THE
MINISTRY OF FINANCE
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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No:
23/1999/TT-BTC
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Hanoi,
February 26, 1999
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CIRCULAR
GUIDING THE
ELABORATION AND EXAMINATION OF 1998 FINANCIAL REPORTS OF STATE ENTERPRISES
The Ministry of Finance issued Decision
No.1141/TC/QD/CDKT of November 1, 1995 on the enterprise accountancy regime,
Circular No.73/TC/TCDN of November 12, 1996, guiding the elaboration, publicity
and examination of financial reports and accountancy examination by the State
enterprises. In principle, State enterprises shall have to comply with the
above-said documents.
To conform to the practical situation, the
Ministry of Finance guides the amendments and supplements to a number of points
in the financial report elaboration and examination applied in 1998 as follows:
1. Regarding fixed asset depreciation
1.1. Those enterprises which have registered the
fixed assets use duration with the agencies managing the State capital and
property at enterprises or which have been allowed by the Ministry of Finance
to make depreciation beyond the time frame prescribed in Decision
No.1062/TC/QD/CSTC of November 14, 1996 of the Ministry of Finance shall comply
with the registered or approved levels.
1.2. The fixed assets which have been newly
invested or procured in the year and have not yet been registered in term of
their use duration with the agencies managing the State capital and property at
enterprises, shall be depreciated for 1998 within the use-time frame prescribed
in the above-said decision.
1.3. Where enterprises increase or reduce the
fixed asset depreciation levels not according to the registered or approved
duration in order to create sources for investment loan payment (or for loss
reduction), the amortization shall be dealt with as follows:
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- They shall be entitled to readjust the
depreciation level which, however, must not be lower than the maximum use
duration within the prescribed depreciation bracket and must not exceed the
arising loss amount. This means that the enterprises must not reduce the
depreciation level to create quasi profits while being unable to recover the
investment capital.
The concerned enterprises shall notify the
depreciation increase or reduction to the Department for Management of State
Capital and Property at Enterprises as well as the Tax Department for
monitoring.
All cases of depreciation increase or reduction
beyond the bracket prescribed in Decision No.1062/TC/QD-CSTC must be agreed
upon by the Ministry of Finance.
2. Regarding salary and wages
The settlement of salary and wage fund accounted
into expenditures shall comply with Decree No.28/CP of March 28, 1997 of the
Government; Circular No.13/LDTBXH-TT of April 10, 1997 of the Ministry of
Labor, War Invalids and Social Affairs guiding the methods of setting the wage
unit prices and managing wages and income in the State enterprises; Joint
Circular No.18/1998/TTLT-BLDTBXH-BTC of December 31, 1998 of the Ministry of
Labor, War Invalids and Social Affairs and the Ministry of Finance providing
handling guidance when enterprises have failed to meet their budget remittance
and profit norms; Decision No.1069/1998/QD-LDTBXH of October 14, 1998 of the
Ministry of Labor, War Invalids and Social Affairs promulgating the 1998
average wage levels of the State enterprises assigned the wage unit prices.
3. The accounting exchange rate and handling of
rate differences
Foreign currency(ies) generated from economic
operations shall be converted into Vietnam Dong according to the current
regulations.
The handling of the exchange rate differences
shall, in principle, comply with the provisions of Circular No.44/TC/TCDN of
July 8, 1997 of the Ministry of Finance. Where the whole amount of exchange
rate difference resulting from the reassessment of the year-end balance of
long-term debts paid in foreign currency(ies) is accounted into 1998
expenditure and loss is caused, the enterprises shall be entitled to carry
forward part of exchange rate difference corresponding to the loss amount
arising in 1998 to the subsequent year. The handling of exchange rate
difference shall be effected after the depreciation reduction is made according
to Point 1.3 above. The particular cases shall be handled according to the
Ministry of Finance’s
written approvals.
4. Profits subject to surtax
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5. Making and submission of financial reports
The independent State enterprises, the
independent cost-accounting member enterprises of corporations and centralized
cost-accounting sections of the State Corporations shall make and submit their
financial reports to the State bodies according to the provisions of Decision
No.1141-TC/QD/CDKT of January 1st, 1995 of the Ministry of Finance.
The State Corporations shall synthesize and
submit their entire-corporation financial reports to the following bodies:
- The General Department for Management of State
Capital and Property at Enterprises;
- The General Department of Tax;
- The agencies having decided the establishment
of enterprises.
For corporations established by decisions of
provincial/municipal People’s
Committees under the Government’s
authorization and the centralized cost-accounting corporations, their annual
financial reports shall also be sent to the provincial/municipal Department for
Management of State Capital and Property at Enterprises in the localities where
the corporations are headquartered for summing up the financial reports
according to provinces and cities.
