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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: 89/2002/TT-BTC
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Hanoi, October 09, 2002
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CIRCULAR
GUIDING THE
ACCOUNTING IN IMPLEMENTATION OF FOUR (04) ACCOUNTING STANDARDS ISSUED TOGETHER
WITH THE FINANCE MINISTER’S DECISION No. 149/2001/QD-BTC OF DECEMBER 31, 2001
Pursuant to the
Finance Minister’s Decision No.
149/2001/QD-BTC of December 31, 2001, issuing and announcing four (04)
Vietnamese accounting standards (phase 1);
Pursuant to the Enterprise Accounting Regime issued together with the Finance
Ministry’s Decision No.
1141/TC/QD-CDKT of November 1, 1995 and circulars guiding the amendments and
supplements thereto;
The Ministry of Finance hereby guides the accounting in implementation of the
above-mentioned four accounting standards for application to enterprises of all
branches and economic sectors nationwide, excluding enterprises applying the
Small-and Medium-Sized Enterprise Accounting Regime issued together with the
Finance Minister’s Decision No.
1177/TC/QD-CDKT of December 23, 1996 and Decision No. 144/2001/QD-BTC of
December 21, 2001.
I.
GUIDANCE ON ACCOUNTING OF THE STANDARD "INVENTORY"
1. Accounting of
fixed general production costs
- When fixed general
production costs are incurred, record:
Debit in Account 627
- General production costs (Details of fixed general production costs)
Credit in Accounts:
152, 153, 214, 331, 334�
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Debit in Account 154
- Incomplete production and business costs
Credit in Account 627
- General production costs (Details of fixed general production costs).
- Where the quantity
of actually-manufactured products is lower than the normal capacity,
accountants must calculate and determine fixed general production costs
allocated to the processing cost of each product unit according to the normal
capacity level. Unallocated fixed general production costs (the positive
difference between the total fixed general production costs that are actually
incurred and the fixed general production costs calculated into product price
is not calculated into the product price) shall be recognized into the cost of
goods sold in the period, record:
Debit in Account 632
- Cost of goods sold (Details of unallocated fixed general production costs)
Credit in Account 627
- General production costs
2. Accounting of
inventory losses
- On the basis of the
reports on inventory losses, accountants shall reflect the value of inventory
losses, and record:
Debit in Account 1381
- Deficit assets to be handled
Credit in Accounts:
151, 152, 153, 154, 155 and 156.
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Debit in Accounts
111, 334� (Compensations to be
paid by organizations and/or individuals)
Debit in Account 632
- Cost of goods sold (inventory losses minus compensations paid by
organizations and/or individuals at fault, which have been reflected in the
cost of goods sold)
Credit in Account
1381 - Deficit assets to be handled.
3. Accounting of the
inventory price decrease reserve
At the end of the
annual accounting period, when the net realizable value of inventory is smaller
than their original price, an inventory price decrease reserve must be set up.
The inventory price decrease reserve to be set up shall be equal to the difference
between the higher original price and the net realizable price of inventory.
- Where the inventory
price decrease reserve to be set up at the end of the current year’s accounting period
is bigger than the inventory price decrease reserve already set up at the end
of the previous year’s accounting period,
the bigger difference shall be added, record:
Debit in Account 632
- Cost of goods sold (Detailed inventory price decrease reserve)
Credit in Account 159
- Inventory price decrease reserve.
- Where the inventory
price decrease reserve to be set up at the end of the current year’s accounting period
is smaller than the inventory price decrease reserve already set up at the end
of the previous year’s accounting period,
the smaller difference shall be re-included, record:
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Credit in Account
632: Cost of goods sold (Details of the inventory price decrease reserve).
II.
GUIDANCE ON ACCOUNTING OF THE STANDARD "TANGIBLE FIXED ASSETS"
1. Regarding the content
of reflection of Account 211 - Tangible fixed assets, the section on the
historical cost of tangible fixed assets shall be revised on a case-by-case
basis as follows:
Procured tangible
fixed assets:
The historical cost of tangible fixed assets consists of the buying price
(minus trade discounts and price reductions), taxes (excluding refunded taxes)
and expenses directly related to the putting of assets into the ready-for-use
state, such as ground preparation expense, initial transportation, loading and
unloading expense, installation and trial operation expenses (after subtracting
(-) amounts recovered from products and/or discarded materials from trial
operation), expenses for experts and other direct related expenses.
Tangible fixed assets
formed from capital construction investment by the contracting mode: For tangible fixed
assets formed from construction investment by the contracting mode, their
historical cost is the settlement prices of construction investment works,
other direct related expenses and registration fee (if any).
Tangible fixed assets
procured on deferred payment: Where tangible fixed assets are procured by the mode of
deferred payment, their historical cost shall be reflected according to the
buying price paid at the buying time. The difference between the buying price
to be paid later and the spot buying price shall be accounted into expenses
according to the payment period, unless such difference is calculated into the
historical cost of tangible fixed assets (capitalization) according to the
provisions of the Standard of "Borrowing expenses."
Self-constructed or
self-made tangible fixed assets: The historical cost of self-constructed
tangible fixed assets is the actual cost of self-constructed or self-made fixed
assets plus (+) installation and trial operation expenses. Where the
enterprises turn their self-made products into fixed assets, the historical
cost shall be the production cost of such products plus (+) expenses directly
related to the putting of the fixed assets into the ready-for-use state. In the
above-said cases, all internal profits must not be calculated into the
historical cost of such assets. Unreasonable expenses such as those for wasted
raw materials and/or materials, for labor, or other excessively high expenses incurred
in the self-construction or self-making process must not be calculated into the
historical cost of tangible fixed assets.
Tangible fixed assets
purchased in the form of exchange: The historical cost of tangible fixed assets
purchased in exchange for dissimilar tangible fixed assets or other assets
shall be determined according to the reasonable value of the received tangible
fixed assets, or the reasonable value of exchanged assets, after adjusting cash
amounts or cash equivalents additionally paid or received.
The historical cost
of tangible fixed assets procured in the form of exchange for similar ones or
possibly formed from the sale for the right to own similar assets (similar
assets are those with similar utilities, in the same business domain and of
equivalent value). In both cases, there will be neither profit nor loss
recognized in the exchanging process. The historical cost of received tangible
fixed assets shall be calculated as equal to the residual value of exchanged
fixed assets. For example: The exchange of similar tangible fixed assets is
like the exchange of machinery, equipment, transport means, service
establishments or other tangible fixed assets.
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2.1. For cases where
tangible fixed assets are procured by the mode of deferred or installment
payment:
- When tangible fixed
assets are purchased by the mode of deferred or installment payment and
immediately put into production and/or business activities, record:
Debit in Account 211
- Tangible fixed assets (historical cost, recorded according to the spot buying
price)
Debit in Account 133
- Deducted VAT (if any)
Debit in Account 242
- Prepaid long-term expenses (the interest on deferred payments is the
difference between the total payable amount minus (-) the spot buying price
minus (-) VAT (if any)
Credit in Account 331
- Payables to sellers (total payment price).
- Every period, when
making payments to the sellers, accountants shall record:
Debit in Account 331
- Payables to sellers
Credit in Accounts
111 and 112 (Periodically payable amounts include the original price and
interests on deferred payments or periodically payable installments).
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Debit in Account 635-
Financial expenditures
Credit in Account 242
- Prepaid long-term expenses.
2.2. For cases where
the enterprises are donated or presented with tangible fixed assets and
immediately use them for production and business activities, record:
Debit in Account 211
- Tangible fixed assets
Credit in Account 711
- Other incomes.
Other expenses
directly related to donated or presented tangible fixed assets shall be
calculated into their historical cost, and record:
Debit in Account 211
- Tangible fixed assets
Credit in Accounts
111, 112, 331�
2.3. For cases where
tangible fixed assets are self-made:
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Debit in Account 632
- Cost of goods sold
Credit in Account 155
- Finished products (if delivered from stores for use)
Credit in Account 154
- Incomplete production and business costs (if products are put into use
immediately after their manufacture without being warehoused).
Concurrently record
as increase in tangible fixed assets:
Debit in Account 211
- Tangible fixed assets
Credit in Account 512
- Internal turnover (turnover is the actual price of products).
- For installation
and trial operation expenses related to tangible fixed assets, record:
Debit in Account 211
- Tangible fixed assets
Credit in Accounts
111, 112, 331,�
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2.4.1. Tangible fixed
assets purchased in the form of exchange for similar ones:
- If receiving
similar tangible fixed assets from exchange and immediately using them in
production and business activities, record:
Debit in Account 211
- Tangible fixed assets (The historical cost of received tangible fixed assets
shall be recorded according to the residual value of exchanged fixed assets)
Debit in Account 214
- Wear of fixed assets (Depreciated value of exchanged fixed assets)
Credit in Account 211
- Tangible fixed assets (The historical cost of exchanged tangible fixed
assets).
2.4.2. Tangible fixed
assets purchased in the form of exchange for dissimilar ones:
- When handing over
tangible fixed assets to the exchanging party, accountants shall record them as
a decrease in fixed assets:
Debit in Account 811
- Other expenditures (Residual value of exchanged tangible fixed assets)
Debit in Account 214
- Wear of fixed assets (Depreciated value)
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Concurrently record
them as an increase in income from the exchange of fixed assets:
Debit in Account 131
- Receivables from customers (Total payment price)
Credit in Account 711
- Other incomes (Reasonable value of exchanged fixed assets)
Credit in Account
3331 - Payable VAT (Account 33311) (if any).
- When receiving
tangible fixed assets from exchange, record:
Debit in Account 211
- Tangible fixed assets (Reasonable value of fixed assets received from
exchange)
Debit in Account 133
- Deducted VAT (if any)
Credit in Account 131
� Receivables from
customers (Total payment price).
For cases where
additional sums must be collected as the reasonable value of exchanged fixed
assets is bigger than the reasonable value of fixed assets received from exchange,
after receiving such sums from the owners of received fixed assets, record:
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Credit in Account 131
- Receivables from customers.
For cases where
additional sums must be paid as the reasonable value of exchanged fixed assets
is smaller than the reasonable value of fixed assets received from exchange,
after paying such sums to the owners of received fixed assets, record:
Debit in Account 131
- Receivables from customers.
Credit in Accounts
111, 112�
2.5. For cases where
tangible fixed assets being houses, architectural objects associated with the
land use right are purchased and immediately used for production and business
activities, record:
Debit in Account 211
- Tangible fixed assets (Historical cost - details of houses and architectural
objects)
Debit in Account 213
- Intangible fixed assets (Historical cost - Details of land use right)
Debit in Account 133
- Deducted VAT (if any)
Credit in Accounts
111, 112, 331�
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Debit in Account 214
- Wear of fixed assets (Depreciated value)
Debit in Accounts
627, 641 and 642 (Residual value) (If residual value is small)
Debit in Account 242
- Prepaid long-term expenses (Residual value) (If residual value is great and
must be gradually allocated)
Credit in Account 211
- Tangible fixed assets.
2.7. When the capital
construction work is completed and assets are handed over and used for
production and business activities, record:
Debit in Account 211
- Tangible fixed assets
Credit in Account 241
- Unfinished capital construction.
