MINISTRY OF FINANCE Decision 15/2006/QD-BTC PREFACE Accompanying with twenty-two Vietnamese Accounting Standards that have

been released, the Ministry of Finance issued a comprehensive set of accounting system the Decision 15/2006/QD-BTC the Decision 15 applied for all business entity including the foreign invested companies doing business in Vietnam. Wishing to convey these regulations to foreign investors existing and future in Vietnam and also the interested professionals abroad, we, KTC Assurance & Business Advisors, have obtained approval and assistance from the Department of Accounting and Auditing Policy of the Ministry of Finance to make an unofficial translation of these regulations into English. The book is structured as follows: Part I Part II Part III Part IV Appendix I Appendix I : Chart of Accounts : Financial statements : Accounting documents : Accounting books and forms : Accounting flow charts : Accounting law

KTC Assurance & Business Advisors is a professional accounting firm committed to providing high quality service to our clients. At KTC, we are focusing on providing value added services which bring to our client practical and cost-effective solutions to their business issues. We have cost-effective office in Hanoi and a representative office in Ho Chi Minh City. Our translation and edition team is led and reviewed by highly qualified specialists, including Noli Encarnacion, Long Duc Ngo, Hung Duy Pham, Linh Thuy Do and Anh Van Thai who have practices from ten to twenty years experience in accounting practices in Vietnam and overseas. Since this is the first edition being published, we would be much appreciated to receive any advice or comments from our readers for our continuous improvements. KTC Assurance & Business Advisors would like to express sincere thanks to the Department of y Accounting and Auditing Policy of the Ministry of Finance, especially Professor Bui Van Mai for his kind assistance and encouragement. Our sincere thanks are also expressed to our other committed and hard-working team members, namely Tam Thanh Hoang, Huong Dieu Le, Hong Bich Nguyen, Toan Duy Nguyen, Hien Luong Thu, Tam Thanh Phan, Mai Anh Phan and Lan Thi Van. While every effort has been made to ensure that the translation reflects the form and spirit of the Decision 15, KTC accepts no responsibility for any loss and/or damage resulted from your reliance on this translation. Further inquiries and/or advice on this publication should be addressed to: KTC Assurance & Business Advisors Suite 237, 33A Pham Ngu Lao Hoan Kiem, Hanoi, Vietnam URL: www.ktcvietnam.com. Telephone: +84-4-933 4057 Email: ktc@ktcvietnam.com Att: Linh Thuy Do Mrs

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC

MINISTRY OF FINANCE No. 15/2006/Q -BTC

SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom – Happiness Hanoi, 20 March 2006

DECISION on promulgation of the Corporate Accounting System THE MINISTER OF FINANCE Pursuant to the Accounting Law No. 03/2003/QH11 dated 17 June 2003 and Decree No. 129/2004/N -CP dated 31 May 2004 of the government detailed stipulating and guiding the implementation of some regulations of Accounting Law on business activities; Pursuant to the Decree No. 77/2003/N -CP dated 1 July 2003 of the Government stipulating the function, responsibility, right and organizational structure of the Ministry of Finance; organizational Upon the proposal of the Director of the Accounting and Auditing Policy Department and the Accounting Chief Officer of the Ministry of Finance DECIDES Article 1: Promulgate the Enterprise Accounting System applicable to enterprises in all fields : of business and economic sectors. The Enterprise Accounting System includes: Enterprise Part 1: Chart of accounts Part 2: Financial Statements Part 3: Accounting Documents Part 4: Accounting Books Article 2: Entrepreneurs, companies, corporations based on the Corporate Accounting System : study, tailor and set up their accounting system with detailed contents and application met the business features as well as management requirements of each business field, economic sector. Any amendment or supplement to class 1 and class 2 sub-accounts or amendment on presentation of financial statements should be allowed by the Ministry of Finance in official documents. In compliance with stipulations of this Corporate Accounting System and guiding documents of Corporate apply higher authorities, entity should study and appl chart of accounts, documents, accounting books and type of accounting books met the business features, management requirements and accounting quality of the enterprise. Article 3: This Decision comes in to effect 15 days from the gazette day. Only the regulation of Preparation of interim consolidated financial statements in the Point 4 Responsibility of preparing and disclosure of financial statements , Item I/A Part Two is applicable from the year of 2008. This Decision replaces the Decision No. 1141TC/QDD/C KT dated 1 November 1995 of the Minister of Finance promulgating the Corporate Accounting System , Decision No. 167/2000/Q -BTC dated 25 October 2000 of the Minister of Finance issuing Enterprise Financial Statements System and Decrees of No. 10TC/C KT dated 20 March 1997 Guidance on amendment, supplement of Corporate Accounting System ; Decree No. 33/1998/TT-BTC dated 17 March 1998 Guidance on making and using of provision for obsolete stock, provision for doubtful debt, provision for price reduction of securities in State owned enterprises ; Decree
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC No.77/1998/TT-BTC dated 6 June 1998 Guidance on exchange rate of foreign currency to Vietnamese Dong in accounting record of enterprises ; Decree No.100/1998/TT-BTC dated 15 July 1998 Guidance on accounting for Value Added Tax and Enterprise Income Tax ; Decree No.180/1998/TT-BTC dated 26 December 1998 Supplemented guidance on accounting for Value Added Tax ; Decree No.186/1998/TT-BTC dated 28 December 1998 Guidance on accounting for export, import, special consumption tax ; Decree No.107/1999/TT-BTC dated 1 September 1999 Guidance on accounting for Valued Added Tax on financial lease ; Decree No. 120/1999/TT-BTC dated 7 October 1999 Guidance on amendment, supplement of Enterprise Accounting System ; Decree No.54/2000/TT-BTC dated 7 June 2000 Guidance on accounting for sale of goods at subsidiaries of dependent accounting in other locations ad through commission agents . Article 4: All regulations in Decisions of promulgation of Vietnamese Accounting Standards and namese Circulars of guidance on implementation of Vietnamese Accounting Standards from batch 1 to 5 which do not conflict with this Decision are still on effect. : Article 5: Ministries, ministry-like offices, People s Committees of provinces and centrally controlled cities are responsible for guiding; developing the application of Corporate Accounting developing System promulgated in compliance with this Decision in dependent units or authorized area. Decision : Article 6: Director of Accounting and Auditing Policy Department, Chief of Ministry s Offices, Director of the Enterprise Finance Department, Director of the General Department of Tax and Director Head of related Departments of Ministry of Finance are responsible for guidance, monitor and Finance implementation of this Decision.

