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THE MINISTRY OF FINANCE
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No:
120/1999/TT-BTC
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Hanoi, October 7, 1999
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CIRCULAR
GUIDING THE AMENDMENTS AND SUPPLEMENTS TO THE
ENTERPRISE ACCOUNTING REGIME
In order to ensure the compatibility between
the enterprise accounting regime and the financial mechanism of the State
enterprises promulgated together with Decree No.59/CP, the Ministry of Finance
issued on March 20, 1997 Circular No.10-TC/CDKT, having guided the amendments
and supplements to the enterprise accounting regime;
Pursuant to the Government’s
Decree No.30/1998/ND-CP of May 13, 1998 detailing the implementation of the
Enterprise Income Tax Law;
Pursuant to the Government’s
Decree No.27/1999/ND-CP of April 20, 1999 amending and supplementing the
Regulation on financial management and business cost-accounting at State
enterprises promulgated together with Decree No.59/CP, the Ministry of Finance
hereby guides the amendments and supplements to a number of points in the
enterprise accounting regime as follows:
I.
GUIDANCE ON AMENDMENTS AND SUPPLEMENTS TO THE ENTERPRISE ACCOUNTING REGIME
1. In cases where the expenses deducted in
advance for overhauls of fixed assets, warranty for products and goods,... are
larger than the actually paid amounts, the difference therebetween shall be
written as follows:
Debit: Account 335 - Payable expenses
...
...
...
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2. Revenues from the payment discount in cases
where the payments for the purchased goods are made ahead of payment deadlines
and accepted by the seller shall be written as follows:
Debit: Account 111- Cash
Debit: Account 331 - To be paid to the seller
Credit: Account 711 - Income from financial
operations
3. For the asset leasing activities with rentals
received in advance for many years, the turnover of each year shall be the
total rental amount divided by the number of years of asset lease. When
receiving rental money paid in advance by the lessees for many accounting
periods or years, the following shall be written:
a/ For units that calculate payable value added
tax (VAT) by the tax deduction method:
- When receiving money paid in advance by the
lessees for the leased assets, the accountants shall reflect the turnover
generated in advance onto the credit side of Account 3387 at the price without
VAT:
Debit: Accounts 111, 112,... (Total amount
received in advance).
Credit: Account 3387 - Turnover received in
advance (at the price without VAT).
...
...
...
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And at the same time, the accountants shall
calculate and carry forward the turnover of the accounting period, writing:
Debit: Account 3387 - Turnover generated in
advance
Credit: Account 511 - Sale turnover
- In the next accounting period, the accountants
shall calculate and carry forward the turnover of such accounting period,
writing:
Debit: Account 3387 - Turnover received in
advance
Credit: Account 511 - Sale turnover
- The money amounts that must be refunded to the
clients due to the non-performance of contracts for asset lease service supply
shall be written as follows:
Debit: Account 3387 - Turnover received in
advance (at the price without VAT).
Debit: Account 531 - Sold goods that are
returned (in cases where the turnover in the period has already been recorded -
at the price without VAT).
...
...
...
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Credit: Accounts 111, 112, 3388,... (total
refunded amount).
b/ For units that calculate payable VAT by the
direct method:
- When receiving money paid in advance by
lessees for the leased assets, the accountants shall reflect the turnover
received in advance onto the credit side of Account 3387 according to the total
amount received in advance, writing:
Debit: Accounts 111, 112,... (Total amount
received in advance).
Credit: Account 3387 - Turnover received in
advance (According to the total amount received in advance).
And at the same time, the accountants shall
calculate and carry forward the turnover of the accounting period, writing:
Debit: Account 3387 - Turnover received in
advance.
Credit: Account 511 - Sale turnover.
- In the next accounting period, the accountants
shall calculate and carry forward the turnover of such accounting period,
writing:
...
...
...
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Credit: Account 511 - Sale turnover.
- The accountant shall reflect the payable VAT
amount by the direct method, writing:
Debit: Account 642 - Enterprise management
expenses (6425)
Credit: Account 3331 - Payable VAT (33311).
- The money amounts that must be refunded to the
lessees due to the non-performance of contracts for asset lease service supply
shall be written as follows:
Debit: Account 3387 - Turnover generated in
advance.
Debit: Account 531 - Sold goods that are
returned (in cases where turnover in the period has already been recorded).
Credit: Accounts 111, 112,... (total refunded
amount).
And at the same time, the accountants shall
reflect the reimbursed VAT amount corresponding to the value of asset lease
service that has not been provided, writing:
...
...
...