- If assets formed
through investment fail to satisfy the tangible fixed asset recognition
criteria prescribed in the accounting standards, record:
Debit in Accounts 152
and 153 (if they are materials and tools put into stores)
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2.8. Expenses
incurred after initial recognition relating to intangible fixed assets, such as
repair, renovation and upgrading:
- When expenses for
repair, renovation and/or upgrading of tangible fixed assets are incurred after
initial recognition, record:
Debit in Account 241
- Unfinished capital construction
Credit in Accounts
112, 152, 331, 334,�
- When the repair,
renovation and/or upgrading are completed and the fixed assets are put into
use, record:
+ If they satisfy
conditions for recording as increase in the historical cost of tangible fixed
assets according to the provisions of accounting standards, record:
Debit in Account 211
- Tangible fixed assets
Credit in Account 241
- Unfinished capital construction.
+ If they fail to
satisfy conditions for recording as increase in the historical cost of tangible
fixed assets according to the provisions of accounting standards, record:
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Debit in Account 242
- Prepaid long-term expenses (if their value is big and must be gradually
allocated)
Credit in Account 241
- Incomplete capital construction.
3. Guidance on
accounting of expenses not allowed to be calculated into the historical cost of
fixed assets
For self-constructed
or self-made tangible fixed assets, such unreasonable expenses as wasted raw
materials and materials, labor or other amounts spent in excess of the normal
level in the process of self-construction or self-making shall not be
calculated into the historical cost of fixed assets, record:
Debit in Accounts
111, 138, 334� (Compensations paid
by organizations and individuals)
Debit in Account 632
- Cost of goods sold
Credit in Account 241
- Unfinished capital construction (for self-construction)
Credit in Account 154
- Incomplete capital construction expenses (for self-making).
III.
GUIDANCE ON ACCOUNTING OF THE STANDARD "INTANGIBLE FIXED ASSETS"
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This Account is used
to reflect the present value and the fluctuation situation of increase,
decrease in intangible fixed assets of the enterprises.
Intangible fixed
assets are assets which have no physical form but their value can be
determined, are possessed by enterprises for use in their production, business,
service provision or lease to other subjects in compliance with the intangible
fixed asset-recognition criteria.
The accounting of
this account should respect the following regulations:
1. The historical
cost of intangible fixed assets consists of all the costs incurred by the
enterprises to acquire intangible fixed assets, calculated up to the time of
putting such assets into use as planned.
- The historical cost
of intangible fixed assets purchased separately includes the buying price
(minus (-) trade discounts or price reductions), taxes (excluding refunded tax
amounts) and expenses directly related to the putting of assets into use as
planned.
- For cases where
intangible fixed assets are procured by the deferred or installment payment
mode, their historical cost shall be reflected according to the spot buying
price at the buying time. The difference between the buying price for deferred
payment and the spot buying price shall be accounted into the production and
business cost according to the payment period, unless such difference is
calculated into the historical cost of intangible fixed assets (capitalization)
according to the provisions of the accounting standard "Borrowing
expenses."
- For intangible
fixed assets formed from the exchange, paid with documents related to the
capital ownership of the units, their historical cost shall be the reasonable
value of documents issued and related to the units capital ownership.
- The historical cost
of intangible fixed assets being the right to use land for definite terms shall
be the value of the land use right when the land is assigned or the sum of
money payable when lawfully receiving the land use land right from other persons,
or the value of the land use right accepted as joint-venture capital
contribution.
- The historical cost
of intangible fixed assets granted by the State or donated or presented shall
be determined according to the initial reasonable value plus (+) the expenses
directly related to the putting of such assets into use as planned.
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3. In the use
process, intangible fixed assets must be depreciated into the production and
business cost according to the provisions of the Standard of Intangible Fixed
Assets.
4. Intangible fixed
asset-related expenses that are incurred after initial recognition must be
recognized as production and business cost in the period. If they satisfy
simultaneously the following two conditions, they shall be recorded as increase
in the historical cost of intangible fixed assets:
- Incurred expenses
that are likely to enable intangible fixed assets to create future economic
benefits bigger than the initially assessed operation level;
- Expenses that are
reliably appraised and closely associated with particular intangible fixed
assets.
5. Incurred expenses
that bring about future economic benefits to the enterprises, which consist of
enterprise establishment expenses, personnel- training expenses, and
advertising expenses, that are incurred in the pre-operation time of
newly-established enterprises, expenses for the research stage and relocation
expenses shall be recognized as production and business cost in the period or
be gradually allocated into the production and business cost in the maximum
period of 3 years.
6. Expenses related
to intangible assets, which have been recognized by the enterprises as expenses
for determining business results in the period, shall not be re-recognized into
the historical cost of intangible fixed assets.
7. Trademarks,
distribution right, name lists of customers and similar items formed within the
enterprises shall not be recognized as intangible fixed assets.
8. Intangible fixed
assets shall be monitored in detail according to each object recorded as fixed
asset in the "Fixed asset register."
Structure and content
of reflection of account 213 � intangible fixed assets
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Increased historical
cost of intangible fixed assets.
The Credit side:
Decreased historical
cost of intangible fixed assets.
The Debit balance:
The historical cost
of existing intangible fixed assets at the enterprise.
Account 213 -
Intangible fixed assets, consists of 6 class-2 Accounts:
- Account 2131 - Land
use right: reflects the value of intangible fixed assets being all the actually
spent expenses directly related to the used land, comprising money amounts spent
to acquire the land use right, expenses for compensation, ground clearance and
ground fill-up (for cases where the land use right is separate from the stage
of investment in houses and architectural objects on the land), registration
fee (if any)� This account shall
not cover expenses for building works on the land.
- Account 2132 -
Distribution right: reflects the value of intangible fixed assets being all
amounts actually spent by the enterprises to acquire the distribution right.
- Account 2133 -
Copyright, patents:
reflects the value of intangible fixed assets being all amounts actually spent
to acquire copyright or patents.
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- Account 2135 -
Computer software:
reflects the value of intangible fixed assets being all amounts actually spent
by the enterprises to acquire computer software.
- Account 2136 -
Licenses and franchise permits: reflects the value of intangible fixed assets being all
amounts spent by the enterprises to obtain licenses and franchise permits to
carry out relevant jobs, such as exploitation permits, licenses to produce
novel products
- Account 2138 -
Other intangible fixed assets: reflects the value of other assorted intangible fixed
assets not reflected in the accounts above, such as: copyright, the right to
use contracts
Methods of accounting
a number of major economic activities:
1. Accounting
intangible fixed asset-purchasing operations:
- For cases where
intangible fixed assets are procured for use in the production and trading of
goods and/or services subject to VAT calculated by the deduction method,
record:
Debit in Account 213
- Intangible fixed assets (The buying price without VAT)
Debit in Account 133
- Deducted VAT (1332)
Credit in Account 112
- Bank deposits; or
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Credit in Account 331
- Payables to sellers.
- For cases where
intangible fixed assets are purchased for use in the production and trading of
goods and/or services not subject to VAT, record:
Debit in Account 213
- Intangible fixed assets
Credit in Account
112, 331�
2. For cases where
intangible fixed assets are purchased by the mode of deferred or installment
payment:
2.1. When intangible
fixed assets are purchased and used in the production and trading of goods
and/or services subject to VAT calculated by the deduction method, record:
Debit in Account 213 � Intangible fixed
assets (Historical cost - according to the spot buying price without VAT)
Debit in Account 242
- Prepaid long-term expenses (interests paid on deferred or installment
payments shall be calculated as equal to the difference between the total
payable amount minus (-) the spot buying price and input VAT (if any)
Debit in Account 133
- Deducted VAT (1332)
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2.2. When intangible
fixed assets are purchased for use in the production and trading of goods
and/or services not subject to VAT or subject to VAT calculated by the direct
method, record:
Debit in Account 213
- Intangible fixed assets (historical cost � according to the spot buying price with VAT)
Debit in Account 242
- Prepaid long-term expenses (interests paid on deferred or installment
payments shall be calculated as equal to the difference between the total
payable amount minus (-) the spot buying price)
Credit in Account 331
- Payables to sellers (Total payment price).
2.3. Every period to
compute interests paid for the purchase of fixed assets by the mode of deferred
or installment payment, and record:
Debit in Account 635
- Financial expenditures
Credit in Account 242
- Prepaid long-term expenses.
2.4. When making
payment to the sellers, record:
Debit in Account 331
- Payables to sellers
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3. Intangible fixed
assets purchased in the form of exchange
3.1. Exchange of two
similar intangible fixed assets:
When receiving
similar intangible fixed assets exchanged for similar intangible fixed assets
and immediately using them for production and business activities, record:
Debit in Account 213
- Intangible fixed assets (The historical cost of received intangible fixed
assets shall be recorded according to the residual value of exchanged
intangible fixed assets)
Debit in Account 214
- Wear of fixed assets (2143) (The depreciated value of exchanged fixed assets)
Credit in Account 213
- Intangible fixed assets (The historical cost of exchanged intangible fixed
assets).
3.2. Exchange of two
dissimilar intangible fixed assets:
- Record exchanged
intangible fixed assets as decrease:
Debit in Account 214
- Wear of fixed assets (The depreciated value)
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Credit in Account 213
- Intangible fixed assets (Historical cost)
- Concurrently
reflect the income from exchange of fixed assets and record:
Debit in Account 131
- Receivables from customers (Total payment price)
Credit in Account 711
- Other incomes (Reasonable value of exchanged fixed assets)
Credit in Account 3331
- VAT (33311)(if any).
- Record received
intangible fixed assets as increase:
Debit in Account 213
- Intangible fixed assets (Reasonable value of received fixed assets)
Debit in Account 133
- Deducted VAT (1332) (if any)
Credit in Account 131
- Receivables from customers (Total payment price).
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4. The value of
intangible fixed assets formed within the enterprises at the development stage:
4.1. When expenses
are incurred in the development stage, gather them into the production and
business cost in the period or in prepaid long-term expenses, and record:
Debit in Account 242
- Prepaid long-term expenses (where the value is big) or
Debit in Account 642
- Enterprise management costs
Credit in Accounts
111, 112, 152, 153, 331�
4.2. When deeming
that the development results satisfy the intangible fixed asset definition and
recognition criteria:
a/ Gather expenses
that actually incurred in the development stage to constitute the historical
cost of intangible fixed assets, and record:
Debit in Account 241
- Unfinished capital construction
Debit in Account 133
- Deducted VAT (1332 - if any)
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b/ At the end of the development
stage, accountants must determine the total actually incurred expenses that
constitute the historical cost of intangible fixed assets, and record:
Debit in Account 213
- Intangible fixed assets
Credit in Account 241
- Unfinished capital construction.
5. When buying
intangible fixed assets being the land use right together with houses and/or
architectural objects on the land, the value of intangible fixed assets being
the land use right and the value of intangible fixed assets being houses and/or
architectural objects must be determined separately, and record:
Debit in Account 211
- Tangible fixed asset (The historical cost of houses and architectural
objects)
Debit in Account 213
- Intangible fixed assets (The historical cost of the land use right)
Debit in Account 133
- Deducted VAT (1332 - if any)
Credit in Accounts
111, 112, 331�
6. When buying
intangible fixed assets and paying them with documents related to the capital
ownership of
joint-stock companies, the historical cost of such intangible fixed assets
shall be the reasonable value of documents issued and related to the capital
ownership, record:
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Credit in Account 411
- Business capital sources (Details of contributed capital and equity surplus.