For the Minister of Finance Vice Minister signed Tran Van Ta

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC

PART I CHART OF ACCOUNTS

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC I. GENERAL REGULATIONS 1. Chart of accounts is used to classify and systemize the economic transactions by their nature. Chart of accounts applied for business entities consists of class 1 and class 2 sub-accounts, balance sheet accounts and off balance sheet accounts. 2. Entrepreneurs, companies and corporations based on the Corporate Accounting System , study, tailor and set up their accounting system with detailed contents and application met the business features as well as management requirements of each business field, economic sector. 3. Any amendment or supplement to class 1 and class 2 sub-accounts or amendment on their title or codes or accounting treatment for specific transactions should be approved by the Ministry of Finance in written. are 4. Entrepreneurs, companies and corporations are allowed to open sub-accounts for class 2 and 3 of which are not regulated in the chart of accounts given by this Decision. The business r entity doesn t have to apply for approval of the Ministry of Finance for these types of subaccounts.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC II. CHART OF ACCOUNTS APPLIED FOR BUSINESS ENTITIES Code Class 1 Class 2 2 3

No. 1

NAME OF ACCOUNTS 4 CATEGORY 1 CURRENT ASSETS Cash on hand Vietnam dong Foreign currency Gold, silver, gemstones Cash in bank

NOTE 5

01

111 1111 1112 1113

02

112 1121 1122 1123

Maintain in details

Vietnam dong Foreign currency Gold, silver, gemstones Cash in transit

03

113 1131 1132

Vietnam dong Foreign currency Short term investment Equity securities Debt securities Other short-term investments Short-term deposits Other short-term investment Provision for short-term investments Account receivable-trade Deductible value added tax Maintain in details

04

121 1211 1212

05

128 1281 1288

06 07 08

129 131 133 1331 1332

Deductible VAT of merchandises and services Deductible VAT of fixed assets Inter-company receivables Investment in subsidiary Other inter-company receivables
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136 1361 1368

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Code Class 1 Class 2 2 3 138 1381 1385 1388 11 12 13 14 15 139 141 142 144 151

No. 1 10

NAME OF ACCOUNTS 4 Other receivables Shortage of assets awaiting resolution Receivable from equitisation Other receivable Provision for doubtful debts Advances to suppliers Prepaid expenses Short-term deposits, collateral Goods in transit

NOTE 5

Maintain in details

mortgages

and

16 17 18 19 20

152 153 154 155 156 1561 1562 1567

Raw materials Tools and supplies Work in process Finished goods Merchandise goods Purchase costs Collection costs Property/real estate Goods on consignment Goods in bonded warehouse

Maintain in details upon management requirement

21

157

22 23 24

158 159 161 1611 1612

For entity having goods imported and exported in bonded warehouse

Provision for obsolete stock Expenditures from subsidies of State Budget Prior year budget Current year budget CATEGORY 2 NON-CURRENT ASSETS

25

211 2111 2112

Tangible assets Buildings & structures Machinery and equipment
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Code Class 1 Class 2 2 3 2113 2114 2115 2118 26 27 212 213 2131 2132 2133 2134 2135 2136 2138 28 214 2141 2142 2143 2147 29 30 31 32 33 217 221 222 223 228 2281 2282 2288 34 35 229 241 2411 2412 2413 36 37 38 242 243 244

No. 1

NAME OF ACCOUNTS 4 Transportation and facilities Office equipment Perennial trees, working and producing animals Other tangible assets Finance lease assets Intangible assets Land Use rights Mastheads and publishing titles Copy rights, patents Brand names Computer software Licenses and franchises Other intangible assets Accumulated depreciation amortization

NOTE 5

and

Accumulated depreciation on fixed assets Accumulated depreciation on finance lease assets Amortization of intangible assets Amortization of investment property Investment property Investment in subsidiaries Shares in joint ventures Investment in associates Other long-term investments Equity securities Debt securities Other long-term investments Provision for long-term investments Construction in progress Acquisition of fixed assets Construction in progress Extraordinary repairs Long-term prepaid expenses Deferred tax assets Long-term deposits CATEGORY 3
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Code Class 1 Class 2 2 3 311 315 331 333 3331 33311 33312 3332 3333 3334 3335 3336 3337 3338 3339 43 334 3341 3342 44 45 335 336