The sum-up reports of the State corporations
shall comply with the set form prescribed in Decision No.1141/TC/QD/CDKT, but
the number of enterprises having suffered from losses and their total loss
amount and the number of profitable enterprises and their total profit amount
must be counted separately (without loss-profit offsetting between the two).
The dependent cost-accounting enterprises, when
submitting their financial reports to their superiors, shall also send them to
the provincial/municipal Department for Management of State Capital and
Property at Enterprises and Tax Department in the localities where the
enterprises are headquartered.
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Enterprises that have delayed the submission of
their financial reports shall be administratively sanctioned according to the
provisions at Point b, Clause 3, Article 2 of Decree No.22/CP of April 17,1996
of the Government and Point 1.4, Item II of Circular No.45/TC/TCT of August
1st, 1996 of the Ministry of Finance.
The general directors (directors) and chief
accountants of enterprises shall be answerable before the State and law for the
accuracy and truthfulness of data in the financial reports of enterprises.
6. Examination of enterprises’ financial reports
6.1. Examination of financial reports
The examination of financial reports of
enterprises shall comply with Decree No.61/1998/ND-CP of August 15,1998 of the
Government on inspection and examination of enterprises and Decision
No.1840/1998/QD-BTC of December 15,1998 of the Minister of Finance promulgating
the regulation on overcoming the overlapping in enterprise inspection and
examination by various inspection and examination bodies of the Ministry of
Finance.
Basing themselves on the financial reports made
by enterprises, the agencies managing the State capital and property at
enterprises shall check the capital preservation and development, business
results and debt payment capability of the State enterprises; consider the
distribution and use of after-tax profits; the establishment and use of funds
at enterprises according to the current regulations.
Depending on enterprises’ financial capability and activities, the
examination may be made comprehen-sively or partially according to matters for
a number of key independent State enterprises.
Upon the completion of examination, a written
conclusion on the examined contents must be made. The direct examiner shall
have to sign such record and be responsible for the examined data.
For State enterprises meeting with serious
financial problems and having no conditions to organize the examination, the
agencies managing the State capital and property at enterprises may propose the
financial inspectorate to conduct the inspection or request an independent
auditing organization to examine the financial reports of the enterprises. The
auditing costs shall be accounted into the expenses for management of
enterprises. The independent auditing organizations shall take responsibility
before law for the audited data.
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6.2. Synthesizing and evaluating financial
reports of enterprises
Basing themselves on enterprises’ financial reports, the agencies
managing the State capital and property at enterprises shall have to evaluate,
analyze and synthesize the business efficiency; the level of State capital
preservation and debt payment capability; the distribution and use of after-tax
profits; the establishment and use of funds by all State enterprises.
The provincial/municipal Departments for
Management of State Capital and Property at Enterprises shall have to
synthesize and evaluate the financial reports of all State enterprises under
their management in their respective localities.
The General Department for Management of State
Capital and Property at Enterprises shall have to synthesize and evaluate the
financial reports according to the economic branches (industry, construction,
agriculture and rural development, communication and transport, trade,
tourism...) and of State Corporations (Corporations 90, Corporations 91)
established by the Prime Minister or ministries.
When making evaluation and synthesis, it is
necessary to clearly distinguish:
- The enterprises operating with profits, the
total profit amount; the loss-suffering enterprises and their total loss amount
(without making loss-profit offsetting between the two). The ratio of profit to
State capital (the ownership capital)
- The enterprises which have preserved and
developed the capital and the enterprises which have not preserved the capital.
The total amount of capital lost through business activities, accumulated
losses, property devaluation, bad debts, expenses that cannot be offset by any
sources, irrecoverable investment amounts and other loss amounts.
- Debts: tax debts, debts owed to domestic and
foreign banks, to investors, customers and the laborers, and other debts.
Particularly, the debt repayment capability and causes of non-payment of debts
shall be assessed.
The provincial/municipal Departments for
Management of State Capital and Property shall make sum-up reports with
economic branch-based analysis and send them to the Ministry of Finance (The
General Department for Management of State Capital and Property at
Enterprises), the provincial/municipal Finance Services as well as People’s Committees. The branch-based
evaluation reports shall be sent to concerned provincial/municipal
branch-managing Services in the localities before May 31, 1999.
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The reports on the sum-up evaluation of the
financial reports of the State enterprises throughout the country shall be
submitted to the Minister of Finance before June 30, 1999.
The provincial/municipal Departments for
Management of State Capital and Property at Enterprises shall continue
classifying enterprises for 1998 according to Directive No.868/1998/CT/BTC of
March 26, 1998 of the Minister of Finance. The enterprises which do business
with efficiency must be the enterprises which earn business profits for three
or more years in a row.
7. This Circular applies to the elaboration,
examination and handling of 1998 financial reports of the State enterprises.
If any problems arise in the course of
implementation, the agencies and enterprises are requested to promptly report
them to the Ministry of Finance for study and settlement.
THE MINISTRY OF FINANCE
Tran Van Ta