Equity surplus means the difference between the reasonable value and the share
par-value).
7. When the
enterprises are donated or presented intangible fixed assets and immediately
use them for production and business activities:
7.1. Upon receiving
donated and presented intangible fixed assets, record:
Debit in Account 213
- Intangible fixed assets
Credit in Account 711
- Other incomes.
For incurred expenses
related to donated and presented intangible fixed assets, record:
Debit in Account 213
- Intangible fixed assets
Credit in Accounts
111, 112�
7.2. When calculating
the enterprise income tax payable (if any) on the value of donated or presented
intangible fixed assets, record:
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Credit in Account 333
- Taxes and remittances into the State budget (3334).
7.3. After
calculating the enterprise income tax payable (if any) on the value of donated
or presented intangible fixed assets, record them as increase in the
enterprises business capital:
Debit in Account 421-
Undistributed profits
Credit in Account 411
- Business capital source (Details of other business capital sources).
8. When the
enterprises receive contributed joint-venture capital in the form of land use
right, on the basis of the land use right-transfer dossiers, record:
Debit in Account 213
- Intangible fixed assets
Credit in Account 411
- Business capital source.
9. Cost-accounting as
decrease in intangible fixed assets in the case where research expenses, trade
advantages and establishment costs have been accounted into intangible fixed
assets before the accounting standards are implemented:
- If the residual
value of these intangible fixed assets is small and transferred once into the
production and business cost in the period, record:
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Debit in Account 214
- Wear of fixed assets (Depreciated amounts)
Credit in Account 213
- Intangible fixed assets (Historical cost).
- If the residual
value of these intangible fixed assets is great and transferred into prepaid
long-term expenses for gradual allocation, record:
Debit in Account 242
- Prepaid long-term expenses
Debit in Account 214
- Wear of fixed assets (Depreciated amounts)
Credit in Account 213
- Intangible fixed assets (Historical cost).
10. The
cost-accounting of the sale and liquidation of intangible fixed assets shall comply with the
regulations on the cost-accounting of the sale and liquidation of tangible
fixed asset (see the guidance in Account 211).
2. Additional
guidance on the accounting of wear of intangible fixed assets
For cases where at
the end of the fiscal year, the enterprises re-consider the amortization
duration and the method of amortization of their intangible fixed assets, if
they change the amortization level, they should revise the amortized amounts
recorded in the accounting books as follows:
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Debit in Accounts
627, 641 and 642 (The increasing amortization difference)
Debit in Account 214
- Wear of fixed assets (2143).
- If due to change in
the amortization method and the duration of amortization of intangible fixed
assets, the amortization level of intangible fixed assets decreases as compared
with the amounts already amortized in the year, thus resulting in the
decreasing amortization difference, record:
Debit in Account 214
- Wear of fixed assets (2143)
Credit in Accounts 627,
641 and 642 (The decreasing amortization difference).
3. Adding Account 242
- Prepaid long-term expenses
This account is used
to reflect expenses that have been actually incurred but related to the
production and business results of many accounting years and the transfer of
these expenses into the production and business cost of the subsequent
accounting years.
Prepaid long-term
expenses include:
- Prepaid expenses
for the lease of fixed asset operations (land use right, workshops, warehouses,
working offices, shops and other fixed assets) in service of business
activities in many fiscal years;
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- Prepaid expenses in
service of business activities in many fiscal years;
- Enterprise
establishment expenses, advertising expenses incurred in the pre-operation
stage;
- Research expenses
of great value;
- Expenses for the
development stage, which fail to meet the criteria for recognition as
intangible fixed asset;
- Expenses for
training managerial officials and technical workers;
- Expenses for
relocation of business places or reorganization of the enterprises;
- Trade advantages in
the cases of enterprise acquisition or enterprise merger of acquisition nature;
- Premiums of
assorted insurance (fire and explosion insurance, civil liability insurance for
transport means, vehicle body insurance, property insurance) and assorted fees
which the enterprises pay in lump-sum for many accounting years;
- Tools and instruments
of big value, which are delivered from store for one-off use and the tools and
instruments which are used in business activities for more than one fiscal year
and must be gradually allocated to expense-incurring subjects over many years;
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- Too great fixed
asset overhaul expenses paid in lump sum, which must be allocated in many
years;
- Other amounts.
Accounting of account
242 should respect the following provisions:
1. To account in
Account 242 only expenses that are incurred and related to the operation
results in one fiscal year;
2. If the
above-listed expenses are only related to the current fiscal year, once they
are actually incurred, they shall be immediately recognized into the production
and business cost in that fiscal year but not be reflected into Account 242
"Prepaid long-term expenses";
3. The calculation
and allocation of prepaid long-term expenses into the production and business
cost in each accounting period must be based on the nature and level of each
type of expense so as to opt for reasonable methods and criteria;
4. Accountants must
monitor in detail each type of prepaid long-term expense already incurred and
allocated into the expense-incurring subjects in each accounting period as well
as the remaining amounts not yet allocated into expense.
Structure and content
of reflection of account 242 - prepaid long-term expenses
The Debit side:
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The Credit side:
Prepaid long-term
expenses allocated into expenses for production and business activities in the
period.
The Debit balance:
Prepaid long-term
expenses not yet calculated into the production and business cost of the fiscal
year.
Method of accounting
some major economic activities:
1. When enterprise
establishment expenses, expenses for training employees, advertising expenses
incurred in the newly-established enterprises pre-operation stage, expenses for
the research stage and relocation expenses are incurred:
a/ If incurred
expenses are not big, recognize all of them into the production and business
cost in the period, and record:
Debit in Account 641
- Sale costs (Advertising expenses)
Debit in Account 642
- Enterprise management costs (Establishment expenses, employee-training
expenses, research expenses)
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Credit in Accounts
111, 112, 152, 153, 331, 334�
b/ If incurred
expenses are big and must be allocated gradually into production and business
costs of many fiscal years, when expenses are incurred and gathered into
Account 242 "Prepaid long-term expenses," record:
Debit in Account 242
- Prepaid long-term expenses
Debit in Account 133
- Deducted VAT (If any)
Credit in Accounts
111, 112, 152, 331, 334, 338�
c/ Every period
allocate prepaid long-term expenses into the production and business cost, and
record:
Debit in Accounts
641, 642
Credit in Account 242
- Prepaid long-term expenses.
2. When paying fixed
asset and/or infrastructure rents in advance by the mode of renting for
operation in service of business activities in many years, record:
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Debit in Account 133
- Deducted VAT
Credit in Accounts
111, 112�
Every period allocate
expenses for renting fixed assets and infrastructure into the production and
business cost according to the criterion of reasonable allocation, and record:
Debit in Accounts 635
and 642
Credit in Account 242
- Prepaid long-term expenses.
3. For big-value
tools and instruments which are delivered from store for one-off use and must
be gradually allocated into the production and business cost or business
management costs, the following two allocation methods may be applied:
- Double allocation;
- Multiple
allocation.
3.1. Double
allocation:
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Debit in Account 242
- Prepaid long-term expenses
Credit in Account 153
- Tools and instruments.
Concurrently effect
the first-time allocation (of 50% of the value of tools and instruments
delivered for use) into the production and business cost or management costs,
and record:
Debit in Accounts
627, 641 and 642
Credit in Account 242
- Prepaid long-term expenses.
When damage, loss or
use expiry is reported according to regulations, accountants shall allocate the
residual value of tools and instruments into the production and business or
management costs according to the following formula:
Amounts Value of
damaged tools Value of recovered Material
allocated for the = ------------------------------ - discarded - compensations
second time 2 materials (if any) (if any)
Accountants shall
record:
Debit in Account 152
- Raw materials and materials (Value of recovered discarded materials, if any)
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Debit in Accounts
627, 641 and 642 (Amounts allocated for the second time to the users)
Credit in Account 242
- Prepaid long-term expenses.
3.2. Multiple
allocation:
- When delivering
tools, instruments and appliances for use or lease, accountants must base
themselves on the value, time and extent of their participation in the use
process so as to determine the number of allocation times and the level of
expense to be allocated each time for each type of tool or instrument. The base
for determining the level of expense to be allocated each time may be the use
duration or the volume of products or services traded with the use of such tools
in each accounting period.
The cost-accounting
method is similar as in the case of double allocation.
In both cases of
double allocation and multiple allocation, accountants must monitor in detail
each expense to ensure that the total allocated expenses are compatible with
the incurred ones and they are allocated to the right expense-incurring
subjects.
4. For the purchase
of intangible fixed assets by the mode of deferred or installment payment,
record it as prescribed in Section 2.1, Part II - Guidance on Accounting of the
Standard "Tangible fixed asset."
IV.
GUIDANCE ON ACCOUNTING OF THE STANDARD "TURNOVER AND OTHER INCOMES"
1. Correction: To delete the phrase
"Payment discounts" in paragraph 06 of the standard "Turnover
and other incomes" issued together with the Finance Minister’s Decision No.
149/2001/QD-BTC of December 31, 2001.
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2.1. Class-5 Account
- Turnover:
Class-5 Accounts are
used to reflect the entire turnover realized by an enterprise in an accounting
period.
Turnover means the
total value of economic benefits earned by an enterprise in an accounting
period, which arise from normal production and business activities of the
enterprise, contributing to augmenting the owner’s capital.
Turnover arising from
transactions or events is determined through agreement between the enterprises
and buyers or users of assets. It is determined as the reasonable value of
received or receivable amounts minus (-) trade discounts, reductions of the
price of goods sold and the value of returns of goods sold.
Accounting of this
account should respect the following regulations
1. Turnover and costs
related to the same transaction must be recognized simultaneously according to
the matching principle and the fiscal year.
2. Turnover shall be
recognized in the accounting period only if it simultaneously satisfies all
conditions for recognition of turnover from goods sale, turnover from service
provision, turnover from earned interests, royalties, dividends and distributed
profits as prescribed at Points 10, 16 and 24 of the Standard of Turnover and
Other Incomes, (Decision No. 149/2001/QD-BTC of December 31, 2001 of the
Finance Ministry) and the provisions of the current accounting regime. Any
revenues that fail to satisfy the turnover recognition conditions shall not be
accounted into turnover accounts.
3. When goods or
services are exchanged for goods or services, which are similar in nature and
value, such exchange shall not be regarded as a turnover-generating transaction
and not recognized as turnover.
4. Turnover
(including internal turnover) must be separately monitored according to each
type of turnover: Turnover from goods sale, turnover from service provision,
turnover from interests, royalties, dividends and distributed profits. Each
type of turnover shall then be concretized according to each turnover item,
such as turnover from goods sale can be concretized into turnover from sale of
products, goods in order to serve the full and accurate determination of
business results according to the requirements on management of production and
business activities and the making of reports on the enterprises business
results.
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6. On principle, at
the end of each accounting period, the enterprises must determine the results
of their production and business activities. All net turnover realized in the
accounting period shall be transferred into Account 911 - Determination of
business results. Accounts belonging to the turnover-Account class shall not
have period-end balance.