No. 1 39 40 41 42

NAME OF ACCOUNTS 4 LIABILITIES Short-term loan Current portion of long-term loan Trade payables Tax and statutory obligations VAT Output VAT Import VAT Special consumption tax Import, export duties Profit tax Personal Income tax Natural resource tax Land and housing tax Other taxes payable Fees, duties and other obligations Payables to employees Payable to employee salary Other payable to employees Accruals Inter-company payables

NOTE 5

Maintain in details

46 47

337 338 3381 3382 3383 3384 3385 3386 3387 3388

For construction contract in which Contraction contractor payables based on payment made by agreed progress billing progress Other payables Surplus of assets waiting for resolution Trade union fees Social insurance payable Health insurance payable Payable from equitization applicable to privatized SOEs only Receipt of deposits and pledges Deferred income Other payables Long-term loans Long-term payable Bond issued Bond cost
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48 49 50

341 342 343 3431

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Code Class 1 Class 2 2 3 3432 3433 51 52 53 54 344 347 351 352

No. 1

NAME OF ACCOUNTS 4 Bond discount Bond premium Long-term deposits received Deferred tax liabilities Provision for severance allowance Provisions CATEGORY 4 OWNERS EQUITY

NOTE 5

55

411 4111 4112 4118

Paid-in capital Share capital Capital surplus Share premium Other capital Asset revaluation reserve Foreign exchange differences Foreign exchange differences at balance sheet date Foreign exchange differences construction period Investment and development fund Financial reserve fund Other funds under

For joint stock entity

56 57

412 413 4131 4132

58 59 60 61 62

414 415 418 419 421 4211 4212

63

431 4311 4312 4313

64

441

Treasury share Undistributed earnings Prior year earnings Current year earnings Bonus and welfare funds Bonus funds Welfare funds Social benefit fund in form of fixed assets Investment in capital construction

For joint stock entity

65

461 4611 4612

Subsidy funds from State Budget Prior year Current year

For SOEs For companies, groups & corporations

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Code Class 1 Class 2 2 3 466

No. 1 66

NAME OF ACCOUNTS 4 Sources for acquisition of fixed assets

NOTE 5

CATEGORY 5: REVENUES 67 511 5111 Sales Sales of merchandise Maintain in details upon management requirement

5112 5113 5114 5117 68 512 5121 5122 5123 69 70 71 72 515 521 531 532

Sales of products Service revenues Revenue from subsidies Sales from property investment Inter-company revenue Sales of merchandise Sales of products Service revenues Financial income Sales discounts Sales returns Sales allowances CATEGORY 6 PRODUCTION COSTS AND COST

Sales to subsidiaries

73

611 6111 6112

Purchases Purchases of raw material Purchases of merchandise Raw material costs Direct labor costs Machine costs 6231 Labor costs 6232 Use of auxiliary materials 6233 Use of tools and supplies

Applied for periodic inventory method

74 75 76

621 622 623 6231 6232 6233

For construction contractor

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Code Class 1 Class 2 2 3 6234 6237 6238 77 627 6271 6272 6273 6274 6277 6278 78 79 80 81 631 632 635 641 6411 6412 6413 6414 6415 6417 6418 82 642 6421 6422 6423 6424 6425 6426 6427 6428

No. 1

NAME OF ACCOUNTS 4 6234 Depreciation 6237 Service rental Sundry cash expenses Factory overhead costs Indirect labour Use of auxiliary materials Use of tools and supplies Depreciation Services rendered Sundry cash expenses Cost of products manufactured Cost of goods sold Financial expenses Selling expenses Sales salary expenses Packaging and indirect materials Consumable and office supplies Depreciation Warranty expenses Rendered services Sundry cash expense General and administration expenses Office salaries Consumable and office supplies Office supplies Depreciation Taxes, fees and charges Expenses from provisions Services rendered by outsiders Sundry cash expenses CATEGORY 7 OTHER INCOME

NOTE 5

Periodic inventory method

83

711

Other income CATEGORY 8 OTHER EXPENSES

Maintain in details

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Code Class 1 Class 2 2 3 811 821 8211 8212

No. 1 84 85

NAME OF ACCOUNTS 4 Other expenses Enterprise Income Tax Current income tax Deferred income tax CATEGORY 9 INCOME SUMMARY

NOTE 5 Maintain in details

86

911

Income summary CATEGORY 10 OFF BALANCE SHEET ACCOUNTS

001

Operating lease assets Maintain in details upon management requirement

002 003 004 007 008

Goods held under trust or for processing Goods received on consignment for sale Bad debts written off Multi-foreign currencies Subsidies of State Budget

