case for some reason the figures in the “Beginning of the Year” column cannot be compared with the figures in the “End of the Year” column, the reason must be clearly stated in the Notes to the Financial Statements.

– For items requiring explanation at fair value, if the fair value cannot be determined, the reason must be clearly stated.

4.7. Additional information for items presented in the Income Statement.

– In this section, the enterprise must present and analyze in detail the figures shown in the Business Performance Report to help users of the Financial Report better understand the content of revenue and expense items.

– The unit of measurement of the value presented in the section “Additional information for items presented in the Business Performance Report” is the unit of measurement used in the Business Performance Report, the data recorded in the column “Previous year” is taken from the previous year’s Financial Statement Notes, the data recorded in the column “This year” is prepared based on data taken from:

+ Report on business performance this year;

+ General accounting book;

+ Detailed accounting books or related detailed summary tables.

– Enterprises can proactively number the detailed information presented in this section in accordance with the number of indicators from the Business Performance Report to ensure easy comparison and comparability between periods.

– In case for some reason the figures in the “Previous year” column cannot be compared with the figures in the “This year” column, this must be clearly stated in the Notes to the Financial Statements.

4.8. Additional information for the Cash Flow Statement

– In this section, the enterprise must present and analyze the figures shown in the Cash Flow Statement to help users better understand the factors affecting the enterprise’s cash flow during the period.

– In case during the period the enterprise purchases or liquidates investments in subsidiaries or other business units, these cash flows must be presented as separate items in the Cash Flow Statement. This section must provide detailed information related to the purchase or liquidation of investments in subsidiaries or other business units.

– The unit of measurement of the value presented in the section “Additional information for items presented in the Cash Flow Statement ” is the unit of measurement used in the Cash Flow Statement. The data recorded in the column “Previous year” is taken from the Financial Statement Explanation of the previous year; the data recorded in the column “This year” is prepared based on data taken from:

+ Cash flow statement this year;

+ General accounting book;

+ Detailed accounting books or related detailed summary tables.

4.9. Other information

– In this section, the enterprise must present other important information (if any) in addition to the information presented in the above sections to provide descriptive information in words or figures according to the provisions of specific Vietnamese Accounting Standards to help users understand that the enterprise’s Financial Statements have been presented honestly and reasonably.

– When presenting explanatory information in this section, depending on the requirements and information characteristics as prescribed from points 1 to 7 of this section, enterprises can provide appropriate detailed and specific forms and necessary comparative information.

– In addition to the information that must be presented according to the provisions from section 4.1 to section 4.8, enterprises may present additional information if deemed necessary for users of the enterprise’s Financial Statements.