The turnover-account
class consists of 6 accounts, divided into 3 groups:
a/ Account 51 group -
Turnover, consisting of 03 accounts:
- Account 511 -
Turnover from goods sale and service provision;
- Account 512 -
Internal turnover;
- Account 515 -
Turnover from financial activities.
b/ Account 52 group,
consisting of 01 account:
- Account 521 - Trade
discounts.
c/ Account 53 group,
consisting of 02 accounts:
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- Account 532 -
Reductions of the price of good sold.
2.2. Account 511 -
Turnover from goods sale and service provision
a/ To rename Account
511 - "Turnover from goods sale" as Account 511 - "Turnover from
goods sale and service provision."
b/ Content of
reflection of Account 511 - "Turnover from goods sale and service
provision."
This account is used
to reflect an enterprise’s turnover from goods
sale and service provision in an accounting period of production and business
activities from the following transactions and operations:
- Goods sale: Sale of products made by the enterprise and sale of goods bought in;
- Service provision:
Performance of jobs already agreed upon in contracts in one or more than one
accounting period, such as providing transport and tourism services, leasing
fixed assets by the mode of operation leasing
Turnover from goods
sale and service provision is all sums of money already collected or to be
collected from turnover-generating transactions and operations such as sale of
products and goods, provision of services for customers, including surcharges
and charges collected in addition to selling prices (if any).
Where enterprises
earn turnover from goods sale and service provision in foreign currencies, they
must convert them into Vietnam dong at the actually-applied exchange rate or
the average transaction rate on the inter-bank foreign currency market
announced by the State Bank of Vietnam at the time of occurrence of the
economic operations.
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Accounting of this
account should respect the following regulations:
1. Account 511 "Turnover
from goods sale and service provision" shall reflect only turnover from
the quantities of products and/or goods already sold out; already provided
services determined as having been consumed in the period, regardless whether
such turnover has been collected or will be collected.
2. The accounting of
the enterprises turnover from goods sale and service provision shall abide by
the following principles:
- For products, goods
and services subject to VAT by the deduction method, the turnover from goods
sale and service provision shall be the selling price without VAT;
- For products, goods
and services not subject to VAT or subject to VAT by the direct method, the
turnover from goods sale and service provision shall be the total payment
price;
- For products, goods
and services subject to special consumption tax or export tax, the turnover
from goods sale and service provision shall be the total payment price
(including special consumption tax or export tax);
- Those enterprises
that process supplies and/or goods shall only reflect into the turnover from
goods sale and service provision the actually earned processing remunerations
but not the value of supplies and/or goods received for processing;
- For goods accepted
by the enterprises for commissioned agency or consignment sale at the right
prices, the sale commissions enjoyed by the enterprises shall be accounted into
the turnover from goods sale and service provision.
- Where goods are
sold by the mode of deferred or installment payments, the enterprises shall
recognize turnover from goods sale according to the spot selling price and
recognize into turnover from financial activities interests calculated on the
deferred payments according to the time of recognition of turnover.
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- Where, in a period,
the enterprises have recorded sale invoices and received money from the sale of
goods but fail to deliver the goods to the buyers at the end of the period, the
value of this quantity of goods shall not be regarded as having been consumed
and, therefore, not accounted in Account 511 - "Turnover from goods sale
and service provision." The amounts already collected from customers shall
be credited to Account 131 - "Receivables from customers." After the
goods are actually delivered to the buyers, the value of the delivered goods
for which payments have been collected in advance shall be accounted into
Account 511 - "Turnover from goods sale and service provision," as it
now satisfies the turnover recognition conditions.
- For asset-leasing
cases where rents have been paid in advance for many years, the turnover from
service provision recognized in the fiscal year shall be the rent determined by
dividing the total collected rent amount to the number of years of asset
leasing.
- For the enterprises
that supply products, goods and/or services at the State’s requests, thus
enjoy the State’s financial supports
and price subsidies according to regulations, the turnover from financial
supports and price subsidies shall be the amount officially announced by the
State or actually provided. The turnover from financial supports and price
subsidies shall be reflected in Account 5114 - Turnover from financial supports
and price subsidies.
- The following
amounts shall not be reflected in this account:
l The value of goods,
supplies, semi-finished products delivered to the outside for processing.
l The value of
products, semi-finished products, services provided among member companies of
an all-branch accounting company or corporation (products, semi-finished
products, internally-consumed services).
l Proceeds from sale
and liquidation of fixed assets.
l The value of
products and goods consigned for sale; services provided completely for
customers, which the buyers have not yet accepted and paid for.
l The value of goods
consigned for sale by the mode of sale agency or consignment (not yet
determined as having been consumed).
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c/ Structure, content
of reflection and method of accounting major operations of Account 511 -
"Turnover from goods sale and service provision" and the opening of
class-2 accounts shall comply with the regulations for Account 511 -
"Turnover from goods sale" in the Enterprise Accounting Regime
(issued together with Decision No. 1141/TC/QD-CDKT of November 1, 1995 of the
Finance Ministry and circulars guiding the amendment and supplementation of the
Enterprise Accounting Regime). Particularly for payable VAT amounts calculated
by the direct method and arising in the period, they shall be recorded in the
Credit side of Account 3331 - "Payable VAT," corresponding to the
Debit side of Account 511 "Turnover from goods sale and service
provision."
Method of accounting
some major economic activities:
1. In the case of
goods sale by the mode of deferred and installment payment
a/ For goods subject
to VAT by the deduction method:
- When selling goods
on deferred or installment payment, record the first-time payment and amounts
to be collected for goods sold on deferred or installment payment, record
turnover from goods sale and collectible interests:
Debit in Accounts
111, 112 and 131 (Total payment price)
Credit in Account 511
- Turnover from goods sale and service provision (5113 - Spot selling price without
VAT)
Credit in Account 333
- Taxes and remittances to the State (3331 - Payable VAT)
Credit in Account
3387 - Unrealized turnover (The difference between the total amount payable
according to the selling price for deferred or installment payment and the spot
selling price without VAT).
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Debit in Accounts
111, 112�
Credit in Account 131
- Receivables from customers.
- When recognizing
turnover from interests on goods sold on deferred or installment payment in
each period, record:
Debit in Account 3387
- Unrealized turnover
Credit in Account 515
- Turnover from financial activities (Interests on deferred or installment
payments).
b/ For goods not
subject to VAT or subject to VAT by the direct method:
- When selling goods
on deferred or installment payment, record the first-time payment and amounts
to be collected from goods sold on deferred or installment payment, record
turnover from goods sale and collectible interests:
Debit in Accounts
111, 112 and 131
Credit in Account 511
- Turnover from goods sale and service provision (Spot selling price with VAT)
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- When actually
collecting subsequent payments for the goods sold, record:
Debit in Accounts
111, 112�
Credit in Account 131
- Receivables from customers.
- When recognizing
turnover from interests on goods sold on deferred or installment payment in
each period, record:
Debit in Account 3387
- Unrealized turnover
Credit in Account 515
- Turnover from financial activities (Interests on deferred or installment
payments).
2. Accounting of
payable VAT calculated by the direct method
At period-end,
accountants shall compute and determine VAT amounts payable by the direct
method on production and business activities, and record:
Debit in Account 511-
Turnover from goods sale and service provision
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2.3. Account 3387 -
Unrealized turnover
To rename Account
3387 - "Turnover received in advance" as Account 3387
"Unrealized turnover."
This account is used
to reflect unrealized turnover of an enterprise in an accounting period.
Unrealized turnover
consists of:
- Money amounts
received many years in advance for asset lease (operation leasing);
- The difference
between the selling price for deferred or installment payment as committed and
the spot selling price;
- Interests received
in advance when lending capital or buying debt instruments (bonds, bills�).
Accounting of this
account should respect the following regulations:
- When selling goods
or providing services by the mode of deferred or installment payment, the
turnover therefrom shall be recognized according to the spot selling price at
the time of turnover recognition.
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- When receiving in
advance rents for the lease of assets for many years, such rents shall be
recognized as unrealized turnover. In subsequent fiscal years, turnover shall
be recognized in a way suitable to turnover of each fiscal year.
Structure and content
of reflection of account 3387 - unrealized turnover:
The Debit side:
To transfer
"Unrealized turnover" into Account "Turnover from goods sale and
service provision," or Account "Turnover from financial
activities" (interests, royalties, dividends and distributed profits).
The Credit side:
To recognize
unrealized turnover arising in the period.
The Credit balance:
Unrealized turnover
at the end of the accounting period.
Method of accounting
some major economic activities:
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a/ For goods sold on
deferred or installment payment, which are subject to VAT by the deduction
method:
- When selling goods
on deferred or installment payment, recognize the turnover from goods sale and
service provision in the accounting period according to the spot selling price,
record the difference between the selling price for deferred or installment
payment and the spot selling price in Account "Unrealized turnover":
Debit in Accounts
111, 112 and 131
Credit in Account 511
- Turnover from goods sale and service provision (according to the spot selling
price without VAT)
Credit in Account
3387 - Unrealized turnover (The difference between the selling price for
deferred or installment payment and the spot selling price without VAT)
Credit in Account 333
- Taxes and remittances to the State (3331 - Payable VAT).
- Every period,
calculate, determine and transfer turnover from interests on deferred or
installment payments for goods sold in the period, and record:
Debit in Account 3387
- Unrealized turnover
Credit in Account 515
- Turnover from financial activities.
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Debit in Accounts 111
and 112.
Credit in Account 131
- Receivables from customers
b/ For goods sold on
deferred or installment payment, which are not subject to VAT or subject to VAT
by the direct method:
- When selling goods
on deferred or installment payment, recognize the turnover from goods sale and
service provision of the accounting period according to the spot selling price,
the difference between the selling price for deferred or installment payment
and the spot selling price shall be recognized as unrealized turnover, and
record:
Debit in Accounts
111, 112 and 131
Credit in Account 511
- Turnover from goods sale and service provision (Spot selling price with VAT)
Credit in Account
3387 - Unrealized turnover (The difference between the selling price for
deferred or installment payment and the spot selling price with VAT).
- At period-end,
determine the payable VAT calculated by the direct method, and record:
Debit in Account 511
- Turnover from goods sale and service provision
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- Every period,
calculate, determine and transfer turnover from interests on deferred or
installment payments for goods sold, and record:
Debit in Account 3387
- Unrealized turnover
Credit in Account 515
- Turnover from financial activities.
- When actually
collecting money from the goods sold on deferred or installment payment,
including the interests from goods sale, record:
Debit in Accounts 111
and 112
Credit in Account 131
- Receivables from customers.
2. For activities of
lease of assets for which rents have been collected in advance for many years
Turnover of a fiscal
year shall be determined by dividing the total rent already collected to the
number of years of asset lease. When receiving money prepaid by customers for
many accounting periods or years for asset-leasing activities, record:
a/ For units
calculating payable VAT by the tax deduction method:
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Debit in Accounts
111, 112� (Total amount
received in advance)
Credit in Account
3387 - Unrealized turnover (According to the price without VAT)
Credit in Account 333
- Taxes and remittances to the State (3331).