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC III. CONTENT AND RECORDING METHOD ACCOUNTING DOCUMENTS CATEGORY I CURRENT ASSETS This account records both the balance and movements of the current assets in a business. Current assets are those assets owned by the enterprise and their benefits are fully realised within one year or within the company s business cycle. Current assets may be cash, inventory, short term investments and other receivables. Current assets of the business include: cash, short term investments, receivables, inventories, and itures other current assets. It also includes expenditures from subsidies of the State Budget. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. When accounting for current assets, the accountant must comply with those regulations stated for each individual current asset including cash, short term investments, receivables, short term deposit, inventories. 2. Short term investments, receivables and inventory should be recorded at cost. However, at the end of the fiscal year these accounts must be re-valued at the lower of cost or market value re-valued net realisable value . Provision for the decline in the value of inventory, receivables and investments are recorded inventory, in their respective provision accounts and may not be netted against the respective current asset. The provision accounts are used to adjust the value of a current asset to the lower of cost or value market value for presentation in the balance sheet. Current assets have 24 accounts which are classified into six groups: Group 11 – Cash is composed of three accounts: Account 111 Account 112 Account 113 Cash on hand Cash in bank Cash in transit

Group 12 – Short term investments are composed of three accounts: Account 121 Account 128 Account 129 Short term investment Other short term investment Provision for short term investment

Group 13 – Receivables are composed of five accounts: Account 131 Account 133 Account 136 Account 138 Account 139 Accounts receivable trade VAT deductible Inter-company receivable Other receivable Provision for doubtful debts
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC

Group 14 – Advances are composed of three accounts: Account 141 Account 142 Account 144 Advances Prepaid expenses Short term deposits

Group 15 – Inventory is composed of nine accounts: Account 151 Account 152 Account 153 Account 154 Account 155 Account 156 Account 157 Account 158 Account 159 Goods in transit Raw materials Tools and supplies Work in progress Finished goods Merchandise inventory Goods on consignment Goods in bonded warehouse Provision for obsolete stock

Group 16 – Expenditure from subsidies of State Budget is composed of one account: Account 161 Expenditure from subsidies of State Budget

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC GROUP 11 CASH The cash account records both the balance and movements of cash of the entity including: cash on hand, cash in banks and cash in transit. ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Cash must be accounted for in VND, except for being authorized to use another common currency. 2. For entities which enter into foreign currency transaction, the foreign currency must be converted into VND using the exchange rate at the date of transaction either the actual exchange rate or the average inter-bank exchange rate ruling on the foreign currency market exchange stipulated by the State Bank of Vietnam at the date of transaction for recording. If the entities buy foreign currency for cash on hand or to deposit at the banks or to settle payment by using VND, the foreign currency must be converted into VND using either buying exchange rate or exchange rate at the date of payment. The entities should record in the those foreign currencies into VND in the credit side of accounts 1112, 1122 at the stipulated exchange rates on account 1112, 1122 using one of following methods: average cost; first in first out; last in - first out; actual cost foreign currency is treated as a special product . converted Foreign currency transaction needs to be converted into VND and also recorded in original currency individually. Differences due to changes in the exchange rate are to be recorded in financial income/ expenses account applying in construction stage and also for enterprise which is operating in construction or account 413 applying for enterprise in pre-operating construction construction stage . The period end balances of foreign currency cash accounts are to be retranslated at the average inter-bank foreign currency rates stipulated by the State Bank of Vietnam as at the balance sheet date. Foreign currencies are also recorded individually in account 007 recorded Off balance sheet accounts . Multi-foreign currencies

3. Gold, silver, precious metals and gemstones may be recorded in the cash account only for the entities that are not in the business of dealing dealing/trading in gold, silver, precious metals and gemstones. A company should maintain detailed records of gold, silver and gemstones and for each item the quantity, weight, quality and value should be maintained. Gold, silver, precious metals and gemstones should be recorded at market price billing price or purchase price . One of four inventory methods may be applied when gold, silver, precious metals and gemstones are sold. Group 11 - Cash is composed of three accounts: - Account 111- Cash on hand - Account 112 Cash in bank - Account 113 Cash in transit

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 111 CASH ON HAND This account records the cash receipts, cash payments and cash balance of the entity including: cash on hand in VND and foreign currencies, gold, silver, precious metals and gemstones. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Only records cash receipts and cash payments of cash on hand and foreign currencies on hand. Receipts are being deposited directly into the bank not through the safe of the entity should not be recorded in debit side of account 111 Cash on hand . Such amounts should be debited to account 113 Cash in transit . 2. Other cash deposits from other entities and pe personal mortgages and collateral must be managed and recorded in the same way as assets of the entity. 3. Upon cash receipts or payments, accountant must issue the official receipt or payment and voucher with signature of receiver, payee and authorized person according to relevant regulations on supporting documents. In special cases, approval for transferring or receiving must be attached. maintaining 4. The cash accountant is responsible for maintaining a cash book to record daily cash receipts receipts and cash disbursements, foreign currency receipts and disbursement in the order of occurrence so that the balance of cash on hand must be calculated at any point in time. 5. The cashier is responsible for managing and controlling cash in and cash out. The cashier compare must perform a cash count on a daily basis and compare the results of the count to the balance per cash book and cash ledger. Any differences must be investigated for reasons by the cash must accountant and cashier and a solution is proposed to resolve the differences. proposed 6. For entities which enter into foreign currency transaction, the foreign currency must be converted into VND using the exchange rate at the date of transaction either the actual exchange rate or the average inter-bank exchange rate ruling on the foreign currency market exchange stipulated by the State Bank of Vietnam at the date of transaction for recording. If the entities buy foreign currency for cash on hand or to deposit at the banks or to settle payments by using VND, the foreign currency mu be converted into VND using either must buying exchange rate or exchange rate at the date of payment. The credit side of account 1112 should be converted into VND using the rate in account 1112 using one of following methods: average cost; first in - first out; last in - first out; actual cost foreign currency is treated as a special product . Foreign currencies are recorded individually in account 007 balance sheet accounts . Multi-foreign currencies Off