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Credit: Account 721 - Irregular incomes, or
Credit: Account 642 - Enterprise management
expenses (if the taxes have not been carried forward).
c/ When remitting enterprise income tax for the
asset lease activities with rentals collected in advance into the State budget,
the accountant shall write:
Debit: Account 3334 - Enterprise income tax
Credit: Accounts 111, 112,...
d/ For the asset leasing activities with rentals
received in advance for many years, besides following the accounting processes
prescribed above, the accountants shall also have to open detailed accounting
books for monitoring the turnover received in advance and expenditures
temporarily calculated for determining the payable enterprise income tax amount
(including the expenses for leased asset depreciation, other expenses
corresponding to the time and money amount received in advance and reserve
amount equal to 5% of the total above-said expenditures). And at the same time,
they shall have to make final settlement of leasing expenses actually arising
as compared with the annual temporarily calculated expenses, for the purpose of
determining and settling the annual income tax amount to be paid annually and
toward the end of the lease term.
4. When products and goods subject to the VAT by
the tax deduction method are delivered and used for donations and/or gifts, the
accountants shall write:
a/ If donations and/or gifts are given in
service of production and business activities that are liable to VAT by the tax
deduction method, such as donations and gifts to delegates participating in the
customers’ congress or employees�
conferences, the accountants shall reflect the turnover of products and goods
given as donations and/or gifts at the selling prices without VAT, writing:
Debit: Account 641 - Sale expenses
...
...
...
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Credit: Account 512 - Internal goods sale
turnover
And at the same time, the accountants shall
reflect the payable VAT amount eligible for deduction, writing:
Debit: Account 133 - Deductible VAT
Credit: Account 3331 - Payable VAT
b/ If donations and/or gifts are given in
service of production and business activities that are liable to VAT by the
direct method or not liable to VAT, such as donations and gifts to delegates
participating in the customers’ conferences or employees’
congress, the accountants shall reflect the product turnover at the selling
prices without VAT and the payable output VAT ineligible for deduction,
writing:
Debit: Account 641 - Sale expenses
Debit: Account 642 - Enterprise management
expenses
Credit: Account 3331 - Payable VAT
Credit: Account 512 - Internal goods sale
turnover
...
...
...
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Debit: Account 431 - Reward and welfare funds
Credit: Account 3331 - Payable VAT
Credit: Account 512 - Internal goods sale
turnover.
5. For products and goods liable to VAT by the
direct method or not liable to VAT, when being delivered as donations and/or
gifts, the accountants shall reflect the sale turnover at the payment price
(with VAT), writing:
Debit: Accounts 641, 642, 431
Credit: Account 512 - Internal goods sale
turnover.
6. Shift meal allowances to be paid to laborers
taking part in the enterprises� business activities shall be
written as follows:
Debit: Accounts 622, 627, 641, 642,...
Credit: Account 334 - To be paid to employees.
...
...
...
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Debit: Account 334 - To be paid to employees
Credit: Accounts 111, 112,...
7. Expenses for payable loan interests shall be
written as follows:
Debit: Account 811 - Financial operation
expenses
Credit: Accounts 111, 112,...
In cases where the amounts of interests on loans
for capital construction must be paid while the projects are not yet completed
and put to use, they shall be accounted into the capital construction
investment expenses, writing:
Debit: Account 241 - Unfinished capital
construction
Credit: Accounts 111, 112, 341,...
8. When the severance allowance for laborers,
expenses for scientific research, research for technological renewal,
innovations, training for raising of workers’
professional skills, environmental protection and for female laborers,...
arise, they shall be written as follows:
...
...
...
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Debit: Account 642 - Enterprise management
expenses
Debit: Account 133 - Deductible VAT (if any)
Credit: Accounts 111, 112, 331,...
b/ For units that calculate payable VAT by the
direct method or not liable to VAT, when the above-said expenses arise, the
accountants shall base themselves on the vouchers and invoices to reflect them
into the enterprise management expenses according to payment price and the
input VAT ineligible for deduction, writing:
Debit: Account 642 - Enterprise management
expenses
Credit: Accounts 111, 112, 331,...
9. Expenses for discount paid to the goods
and/or service purchasers when they make payments therefor in advance shall be
written as follows:
Debit: Account 811 - Financial operation
expenses
Credit: Accounts 131, 111, 112, ...
...
...
...
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1. This Circular shall apply to enterprises of
all branches and economic sectors and takes effect as from the effective date
of the Government’s Decree No.27/1999/ND-CP of
April 20, 1999. The previous guidance of the Ministry of Finance on the
enterprise accounting regime, which are contrary to this Circular’s
provisions, are now annulled.
2. Any problems arising in the course of
implementation shall be reported by the concerned units to the Ministry of
Finance for study and solution.
FOR THE MINISTER OF FINANCE
VICE MINISTER
Pham Van Trong