Concurrently
calculate and transfer turnover of the accounting period, and record:
Debit in Account 3387
- Unrealized turnover (price without VAT)
Credit in Account 511
- Turnover from goods sale and service provision (Turnover of the accounting
period).
- For the subsequent
accounting period, calculate and transfer the turnover of the subsequent
accounting period, and record:
Debit in Account 3387
- Unrealized turnover
Credit in Account 511
- Turnover from goods sale and service provision (Turnover of the accounting
period).
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Debit in Account 3387
- Unrealized turnover (price without VAT)
Debit in Account 531
- Returns of goods sold (for cases where turnover was recorded in the period
according to the price without VAT)
Debit in Account 3331
- Payable VAT (Money amounts returned to the lessees for VAT on non-performed
asset-leasing activities)
Credit in Accounts
111, 112, 3388� (Total amount
returned).
b/ For units
calculating payable VAT by the direct method:
- When receiving
money prepaid by customers for asset-leasing activities for many years, record:
Debit in Accounts
111, 112� (Total amount
received beforehand)
Credit in Account
3387 - Unrealized turnover (Total amount received beforehand).
Concurrently
calculate and transfer turnover of the accounting period in which money has
been collected, and record:
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Credit in Account 511
- Turnover from goods sale and service provision.
- For the subsequent
accounting period, calculate and transfer the turnover of the subsequent
accounting period, and record:
Debit in Account 3387
- Unrealized turnover
Credit in Account 511
- Turnover from goods sale and service provision
- At the end of the
accounting period, calculate and reflect the VAT payable by the direct method,
and record:
Debit in Account 511
- Turnover from goods sale and service provision
Credit in Account
3331 - Payable VAT.
- For money amounts
to be returned to customers for non-performance of asset-lease service
provision contracts (if any), record:
Debit in Account 3387
- Unrealized turnover
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2.4. To rename
Account 512 - "Turnover from internal sale" as Account 512 -
"Internal turnover."
This account is used
to reflect turnover from the quantities of products, goods and services
consumed within the enterprises.
The content,
structure, principles and methods of accounting major economic operations
reflected in this account shall be unchanged as prescribed in the Enterprise
Accounting Regime (issued together with Decision No. 1141).
2.5. To add Account
515 - Turnover from financial activities
This account is used
to reflect turnover from interests, royalty, dividends, distributed profits and
turnover from other financial activities of the enterprises.
Turnover from
financial activities consists of:
- Interests: Loan
interests, deposit interests, interests from the sale of goods on deferred or
installment payment, interests from bond and bill investments, trade discounts
earned from the sale of goods and services; interests from financial leasing;
- Incomes from asset
lease, letting other persons use assets (patents, trademarks, copyright,
computer software);
- Dividends,
distributed profits;
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- Incomes from
transfer or lease of infrastructures;
- Incomes from other
investment activities;
- Interest gains from
the sale of foreign currencies, interests from the exchange rate difference;
- Interest gains from
capital transfer;
- �
Accounting of this
account should respect the following regulations:
- Turnover from
financial activities reflected in Account 515 consists of turnovers from
interests, royalty, dividends and distributed profits and other financial
activities regarded as having been implemented in the period, regardless where
such turnovers have been actually collected or will be collected.
- For incomes from
activities of trading in securities, the difference between the higher selling
prices and the buying prices, interests from bonds, bills or share certificates
(without reflecting the total money amount collected from the sale of
securities) shall be recognized as turnover.
- For incomes from
activities of trading in foreign currencies, the interest difference between
the buying price and the selling price of foreign currencies shall be
recognized as turnover.
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- For incomes from
activities of dealing in real estates, the total proceeds from the sale of real
estates shall be recognized as turnover.
- For activities of
leasing infrastructures, the turnover from goods sale shall be recognized when
the hand-over of land to the customers in the field has been completed
according to the value of the land area handed over at the spot price.
Structure and content
of reflection of account 515 - turnover from financial activities
The Debit side:
- The payable VAT
amount calculated by the direct method (if any).
- To transfer net
turnover from financial activities into Account 911 - "Determination of
business results."
The Credit side:
Turnover from
financial activities arises in the period.
Account 515 shall
have no period-end balance.
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1. For reflecting
turnover being dividends, distributed profits arising in the period from
activities of contributing equity capital and/or joint-venture capital, record:
Debit in Accounts
111, 112, 138, 152, 156, 133�
Debit in Account 221
- Long-term securities investment (Receipt of dividends in the form of share
certificates)
Debit in Account 222
- Joint-venture capital contribution (Incomes added to capital contributed to
joint ventures)
Credit in Account 515
- Turnover from financial activities.
2. Method of
accounting securities investment activities:
- When buying
short-term and long-term investment securities, on the basis of actual buying
expenses, record:
Debit in Accounts
121, 221�
Credit in Accounts
111, 112, 141�
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l In case of not
receiving interests but using them for buying more bonds, bills and/or share
certificates, record
Debit in Account 121
- Short-term securities investment
Debit in Account 221
- Long-term securities investment
Credit in Account 515
- Turnover from financial activities.
l In case of
receiving interests in cash, record:
Debit in Accounts
111, 112�
Credit in Account 515
- Turnover from financial activities.
l In cases where the
enterprises receive investment yields, those accrued before they re-purchase
such investments, the enterprises must allocate this yield amount. Only the
yield portion earned in the periods after the enterprises repurchase these
investments shall be recognized as turnover from financial activities. For the
yield amount accrued before the enterprises re-purchase such investments, it
shall be recorded as decrease in the value of these bond and/or share certificate
investments, record:
Debit in Accounts 111
and 112 (Total yields earned)
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Credit in Account 221
- Long-term securities investment (The accrued investment yield before the
enterprises re-purchase the investments)
Credit in Account 515
- Turnover from financial activities (the yield amount in the periods after the
enterprise repurchase these investments).
l Every period, to
receive interests on share certificates and bonds (if any), and record:
Debit in Accounts
111, 112; or
Debit in Account 131
- Receivables from customers (Money not yet received immediately)
Credit in Account 515
- Turnover from financial activities
- When transferring
short-term and long-term securities, on the basis of the securities-selling
price:
l In case of profit,
record:
Debit in Accounts
111, 112, 131� (According to the
payment price)
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Credit in Account 221
- Long-term securities investment (The capital value)
Credit in Account 515
- Turnover from financial activities (Profit from the sale of securities).
- In case of loss,
record:
Debit in Accounts
111, 112 and 131 (Total payment price)
Debit in Account 635
- Financial expenditures (Loss from the sale of securities)
Credit in Account 121
- Short-term securities investment (The capital value)
Credit in Account 221
- Long-term securities investment (The capital value).
- When recovering or
paying for short-term securities, record:
Debit in Accounts 111
and 112 (The payment price)
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Credit in Account 515
- Turnover from financial activities.
3. Accounting of the
sale of foreign currencies
- In case of profit,
record:
Debit in Accounts 111
(1111), 112 (1121) (Total payment price - Actual selling rate)
Credit in Accounts
111 (1112), 112 (1122) (According to the exchange rate in the accounting book)
Credit in Account 515
- Turnover from financial activities (The difference between the higher actual
selling rate and the exchange rate recorded in the accounting books),
- In case of loss,
record:
Debit in Accounts 111
(1111), 112 (1121) (Total payment price - Actual exchange rate applicable to
the sale)
Debit in Account 635
- Financial expenditure (Loss amount) (The difference between the higher
exchange rate in the accounting book and the exchange rate actually applied in
the sale)
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4. Accounting of
activities of investment in real estate dealing:
- When buying real
estates, record:
Debit in Account 228
- Other long-term investments; or
Debit in Account 241
- Unfinished capital construction (if bought through capital construction
investment)
Debit in Account 133
- Deducted VAT (if any) (For enterprises paying VAT by the deduction method).
Credit in Accounts
111, 112, 331�
- For expenses
directly related to real-estate investment activities, record:
Debit in Account 241
- Unfinished capital construction
Debit in Account 133
- Deducted VAT (if any)
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- When transferring
expenses upon completion of real estate investment, record:
Debit in Account 228
- Other long-term investments
Credit in Account 241
- Unfinished capital construction.
- When selling real
estates:
l For total proceeds
earned from the sale of real estates, record:
Debit in Accounts 111,
112, 131 (Total payment amount)
Credit in Account 515
- Turnover from financial activities
Credit in Account
3331 - Payable VAT (33311) (if any).
l For the value of
the investment in real estates already sold, record:
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Credit in Account 228
- Other long-term investments.
l For expenses
directly related to activities of selling real estates, record:
Debit in Account 635
- Financial expenditures
Debit in Account 133
- Deducted VAT (if any)
Credit in Accounts 111,
112�
5. Accounting of
activities of lending capital for earning interests:
- When lending
capital for earning interests, record:
Debit in Account 128
- Other short-term investments (if giving short-term loans); or
Debit in Account 228
- Other long-term investments (if giving long-term loans)
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- Every period,
calculate and determine the loan interests collectible in the period according
to the loan contracts, and record:
Debit in Accounts 111
and 112 (if interests are collected immediately);
Debit in Account 131
- Receivables from customers (if interests are not received immediately)
Credit in Account 515
- Turnover from financial activities.
- For deposit
interests arising and collected in the period, record:
Debit in Accounts 111
and 112 (if interests are collected immediately)
Credit in Account 515
- Turnover from financial activities.
6. Accounting of
payment discounts:
For payment discounts
enjoyed thanks to the early payment for the purchase of goods, which are
accepted by the sellers, record:
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Credit in Account 515
- Turnover from financial activities.
7. Accounting of
turnover from the lease of infrastructures:
For activities of
dealing in the lease of infrastructures, the turnover shall be recognized
according to each leasing term, or when the whole land area is handed over in
the field to the customers the turnover shall be recognized according to the
value of the land area already handed over and paid in lump sum or at the spot
selling price:
- For turnover from
the lease of infrastructures subject to VAT by the deduction method, record:
Debit in Accounts
111, 112, 131�
Credit in Account 515
- Turnover from financial activities (if collected according to each leasing
term)(The selling price without VAT)
Credit in Account
3331 - Payable VAT.
- For turnover from
the lease of infrastructures not subject to VAT or subject to VAT by the direct
method, record:
Debit in Accounts
111, 112�
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8. Accounting of the
exchange rate difference:
l At the end of the
accounting period, transfer the exchange rate difference arising in the period
into turnover from financial activities (after offsetting the increasing
exchange rate difference with the decreasing exchange rate difference arising
in the period), and record:
Debit in Account 413
- Exchange rate difference
Credit in Account 515
- Turnover from financial activities.
9. At the end of the
accounting period, compute and determine the payable VAT amount calculated by
the direct method on financial activities, and record:
Debit in Account 515
- Turnover from financial activities
Credit in Account
3331 - Payable VAT.
10. At period-end,
transfer net turnover from financial activities arising in the period to
Account 911 "Determination of business results," and record:
Debit in Account 515
- Turnover from financial activities
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3. To add Account 521
- Trade discounts
This account is used
to reflect trade discounts that the enterprises already reduce or pay to the
goods buyers who have bought goods (products or goods) and/or services in large
quantities according to the agreement on trade discounts already inscribed in
the trading economic contracts or goods purchase and sale commitments.