7. Gold, silver, precious metals and gemstones may be recorded in the cash accounts for entities which are not in the gold, silver, value metals and gemstones trading/dealing business. For those companies in the business of dealing/trading in gold, silver, precious metals and gemstones, the receipts and dispatches are recorded as inventories. When they are used for payment purpose, they can be recorded as foreign currency.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC STRUCTURE AND CONTENT OF ACCOUNT 111 – CASH ON HAND Debit: Receipts of cash on hand, foreign currency, gold, silver, value metals and gemstones on hand at the company premises. Surplus of cash, foreign currencies, gold, silver, precious metals and gemstones following the stock count and the cash count minute. The gain on foreign exchange difference resulted from revaluation of foreign currencies at the end of period foreign currencies on hand .

-

-

Credit: Payment of cash on hand, foreign currency, gold, silver, precious metals and gemstones on gold, hand at the company premises. Shortage of cash on hand, foreign currencies, gold, silver, precious metals and gemstones on hand following the cash count and stock taking minute. The loss on foreign exchange difference resulted from revaluation of foreign currencies at the end of period foreign currencies on hand .

-

-

Debit balance: Cash on hand, foreign currency, gold, silver, precious metals and gemstones on hand at the premises.

Account 111 has three sub-accounts: Account 1111 Cash in VND: to record the receipts, payments and balance of cash on hand in VND including bank notes at the company's premises. Account 1112 - Cash in foreign currencies: to record the receipts, payments and balance of cash in foreign currencies at the company's premises at equivalent VND Account 1113 Gold, silver, precious metals and gemstones: to record the issued in/out and balance of gold, silver, precious metals and gemstones. MAJOR TRANSACTIONS 1. Receipts cash from the sale of goods and rendering of services: If goods and services are subject to subtraction method VATand the entity pays VAT in subtraction method, the accountant records receipts from sale of goods and rendering of services at price excluding VAT: Dr. 111 Cash on hand total receipts Cr. 3331 VAT payable 33311 Cr. 511 Sales selling price excluding VAT Cr. 512 Inter-company sales selling price excluding VAT
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC

-

If goods and services are not subject to VAT or subject to VAT using direct method, the accountant records receipts from sale of goods and rendering of services at total receipts: Dr. 111 Cash on hand Cr. 511 Sales total receipts Cr. 512 Inter-company sales total receipts

2. Cash receipts from State Budget in term of cash allowances or grants: Dr. 111 Cash on hand Cr. 333 Taxes and statutory obligations 3339 3. Cash receipts from other financial activities, other incomes which are subject to subtraction method VAT and the entity pays VAT in subtrac subtraction method for example receipts of interest from short term investment, long term investment, receipts from disposal and transfer of fixed assets : Dr. 111 Cash on hand total receipts Cr. 3331 VAT payable 33311 Cr. 515 - Financial incomes the receipts excluding VAT Cr. 711 Other incomes the receipts excluding VAT 4. Cash receipts from financial activities, other incomes subject to subtraction method VAT or not subject to VAT and the entity pays VAT using direct method: Dr. 111 Cash on hand Cr. 515 Financial incomes Cr. 711 Other incomes 5. Cash receipts from withdrawals from the bank accounts; from long term loans, short term loans, other in VND or foreign currencies : Dr. 111 Cash on hand 1111, 1112 Cr. 112 Cash at bank 1121, 1122 Cr. 311, 341 6. Cash collection from accounts receivable and other receivables: Dr. 111 Cash on hand 1111, 1112 Cr. 131 Accounts receivable-trade Cr. 136 Inter-company receivables Cr. 138 Other receivables 1388 Cr. 141 - Advances 7. Cash receipts from short term investments, deposits, collateral or mortgage or receipts of repayment of investment: Dr. 111 Cash on hand 1111, 1112 Cr. 121 Short-term investments Cr. 128 Other short-term investments Cr. 138 Other receivables
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 144 Cr. 244 Cr. 228 Short-term deposits, collateral and mortgage Long term deposits Other short-term investments

8. Cash receipts of deposits, mortgages and collaterals in VND or foreign currencies from other entities: Dr. 111 Cash on hand 1111, 1112 Cr. 338 Other payables if short term deposit, collaterals Cr. 344 Long term deposits 9. Surplus of cash on hand resulting from cash count waiting for resolution: Dr. 111 Cash on hand Cr. 338 Other payable 3381 10. Cash receipts of capital contribution: Dr. 111 Cash on hand Cr. 411 Paid in capital 11. Cash on hand deposited to the bank: Dr. 112 Cash in bank Cr. 111 Cash on hand 12. Purchases of short-term and long-term securities in cash or investment in subsidiaries, associates or joint ventures by cash: Dr. 121 Short-term investments Dr. 221 Long term investments Dr. 222 Shares in joint ventures Dr. 223 Investment in associates Dr. 228 Other long term investments Cr. 111 Cash on hand 13. Deposit, collateral or mortgage in other entities by cash: Dr. 144 Short term deposits, collaterals and mortgage Dr. 244 Long term deposits Cr. 111 Cash on hand 14. Cash payments for fixed assets acquisition for immediate uses: Acquiring fixed assets using in producing goods and services which are subject to subtraction method VAT: Dr. 211 Tangible assets purchased price excluding VAT Dr. 213 Intangible assets purchased price excluding VAT Dr. 133 VAT deductible 1332 Cr. 111 Cash on hand

