With respect to provisions for devaluation of goods in stock:
- Subjects of provisions comprise raw materials, substances, tools, instruments, goods, purchased goods in transit, goods on consignment, goods stored in tax-suspension warehouses and finished products, whose original costs recorded in accounting books are greater than the realizable net values and which meet the following requirements:
+ Legal invoices and evidencing documents must be available under regulations of the Ministry of Finance or other appropriate proof of the original costs of goods in stock must be available instead.
+ Those goods are under the ownership of an enterprise at the time of annual financial reporting.
- The amount of provision will be calculated according to the following formula:
Amount of provision = Actual quantity of goods in stock determined at the time of annual financial reporting X (Original cost of total goods in stock – Realizable net value of total goods in stock)
For more details, please read the Circular No. 48/2019/TT-BTC which is set to enter into force on October 10, 2019 and applies in the fiscal year of 2019.
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