Accounting of this
account should respect the following regulations:
- To account into
this account only trade discounts that the buyers are entitled to and have been
given in the period according to the trade discount policy adopted by the
enterprises.
- Where in order to
achieve the quantity of goods eligible for a discount the buyers have to buy
goods many times, this trade discount shall be recorded as decrease in the
selling price inscribed in the last "(added value invoice" or
"sale invoice." Where the buyers discontinue buying goods or where
the trade discount the buyers are entitled to is bigger than the proceeds from
the goods sale inscribed in the last invoice, such trade discount must be paid
in cash to the buyers. Trade discounts in these cases shall be accounted in
Account 521.
- Where the buyers
purchase large quantities of goods and, therefore, enjoy trade discounts and
the selling price inscribed in invoices is the reduced price (less trade
discounts), such trade discounts must not be accounted in Account 521. Turnover
from goods sale shall be reflected according to the price minus trade
discounts.
- Trade discounts
already given must be monitored in detail according to each customer and each
category of goods sold, such as sold goods (products, goods), services.
- In the period,
actually-arising trade discounts shall be debited to Account 521 - Trade
discounts. At period-end, trade discounts shall be transferred into Account 511
- "Turnover from goods sale and service provision" so as to determine
the net turnover from the volumes of products, goods and/or services actually
realized in the accounting period.
Structure and content
of reflection of account 521 - trade discounts
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Trade discounts
already accepted for payment to customers.
The Credit side:
To transfer all trade
discounts into Account "Turnover from goods sale and service
provision" so as to determine the net turnover of the accounting period.
Account 521 - Trade
discounts, shall have no end-period balance.
Account 521 - Trade
discount, consists of 3 class-2 accounts:
- Account 5211 -
Goods discounts: Reflecting all the trade discount money (calculated on the
quantities of goods sold) offered to the goods buyers.
- Account 5212 -
Finished product discounts: Reflecting all the trade discount money calculated
on the quantities of products sold to the finished-product buyers.
- Account 5213 -
Service discounts: Reflecting all the trade discount money calculated on the
volume of services already provided for the service buyers.
Methods of accounting
some major economic activities
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Debit in Account 521
- Trade discounts
Debit in Account 3331
- Deducted VAT
Credit in Accounts
111, 112�
Credit in Account 131
- Receivables from customers.
2. At period-end,
transfer the trade discount money already accepted for the buyers into the
turnover account, and record:
Debit in Account 511
- Turnover from goods sale and service provision
Credit in Account 521
- Trade discounts.
4. To supplement the
content of reflection and guide the accounting of some economic operations
related to Account 632 - Cost of goods sold
4.1. To supplement
the structure and content of reflection of Account 632 - "Cost of goods
sold" as follows:
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- To reflect the cost
of products, goods and/or services already consumed in the period.
- To reflect material
and raw-material costs and labor costs spent in excess of the normal level.
Unallocated fixed general production costs shall not be calculated into the
value of inventory but into the cost of goods sold of the accounting period.
- To reflect losses
of inventory after subtracting (-) the compensations paid by individuals at
fault.
- To reflect the
self-construction and/or self-making cost in excess of the normal level, which
are not calculated into the historical cost of self-constructed or self-made
tangible fixed assets already finished.
- To reflect the
difference between the inventory price decrease reserve to be set up in the
current year, which is bigger than the reserve set up in the previous year.
The Credit side:
- To reflect the
amounts re-included in the inventory price decrease reserve at the end of the
fiscal year (December 31) (The difference between the reserve to be set up in
the current year, which is smaller than the reserve set up in the previous
year).
- To transfer the
cost of products, goods and/or services already consumed in the period into
Account 911 - "Determination of business results."
Account 632
"Cost of goods sold" shall have no period-end balance.
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a/ Where the quantity
of products actually turned out is lower than the normal capacity, accountants
must compute and determine the fixed general production costs allocated into
the processing cost of each product unit according to the normal capacity
level. The unallocated fixed general production costs (the difference between
the bigger total fixed general production costs actually arising and the fixed
general production costs calculated into the product price, shall not be
calculated into the product price) shall be recognized into the cost of goods
sold in the period, and record:
Debit in Account 632
- Cost of goods sold
Credit in Account 154
- Incomplete production and business expenses.
b/ For reflecting
inventory losses after subtracting (-) the compensations paid by individuals at
fault, record:
Debit in Account 632
- Cost of goods sold
Credit in Accounts
152, 153, 156, 138 (1381)�
c/ For reflecting the
fixed assets self-construction or self-making costs in excess of the normal
level, which must not be calculated into the historical cost of finished
tangible fixed asset, record:
Debit in Account 632
- Cost of goods sold
Credit in Account 241
- Incomplete capital construction expenses (for self-construction)
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d/ Accounting of
amounts deducted for or re-included into the inventory price decrease reserve
at the end of the fiscal year (December 31) (Because the reserve to be set up
in the current year is bigger or smaller than the previous year’s reserve)
At the end of the
fiscal year, the enterprises shall base themselves on the inventory price
decrease situation by December 31 to calculate the inventory price decrease
reserve to be set up and compare it with the previous year’s figure, then
determine the difference to be additionally set up or reduced (if any):
- In the case where
the inventory price decrease reserve to be set up in the current year is bigger
than the inventory price decrease reserve set up at the end of the previous
year’s accounting period,
the bigger difference shall be additional set up, and record:
Debit in Account 632
- Cost of good sold
Credit in Account 159
- Inventory price decrease reserve.
- In the case where
the inventory price decrease reserve to be set up in the current year is
smaller than the inventory price decrease reserve set up at the end of the
previous year�s accounting period,
the smaller difference shall be re-included, and record:
Debit in Account 159
- Inventory price decrease reserve
Credit in Account 632
- Cost of goods sold.
5. To add Account 635
- Financial expenditures
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Structure and content
of reflection of account 635 - financial expenditures
The Debit side:
- Expenses for
financial activities;
- Losses due to the
liquidation of short-term investments;
- Losses from the
foreign exchange rate difference actually arising in the period and the
exchange rate difference due to re-assessment of the period-end balance of
long-term receivable and payable amounts of foreign-currency origin;
- Losses arising from
the sale of foreign currencies;
- The securities
investment price decrease reserve;
- Expenses for
transferred land, lease of infrastructures, already determined as having been
consumed.
The Credit side:
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- At the end of the
accounting period, to transfer all financial expenditures and losses arising in
the period so as to determine the results of business activities.
Account 635 -
"Financial expenditures" shall have no period-end balance.
Methods of accounting
some major economic activities:
1. For reflecting the
expenses or losses related to financial investment activities, record:
Debit in Account 635
- Financial expenditures
Credit in Accounts
111 and 112; or
Credit in Account 141
- Advance amounts
Credit in Accounts
121, 128, 221, 222�
2. For paid and
payable loan interests, record:
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Credit in Accounts
111, 112, 341, 311, 335�
3. When expenses
related to securities-selling activities are incurred, record:
Debit in account 635
- Financial expenditures
Credit in Accounts
111, 112, 141�
4. When expenses are
incurred for real estate-dealing activities, record:
Debit in Account 635
- Financial expenditures
Credit in Accounts
111, 112, 141�.
5. For the value of
the capital invested in real estates already sold, record:
Debit in Account 635
- Financial expenditures
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6. When expenses for
activities of lending capital, trading in foreign currencies are incurred,
record:
Debit in Account 635
- Financial expenditures
Credit in Accounts
111, 112, 141�.
7. At the end of the
fiscal year, the enterprises shall base themselves on the situation of
short-term and long-term securities investment price decrease, and the existing
short-term and long-term investments up to December 31 to calculate the price
decrease reserve to be set up for these short-term and long-term investments,
compare it with the price decrease reserve set up in the previous year (if
any), then determine the difference to be additionally set up or to be reduced
(if any):
- For cases where the
short-term and long-term securities investment price decrease reserve to be set
up in the current year is bigger than that set up at the end of the previous
accounting year, thus resulting in the bigger difference, record:
Debit in Account 635
- Financial expenditures
Credit in Account 129
- Short-term investment price decrease reserve
Credit in Account 229
- Long-term investment price decrease reserve
- In cases where the
short-term and long-term investment price decrease reserve to be set up in the
current year is smaller than that set up at the end of the previous accounting
year, thus resulting in the difference to be re-included, record:
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Debit in Account 129
- Short-term investment price decrease reserve
Credit in Account 635
- Financial expenditures.
8. For payment
discounts offered to the buyers of goods and/or services, record:
Debit in Account 635
- Financial expenditures
Credit in Accounts
131, 111, 112�
9. At the end of the
accounting period, after offsetting the increasing and decreasing exchange rate
differences arising in the period, if the exchange rate difference is a
decrease (Debit balance of Account 413) and transferred into financial
expenditures in the period, record:
Debit in Account 635
- Financial expenditures
Credit in Account 413
- Exchange rate difference.
10. The exchange rate
difference due to the re-appraisal of the period-end balance of long-term
receivable and payable amounts of foreign-currency origin:
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Debit in Account 635
- Financial expenditures
Credit in Account 131
- Receivables from customers (Long-term receivables of foreign-currency
origin).
- For long-term
payable amounts, if the average transaction exchange rate on the inter-bank
foreign currency market, announced by the State Bank at the time of making
financial statements, is higher than the exchange rate reflected in the
accounting books of the period-end foreign currency balance of long-term
payable accounts, record the exchange rate difference:
Debit in Account 635
- Financial expenditures
Credit in Account 341
- Long-term loans (of foreign-currency origin)
Credit in Account 342
- Long-term debts (of foreign-currency origin).
11. For losses
arising from the sale of foreign currencies, record:
Debit in Accounts 111
and 112 (Vietnam dong) (at the selling rate).
Debit in Account 365
- Financial expenditures (losses - if any)
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12. For expenses for
transferred land, lease of infrastructures, already determined as having been
consumed, record
Debit in Account 365
- Financial expenditures
Credit in Account 228
- Other long-term investment expenses.
13. At period-end,
transfer all financial expenditures arising in the period into Account 911
"Determination of business results," and record:
Debit in Account 911
- Determination of business results
Credit in Account 635
- Financial expenditures.
6. To delete, change
the names and identification numbers of some accounts of classes 7 and 8
- To delete Account
711 - "Incomes from financial activities" and Account 811 -
"Expenses for financial activities";
- To change the name
and identification number of Account 721 -"Irregular incomes" into
Account 711 "Other incomes";
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7. To amend and
supplement the content of the 7-class accounts - Other incomes
This class of
accounts reflects other incomes from activities other than turnover-generating
activities of the enterprises.
This class of
accounts shall reflect only incomes but not expenses. Therefore, relevant
amounts arising in an accounting period shall be reflected in the Credit side
of accounts of class 7; at period-end they shall be all transferred into
Account 911 "Determination of business results" and there will be no
balance.
Class-7 account -
Other incomes, consists of 1 account:
- Account 711 - Other
incomes
The content of other
incomes is prescribed in paragraph 30 of the Standard "Turnover and other
incomes."