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Acquiring fixed assets used for production of goods and services which are subject to VAT using direct method; or not subject to VAT; or for administration activities, projects funded by State Budget; or in cultural and welfare activities funded by bonus and welfare fund: Dr. 211, 213 total payment Cr. 111 Cash on hand total payment If the fixed assets acquired by fixed assets fund or investment and development fund are used for production, the accountant records an increase in capital contribution. At the finalization of the fixed assets funds, the record should be: Dr. 441, 414 Cr. 411 Paid in capital 15. Cash payment for construction costs, large repair or purchase of fixed assets that needs installation process before being used in the production of goods and services which are subject to subtraction method VAT: Dr. 241 Construction in progress Dr. 133 VAT deductible 1332 Cr. 111 Cash on hand 16. Cash payments for purchases of materials, tools and supplies and merchandises using in production of goods and services which are subject to subtraction method VAT perpetual subject inventory method : Dr. 152 Raw materials Dr. 153 Tools and supplies Dr. 156 Merchandise goods Purchase price excluding VAT Dr. 157 Goods on consignment Dr. 133 VAT deductible 1331 Cr. 111 Cash on hand materials 17. Cash payments for purchases of supplies, materials and merchandises using in production of goods and services which are subject to subtraction method VAT and periodic inventory subtraction method: Dr. 611 Purchases 6111, 6112 Dr. 133 VAT deductible 1331 Cr. 111 Cash on hand 18. Cash payment to creditors: Dr. 311 Short term loans Dr. 315 Current portion of long term loans Dr. 331 Trade payable Dr. 333 Tax and statutory obligations Dr. 334 Payable to employees Dr. 336 Inter-company payable Dr. 338 Other payable Cr. 111 Cash on hand

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 19. Cash payment for materials purchased for immediate use in production of goods and services which are subject to subtraction method VAT of which the entity pays VAT in subtraction method: Dr. 621, 623, 627, 641, 642 Dr. 133 VAT deductible 1331 Cr. 111 Cash on hand 20. Cash payment for financial and other activities: Dr. 635, 811 Dr. 133 VAT deductible if any Cr. 111 Cash on hand 21. Shortage of cash as result of cash count waiting for resolution: Dr. 138 Other receivable 1381 Cr. 111 Cash on hand 22. Transactions relating to foreign currencies: 22.1 Recording cash on hand transactions in foreign currency of production and trading period foreign applying for production and trading entities under construction stage a. Cash purchase of goods and services in foreign currencies: If foreign exchange loss arisen as result of external purchase of merchandise, goods, fixed assets and services: Dr. 151, 152, 153, 156, 157, 211, 213, 241, 623, 627, 641, 642, 133 using exchange rate at the date of transaction Dr. 635 Financial expenses loss on foreign exchange difference Cr. 111 1112 using the entity s current exchange rate At the same time, single entry is credited to account 007 balance sheet accounts . Multi-fo Multi-foreign currencies Off

If foreign exchange gains arisen as result of external purchase of merchandise, goods, fixed assets and services: Dr. 151, 152, 153, 156, 157, 211, 213, 241, 623, 627, 641, 642, 13 using exchange rate at the date of transaction Cr. 111 1112 using the entity s current exchange rate Cr. 515 Financial incomes gain on foreign exchange difference At the same time, single entry is credited to account 007 balance sheet accounts . Multi-foreign currencies Off

-

If the entities receive materials, merchandises, fixed assets from suppliers; or borrow short term or long term loans, long term liabilities, or inter-company payable etc in foreign currencies, by using the exchange rate at the date of transaction, the record should be:

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. Related accounts using exchange rate at the date of transaction Cr. 331, 311, 341, 342, 336... using exchange rate at the date of transaction b. Cash payment to creditors trade payable, short-term loans, long term loans, long term liabilities, inter-company payable etc. If foreign exchange loss arisen when making cash payment to creditors: Dr. 311, 315, 331, 336, 341, 342 using the entity s current exchange rate Dr. 635 Financial expenses loss on foreign exchange difference Cr. 111 1112 using the entity s current exchange rate At the same time, single entry is credited to account 007 balance sheet accounts . Multi-foreign currencies Off

en If foreign exchange gain arisen when making cash payment to creditors: Dr. 311, 315, 331, 336, 341, 342 using the entity s current exchange rate Cr. 515 Financial income gain on foreign exchange difference Cr. 111 1112 using the entity s current exchange rate At the same time, single entry is credited to account 007 balance sheet accounts . Multi-fo Multi-foreign currencies Off

c. Cash receipts from sales, other incomes in foreign currencies: Dr. 111 1112 actual exchange rate or average inter-bank exchange rate stipulated by SBV Cr. 511, 515, 711... actual exchange rate or average inter-bank exchange rate stipulated by SBV debited At the same time, single entry is debited to account 007 balance sheet accounts . Multi-fo Multi-foreign currencies Off

d. Cash receipts from receivables in foreign currencies accounts receivable, inter-company receivables etc If foreign exchange loss arisen from the receipts from receivables: Dr. 111 1112 using exchange rate at the date of transaction Dr. 635 Financial expenses loss on foreign exchange difference Cr. 131, 136, 138 using the entity s current exchange rate At the same time, single entry is debited to account 007 balance sheet accounts . Multi-foreign currencies Off

22.2 Cash transactions during the period relating to foreign currencies in construction investment period pre-operating stage : a. External purchase of materials, services, fixed assets, equipments and construction and installation volume from suppliers or contractors: Foreign exchange loss resulted from payment to suppliers and contractors in acquiring
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC materials, services, fixed assets, equipments and construction and installation volume: Dr. 151, 152, 211, 213, 241 using exchange rate at the date of transaction Dr. 413 Foreign currencies difference 4312 loss on foreign exchange difference Cr. 111 1112 using the entity s current exchange rate At the same time, single entry is credited to account 007 balance sheet accounts . Multi-foreign currencies Off

Foreign exchange gain resulted from payment to suppliers and contractors in acquiring materials, services, fixed assets, equipments and construction and installation volume: Dr. 151, 152, 211, 213, 241 using exchange rate at the date of transaction Cr. 111 1112 using the entity s current exchange rate Cr. 413 Foreign currencies difference 4132 gain on foreign exchange difference At the same time, single entry is credited to account 007 balance sheet accounts . Multi-fo Multi-foreign currencies Off

currencies b. Cash payment to creditors in foreign currencies trade payable, long term payable, intercompany payable if any : Foreign exchange loss resulted from payment to creditors: Dr. 311, 315, 331, 336, 341, 342 using the entity s current exchange rate Dr. 413 Foreign currencies difference 4132 gain on foreign exchange difference Cr. 111 1112 using the entity s current exchange rate At the same time, single entry is credited to account 007 balance sheet accounts . Foreign exchange gain resulted from payment to creditors: Dr. 311, 315, 331, 336, 341, 342 using the entity s current exchange rate Cr. 111 1112 using the entity s current exchange rate Cr. 413 - Foreign currencies difference 4132 Gain on foreign exchange difference At the same time, single entry is credited to account 007 balance sheet accounts . Multi-foreign currencies Off Multi-fo Multi-foreign currencies Off

c. Annually, realized foreign exchange difference arisen in construction investment period preoperating stage are accumulated in account 413 Foreign exchange difference 4132 until the construction is completed and brought in use. The foreign exchange difference is treated in accordance with the current regulations refers to guidance of account 413 Foreign exchange difference . 22.3. Accounting for foreign currencies difference due to revaluation of cash balance in foreign currencies at the end of fiscal year. At the end of fiscal year, the entity must revalue the balance of account 111 Cash on hand in foreign currency using the exchange rate of the fiscal year end date the average inter-bank exchange rate ruling by the SBV at the closing date of the financial statements . This
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC revaluation may result in foreign currencies difference. The entity must keep track details of the foreign currencies difference arising from revaluation foreign currencies in construction investment period pre-operating stage account 4132 and in normal business operation stage account 4131 . If foreign exchange gains made: Dr. 111 1112 Cr. 413 Foreign exchange difference 4131, 4132 If foreign exchange loss incurred: Dr. 413 Foreign exchange difference 4131, 4132 Cr. 111 1112

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 112 CASH IN BANK This account records the balance and movement of cash in banks.

1. Recording in account 112 Cash in bank is based on the following documents: debit notes, credit notes, copies of deposit acknowledgements and enclosed original evidence from the bank authorized payment and receipt vouchers, bank transfers and bank notified cheques, etc. . 2. When receiving bank documents, accountant must check and compare these with the original e evidences. If there is a difference between the account balance per the bank reconciliation and the amount omen the original evidence, the accountant should inform the bank in order to ensure the matter is investigated and resolved with mutual agreement. At the end of the ed month, should resolutions of the matter still be outstanding, the balance per the bank acknow documents such as debit notes, credit notes or copies of deposit acknowledgement should be recorded. The difference is debited to account 138 Other receivable 1388 if the balance per accounting records is greater than the bank documents ; or credited to account 338 Other payable 3388 if the balance per accounting book is less than the bank documents . The book difference should be followed up for examining, reconciling and investigating for resolution in the next month. 3. For entities which have related organizations, departments without using separate accounting system, separate bank accounts can be opened to facilitate the payment and receipt transactions process. The accountant should keep a sub-ledger for each account for each keep currency in VND or foreign currencies . detailed 4. Each bank account should have a separate detailed bank book for ease of reconciliations. Cash deposited into bank in foreign currencies is converted into VND using the actual exchange rate or the average inter-bank exchange rate ruling by the State Bank of Vietnam at the date of transaction the average inter-bank exchange rate of SBV . inter-bank Buying foreign currency to deposit into bank account should be recorded at actual exchange accounts rate. Withdrawing foreign currencies from the bank should be converted into VND using the exchange rate which is being used in the sub-ledger of account 1122 applying one of following methods: Average cost, First in - first out, Last in - first out, Actual cost. 5. At the stage of production and business applying for both entity in construction stage and enterprise operating in construction industry , the transactions relating to foreign currency difference arisen from foreign currency deposits into bank accounts is credited in account 515 Financial income foreign exchange gain or debited in account 635 Financial expenses foreign exchange loss . 6. In case there is foreign exchange difference resulted from the transactions in foreign currencies occurred in construction investment period pre-operating stage , the difference should be recorded in account 413 Foreign exchange difference 4132 .
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC STRUCTURE AND CONTENT OF ACCOUNT 112 - CASH IN BANK Debit: Cash in VND, in foreign currencies, gold, silver, precious metals and gemstones deposited into the banks. Gain on foreign exchange difference resulted from revaluation of the bank balance in foreign currencies at the end of the period.