Other incomes of
enterprises include:
- Incomes from the
sale and liquidation of fixed assets;
- Fines collected
from customers for their contractual breaches;
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- Taxes refunded from
the State budget;
- Payable debts whose
creditors are unidentifiable;
- Pecuniary bonuses
from customers, related to the consumption of goods, products and services and
not calculated into turnover (if any);
- Incomes in the form
of gifts and presents in cash and in kind offered by organizations and
individuals to the enterprises;
- Previous years
business incomes which have been omitted or forgotten to be recorded in the
accounting books and now found out.
Structure and content
of reflection of account 711 - other incomes
The Debit side:
- Payable VAT amounts
(if any) calculated by the direct method on other incomes (if any) (at
enterprises paying VAT by the direct method).
- At the end of the
accounting period, to transfer other incomes in the period into Account 911
"Determination of business results."
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Other incomes arising
in the period.
Account 711 -
"Other incomes" shall have no period-end balance.
Methods of accounting
some major economic activities
1. Method of
accounting fixed asset-sale and liquidation operations:
- Recording as
decrease liquidated and sold fixed assets:
Debit in Account 214
- Wear of fixed assets (The value of wear)
Debit in Account 811
- Other expenses (Residual value)
Credit in Account 211
- Tangible fixed asset (Historical cost)
Credit in Account 213
- Intangible fixed assets (Historical cost).
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Debit in Account 811
- Other expenses
Debit in Account 133
- Deducted VAT (if any)
Credit in Accounts
111, 112, 141, 331 � (Total payment
price).
- Reflecting other
incomes from fixed assets liquidation and sale:
+ For enterprises
paying VAT by the deduction method, record:
Debit in Accounts
111, 112 and 131 (Total payment price)
Credit in Account 711
- Other incomes (Incomes without VAT)
Credit in Account
3331 - Payable VAT.
+ For enterprises
paying VAT by the direct method, for incomes from fixed asset liquidation and
sale, record:
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Credit in Account 711
- Other incomes (Total payment price).
- Recording payable
VAT amounts calculated by the direct method,:
Debit in Account 711
- Other incomes
Credit in Account
3331 - Payable VAT.
2. Reflecting fines
collected from customers for their contractual breaches:
- When collecting
fines from customers for their breaches of economic contracts, record:
Debit in Accounts
111, 112�
Credit in Account 711
- Other incomes.
- For cases where the
units which have paid escrows or deposits breach economic contracts already
signed with the enterprises are fined according to the agreement in economic
contracts:
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Debit in Account 338
- Other payables and remittables (for short-term escrows and deposits)
Debit in Account 344
- Receipt of long-term escrows and deposits (for long-term escrows and
deposits)
Credit in Account 711
- Other incomes.
l When actually
returning escrows and deposits to the depositors, record:
Debit in Accounts 338
and 344 (With fines already deducted) (if any)
Credit in Accounts
111 and 112.
3. Reflecting
insurance indemnities paid by insurance organizations, record:
Debit in Accounts
111, 112�
Credit in Account 711
- Other incomes.
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Debit in Account 811
- Other expenses
Debit in Account 133
- Deducted VAT (if any)
Credit in Accounts
111, 112, 152�
4. Accounting of bad
receivables which had been written off but now collected
- When there are
decisions permitting the remission of bad receivable debts which are
irrecoverable, record:
Debit in Account 139
- Reserve for bad receivables
Debit in Account 642
- Enterprise management costs (The difference between the bigger bad receivable
debts already written off and the reserve already set up)
Credit in Account 131
- Receivables from customers.
Concurrently debit
Account 004 "Bad debts already handled."
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Debit in Accounts
111, 112�
Credit in Account 711
- Other incomes.
Concurrently credit
Account 004 "Bad debts already handled."
5. For payable debts
which creditors do not claim and are included in other incomes, record:
Debit in Account 331
- Payables to sellers; or
Debit in Account 338
- Other payables and remittables.
Credit in Account 711
- Other incomes
6. For cases of
reduction and reimbursement of payable VAT:
- If the reduced VAT
amounts are subtracted from the VAT amounts payable in the period, record:
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Credit in Account 711
- Other incomes.
- If the VAT amounts
are reimbursed in cash from the State budget, record:
Debit in Accounts
111, 112�
Credit in Account 711
- Other incomes.
7. For previous years� business incomes
which had been omitted or forgotten to be recorded in the accounting books and
now found out, record:
Debit in Accounts
111, 131�
Credit in Account 711
- Other incomes.
8. At the end of the
accounting period, to transfer other incomes arising in the period into Account
911 "Determination of business results" and record:
Debit in Account 711
- Other incomes
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8. To amend and
supplement the content of class-8 account - Other expenses
This class of
accounts reflects expenses for activities other than turnover-generating
production and business activities of the enterprises.
Other expenses are
losses caused by events or operations which are separate from normal activities
of the enterprises; or possibly expenses omitted in the previous years.
In the period this
class of accounts always reflects amounts arising in the Debit side, which, at
period-end, are transferred into Account 911 "Determination of business
results," and has no balance.
Class-8 account -
Other expenses, consists of 01 account:
- Account 811 - Other
expenses
- This account
reflects expenses for events or operations separate from normal activities of
the enterprises.
Other expenses that
are incurred include:
- Expenses for fixed
assets liquidation and sale and residual value of liquidated and sold fixed
assets (if any);
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- Tax fines, tax
amounts that are retrospectively collected.
- Expenses that are
wrongly accounted or omitted when recording accounting books;
- Other expenses.
Structure and content
of reflection of account 811 - other expenses
The Debit side:
Other expenses that
are incurred.
The Credit side:
At the end of the
accounting period, to transfer all other expenses incurred in the period to
Account 911 "Determination of business results."
Account 811 shall
have no period-end balance.
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1. When other
expenses are incurred, such as expenses for overcoming losses caused by risks
in business activities (typhoons, floods, fires, explosions), record:
Debit in Account 811
- Other expenses
Credit in Accounts
111, 112, 141�
2. Methods of
accounting fixed asset sale and liquidation operations:
- Collecting proceeds
from the fixed asset sale and liquidation:
Debit in Accounts
111, 112 and 131
Credit in Account 711
- Other incomes
Credit in Account
3331 - Payable VAT (33311)(if any).
- Reflecting the
residual value of fixed assets and recording as decrease sold or liquidated
fixed assets used in production and business, record:
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Debit in Account 811
- Other expenses (Residual value)
Credit in Account 211
- Tangible fixed asset (Historical cost)
Credit in Account 213
- Intangible fixed assets (Historical cost).
- Expenses incurred
for fixed asset sale and liquidation activities:
Debit in Account 811
- Other expenses
Debit in Account 133
- Deducted VAT (1331)(if any)
Credit in Accounts
111, 112, 141�
3. Where the
tax-paying enterprises make mistakes in the declaration of export goods and
have to pay tax arrears for one year, counted retrospectively from the date of
checking and detection of such mistakes, for the export tax amount to be
retrospectively collected, record:
Debit in Account 511
- Turnover from goods sale and service provision (if turnover from export goods
is generated in the fiscal year)
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Credit in Account
3333 - Export and import taxes (Details of export tax).
4. For accounting
fines for breaches of economic contracts, tax fines and retrospectively-collected
tax amounts, record:
Debit in Account 811
- Other expenses
Credit in Accounts
111 and 112; or
Credit in Account 333
- Taxes and remittables to the State
Credit in Account 338
- Other payables and remittables.
5. At the end of the
accounting period, to transfer all other expenses incurred in the period to
determine business results, and record:
Debit in Account 911
- Determination of business results
Credit in Account 811
- Other expenses.
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a/ At the end of the
accounting period, the enterprises accountants shall base themselves on the
receivable debts which have been determined as uncertain to be recovered (Bad
receivable debts) to compute and determine the bad receivable reserve to be set
up. If the bad receivable reserve to be set up in the current year is bigger
than the unused balance of the bad receivable reserve set up at the end of the
previous accounting period, the bigger difference shall be accounted as cost,
record;
Debit in Account 642
- Enterprise management costs
Credit in Account 139
- Bad receivable reserve.
b/ If the bad
receivable reserve to be set up in the current year is smaller than the unused
balance of the bad receivable reserve set up at the end of the previous
accounting period, the difference shall be re-included and recorded as cost
decrease, record;
Debit in Account 139
- Bad receivable reserve
Credit in Account 642
- Enterprise management costs (Details of amounts re-included into the bad
receivable reserve).
c/ For bad receivable
debts which have been determined as irrecoverable, they shall be allowed to be
written off. The remission of bad receivables must comply with the current
financial regime. On the basis of the decisions to write off bad receivable
debts, record:
Debit in Account 139
- Bad receivable reserve (if such reserve has been set up)
Debit in Account 642
- Enterprise management costs
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Credit in Account 138
- Other receivables.
Concurrently debit
Account 004 "Bad debts already handled" (Off-balance sheet account).
d/ For bad
receivables already written off, if they are later recovered, accountants shall
base themselves on the actual value of recovered debts to record:
Debit in Accounts 111
and 112
Credit in Account 711
- Other incomes.
Concurrently credit
Account 004 "Bad debts already handled" (Off-balance sheet account).
V.
GUIDANCE ON AMENDMENTS AND SUPPLEMENTS TO THE FINANCIAL REPORT REGIME
1. The accounting
balance sheet
To supplement Section
V - Criterion "Prepaid long-term expenses" to Part B "Fixed
assets, long-term investments" (Code 241).
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Data to be recorded
in the criterion "Prepaid long-term expenses" shall be based on the
Debit balance of Account 242 "Prepaid long-term expenses" at the end
of the reporting period.
The form of
"Accounting balance sheet," after being revised and supplemented, is
prescribed in Appendix No. 01 to this Circular.
2. Business result
reports
To supplement and
revise Part I - Profits and losses, of business result reports - B02-DN (issued
together with Decision No. 167/2000/QD-BTC of October 25, 2000 of the Finance
Ministry).
2.1. Forms
Part I - Profits and
losses, of business result reports - B02 -DN is prescribed in form B02-DN
below:
The Ministry,
Corporation:.
Unit:.
FORM
B02 -DN
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Quarter Year
Part I - Profits,
losses
Criteria
Code period
This period
Last
Accrued amount from the beginning of the
year
1
2
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4
5
Turnover
from goods sale and service provision
01
Reductions
(03 = 04+05+06+07)
03
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- Trade discounts
04
-
Reductions of the price of goods sold
05
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-
Returns of goods sold
06
- Special
consumption tax, export tax, payable VAT calculated by the direct method
07
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1.
Net turnover from goods sale and service provision (10 = 01 - 03)
10
2.
Cost of goods sold
11
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3.
Gross profits from goods sale and service provision (20 = 10 -11)
20
4
Turnover from financial activities
21
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5.
Financial expenditures
- In
which: Payable loan interests
22
23
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24
7. Enterprise management costs
25
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[30 =
20 + (21-22) - (24+25)]
30
9.
Other incomes
31
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10.
Other expenses
32
11.
Other profits (40 = 31-32)
40
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12.
Total pre-tax profits (50 = 30+40)
50
13.
Payable enterprise income tax
51
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14.
After-tax profits (60=50-51)
60
2.2 Part on
explanation of the form
Results of business
activities
Part I - Profits,
losses:
a/ Reporting content:
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All criteria in this
part demonstrate: Total amounts arising in the reporting period; data of the
previous period (for comparison); and accrued amounts from the beginning of the
year till the end of the reporting period.
b/ Sources of
reporting data:
- The previous period’s reports on the
results of business activities.
- Accounting books in
the period, which are used for accounts of classes 5 to 9.
c/ Content and method
of establishing criteria in the reports on the results of business activities
Data recorded in
column 4 (Last period) of Part I "Profits, losses" of the current
period�s reports shall be
based on the data recorded in column 3 (This period) of this report of the
previous period according to each relevant criterion.
Data recorded in
column 5 (Accrued amount from the beginning of the year) of Part I
"Profits, losses" of the current period’s report on the results of business
activities shall be based on the data recorded in column 5 (Accrued from the
beginning of this year) of this report of the previous period plus (+) data
recorded in column 3 (This period). The achieved results shall be recorded in
column 5 of this report of the current period according to each relevant
criterion.
The content and
method of establishing criteria to be inscribed in column 3 (This period) of
Part I "Profits, losses" of the Report on the results of business
activities in the current period are as follows:
Part I - Profits,
losses
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This criterion
reflects total turnover from the sale of goods and finished products and the
provision of services in the enterprises reporting period.
Data to be recorded
in this criterion are accrued amounts arising in the Credit side of Account 511
"Turnover from goods sale and service provision" and Account 512
"Internal turnover" in the reporting period.
Reductions (Code 03)
This criterion
reflects comprehensively amounts recorded as decrease in total turnover in the
period, including: trade discounts, reductions of the price of goods sold,
returns of goods sold, special consumption tax, export tax, payable VAT
calculated by the direct method, which must be corresponding to the turnover
already determine in the reporting period.
Code 03 = Code 04 +
Code 05 + Code 06 + Code 07.
Trade discounts (Code
04):
This criterion
reflects total trade discounts granted to the buyers of the enterprises� goods for the
quantities of goods, finished products and services already sold in the
reporting period.
Data to be recorded
in this criterion shall be based on the amounts arising in the Credit side of
Account 521.
Reductions of the
price of goods sold (Code 05):
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Data to be recorded
in this criterion are accrued amounts arising in the Credit side of Account 532
"Reductions of the price of goods sold" in the reporting period.
Returns of good sold
(code 06):
This criterion
reflects the total selling price of the quantities of goods and finished
products returned in the reporting period.
Data to be recorded
in this criterion are accrued amounts arising in the Credit side of Account 531
"Returns of goods sold" in the reporting period.
Payable special
consumption tax, export tax and VAT calculated by the direct method (Code 07):
This criterion
reflects total special consumption tax or export tax, VAT calculated by the
direct method to be paid into the State budget according to the turnover
generated in the reporting period.
Data to be recorded
in this criterion are the sum of amounts arising in the Credit side of Account
3332 "Special consumption tax," Account 3333 "Export and import
taxes," (Details of the export tax), corresponding to the Debit side of
Accounts 511 and 512; and amounts arising in the Credit side of Account 3331
"Payable VAT" corresponding to the Debit side of Account 511 in the
reporting period.
Net turnover from
goods sale and service provision (Code 10):
This criterion
reflects turnover from the sale of goods and the finished products and the
provision of services after subtracting reductions (trade discounts, reductions
of the price of goods sold, returns of goods sold, special consumption tax,
export tax, and VAT calculated by the direct method) in the reporting period,
which shall serve as basis for calculating the results of business activities
of the enterprises.
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Cost of goods sold
(Code 11):
This criterion
reflects total cost of goods, production cost of finished products already
sold, direct expenses of services already provided, other expenses calculated
into or recorded as decrease in the cost of goods sold in the reporting period.
Data to be recorded
in this criterion are accrued amounts arising in the Credit side of Account 632
"Cost of good sold" in the reporting period, corresponding to the
Debit side of Account 911 "Determination of business results."
Gross profits from
goods sale and service provision (Code 20):
This criterion
reflects the difference between net turnover from goods sale and service
provision and the cost of goods sold arising in the reporting period.
Code 20 = Code 10 -
Code 11.
Turnover from
financial activities (Code 21):
This criterion
reflects net turnover from financial activities (Total turnover minus (-) VAT
calculated by the direct method (if any) related to other activities) arising
in the enterprises reporting period.
Data to be recorded
in this criterion are accrued amounts arising in the Debit side of Account 515
"Turnover from financial activities", corresponding to the Credit
side of Account 911 in the reporting period.
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This criterion
reflects total financial expenditures, including payable loan interests,
expenses for copyright, expenses for joint-venture activities � arising in the
enterprises reporting period.
Data to be recorded
in this criterion are accrued amounts arising in the Credit side of Account
635, corresponding to the Debit side of Account 911 in the reporting period.
Payable loan
interests (Code 23):
This criterion
reflects expenses for payable loan interests calculated into financial
expenditures in the reporting period.
Data to be recorded
in this criterion shall be based on accounting books detailing Account 635.
Sale costs (Code 24):
This criterion
reflects total sale costs allocated to the quantities of goods, finished
products and services already sold in the reporting period.
Data to be recorded
in this criterion are the sum of amounts arising on the Credit side of Account
641 "Sale costs" and amounts arising in the Credit side of Account
1422 "Expenses awaiting transfer" (details of the sale costs),
corresponding to the Debit side of Account 911 "Determination of business
results" in the reporting period.
Enterprise management costs
(Code 25):
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Data to be recorded
in this criterion are the sum of amounts arising on the Credit side of Account
642 "Enterprise management costs" and amounts arising in the Credit
side of Account 1422 "Expenses awaiting transfer" (details of enterprise
management costs), corresponding to the Debit side of Account 911
"Determination of business results" in the reporting period.
Net profits from
business activities (Code 30):
This criterion
reflects the results of business activities of the enterprises in the reporting
period. This criterion is calculated on the basis of gross profits from goods
sale and service provision plus (+) turnover from financial activities minus
(-) financial expenditures, sale costs and enterprises management costs
allocated to the quantities of goods, finished products and services already
sold in the reporting period.
Code 30 = Code 20 +
Code 21 - (Code 22 + Code 24 + Code 25).
Other incomes (Code
31):
This criterion
reflects other incomes (less payable VAT calculated by the direct method)
arising in the reporting period.
Data to be recorded
in this criterion are based on amounts arising on the Debit side of Account 711
"Other incomes," corresponding to the Credit side of Account 911
"Determination of business results" in the reporting period.
Other expenses (Code
32):
This criterion
reflects other expenses.
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Other profits (Code
40):
This criterion
reflects the difference between other incomes (less payable VAT calculated by
the direct method) and other expenses in the reporting period.
Code 40 = Code 31 -
Code 32.
Total pre-tax profits
(Code 50)
This criterion
reflects total profits achieved in the enterprises� reporting period
before subtracting enterprise income tax on business activities and other
activities arising in the reporting period.
Code 50 = Code 30 +
Code 40.
Payable enterprise
income tax (Code 51):
This criterion
reflects total enterprise income tax payable in the reporting period.
Data to be recorded
in this criterion are based on amounts arising on the Credit side of Account
3334 "Enterprise income tax minus (-) the enterprise income tax amounts
reduced from the payable tax amount and the positive difference between the
temporarily-paid enterprise income tax amount according to the quarterly
notices of the tax offices and the actual payable enterprise income tax amount
when the tax settlement reports are approved.
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This criterion
reflects total net profits from the enterprises activities after subtracting
the payable enterprise income tax amount arising in the reporting period.
Code 60 = Code 50 -
Code 51.
3. Explanation of
financial statements
The model explanation
of financial statements, after being revised (see Appendix 2)
On the basis of the
four accounting standards issued together with the Finance Minister�s Decision No.
149/2000/QD-BTC of December 31, 2001, explanations of financial statements
(form B09-DN) are explained and have some criteria revised and supplemented as
follows:
a/ To supplement
Section 3.2 "A number of detailed criteria regarding inventory" in
the explanation of financial statements (form B09-DN) related to the accounting
standard "Inventory":
- Original cost of
total inventory;
- Value re-included
into the inventory price decrease reserve in the period;
- Cases or events
leading to the addition to or re-inclusion of the inventory price decrease
reserve;
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b/ To explain, revise
and supplement the following criteria in the explanation of financial
statements (form B09-DN) related to the accounting standard "Tangible
fixed asset" and the accounting standard "Intangible fixed
assets."
- The first em rule
of Section 2.4 in the explanation of financial statements is revised as:
"Principles for determining the historical cost of tangible fixed asset
and intangible fixed assets."
- The second em rule
of Section 2.4 in the explanations of financial statements is revised as
:"Depreciation method, useful life or depreciation rate of tangible fixed
asset and intangible fixed assets."
- Section 3.3
"Situation of increase and decrease of fixed assets" in the
explanation of financial statements presents further the following criteria:
+ Residual value of
tangible fixed asset and intangible fixed assets already mortgaged or pledged
as security for loans;
+ Residual value of
tangible fixed asset and intangible fixed assets temporarily not in use;
+ Historical cost of
fully depreciated tangible fixed asset and intangible fixed assets still in
use;
+ Residual value of
tangible fixed asset and intangible fixed assets awaiting liquidation;
+ Initially
recognized reasonable value, accrued depreciation value, residual value of
intangible fixed assets granted by the State;
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+ Reasons for
intangible fixed assets to be depreciated for more than 20 years;
+ Other changes in
tangible fixed asset and intangible fixed assets.
c/ To supplement a
number of criteria to Section 4 in the explanation of financial statements
(form B09-DN) related to the accounting standard "Turnover and other
incomes."
- Turnover from the
sale of products and goods:
In which: turnover from
exchange of products and goods
- Turnover from
service provision:
In which: turnover
from exchange of services
- Deposit interests,
loan interests, yields from investment in bonds and bills.
- Profits from the
sale of foreign exchange and from exchange rate difference;
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- Enjoyed payment
discounts;
- Dividends and
distributed profits;
- Other financial
turnover.
VI.
IMPLEMENTATION PROVISIONS
1. This Circular
takes implementation effect from the fiscal year of 2002. All previous
regulations contrary to this Circular are hereby annulled; other accounting
matters not guided in this Circular shall comply with the current enterprise
accounting regime.
2. If there are
provisions in the accounting standards, which different from the Finance
Ministry�s guidance on the
financial regulations and business cost-accounting of the enterprises, such
provisions and the guidance in this Circular shall be complied with.
3. The companies and
corporations that have specific accounting regimes already approved by the
Ministry of Finance must base themselves on 04 accounting standards issued
together with Decision No. 149/2001/QD-BTC and this Circular to issue appropriate
guidelines and supplements.
4. The ministries,
the People’s Committees, the
Finance Services and the Tax Departments of the provinces and centrally-run
cities shall have to guide the enterprises in implementing this Circular. Any
problems arising in the course of implementation should be reported to the
Ministry of Finance for study and settlement.
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FOR THE FINANCE MINISTER
VICE MINISTER
Tran Van Ta