-

Credit: Cash in VND, in foreign currencies, gold, silver, precious metals and gemstones withdrawn from the banks. Loss on foreign exchange difference resulted from revaluation of the bank balance in foreign currencies at the end of the period.

-

Debit balance: Cash in VND, in foreign currencies, gold, silver, precious metals and gemstones in the bank. silver,

Account 1121 - VND: to record VND deposited in the bank. 1122 - Foreign currencies: to record VND equivalent amount of foreign currencies deposited in the bank. Account 1123 Gold, silver, precious metals, gemstones: to record the value of gold, silver, precious metals and gemstones deposited in the bank. MAJOR TRANSACTIONS 1. Deposit cash on hand into the bank: Dr. 112 - Cash in bank Cr. 111 - Cash on hand 2. Receipt of credit notes from bank advising cash in transit deposited to the bank account of the entity: Dr. 112 - Cash in bank Cr. 113 - Cash in transit 3. Receipt of deposit from customer or collection of receivables made through bank account. Based on credit notes, the accountant records: Dr. 112 - Cash in bank Cr. 131 - Accounts receivable 4. Collection of deposits, collaterals through bank account:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 112 - Cash in bank Cr. 144 - Short term deposits, mortgages and collateral Cr. 244 Long term deposits 5. Receipt of capital contribution, shares in join ventures from investors through bank account: Dr. 112 - Cash in bank Cr. 411 Paid in capital

112 Cash in bank Cr. 344 Long term deposits Cr. 338 Other payable 3388

Cr. 121 - Short term investments at historical cost Cr. 128 Other investments Cr. 515 Financial income interest income Cr. 3331 VAT payables 33311

using subtraction method VAT, revenues from sales of goods and rendering of services or income generated from other activities are subject to subtraction method other VAT. Receipts of the sales through bank account, the accountant records: through Dr. 112 Cash in bank total receipts Cr. 511 Sales selling price excluding VAT Cr. 512 Inter-company sales selling price excluding VAT Cr. 515 Financial income selling price excluding VAT Cr. 711 Other income income excluding VAT Cr. 3331 VAT payable 33311 sales 8.2 Receipt through the bank of revenues from sal of goods and rendering of services, financial activities and other activities which are not subject to VAT or subject to VAT using direct method: Dr. 112 Cash in bank Cr. 511 Sales total receipts Cr. 512 Inter-company sales total receipts Cr. 515 Financial income Cr. 711 Other income 9. Receipt of interest income from the bank: Dr. 112 Cash in bank Cr. 515 Financial income

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC

Cr. 112

Cash in bank

Cr. 112 12.

Cash in bank for short term investment:

Cr. 112 - Cash in bank

-

Inventories are recorded using perpetual method: corded

Cr. 112 -

Cash in bank

Inventories are recorded using periodic method: recorded

Cr. 112

Cash in bank

Long term investments Shares in joint ventures Investment in associates Other long term investments Construction in progress Dr. 133 VAT deductible 1332 if any Cr. 112 Cash in bank

Dr. 221 Dr. 222 Dr. 223 Dr. 228

Dr. 311 - Short term loans
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 315 Current portion of long term loans Dr. 331 Account payables Dr. 333 - Taxes and statutory obligations Dr. 336 Inter-company payable Dr. 338 - Other payable Dr. 341 Long term loans Dr. 342 Long term liabilities Cr. 112 - Cash in bank

Dr. 411 Paid in capital Dr. 421 Undistributed earnings Dr. 414, 415, 418 Cr. 112 Cash in bank 17. Payment of sales discounts, sales returns, sales allowances which are subject to subtraction method VAT and the entity paid subtraction method VAT by bank transfer: Dr. 521 Sales discounts Dr. 531 Sales returns Dr. 532 Sales allowances Dr. 3331 VAT payable 33311 Cr. 112 Cash in bank 18. Payments for machinery expenses, factory overhead, selling expenses, general and factory administration expenses, financial expenses, and other expenses which are subject to subtraction method VAT by bank transfer: Dr. 623 Machinery expenses Dr. 627 - Factory overhead expenses Dr. 641 - Selling expenses Dr. 642 - General and administration expenses Dr. 635 - Financial expenses expenses Dr. Dr. 133 VAT deductible 1331 Cr. 112 - Cash in bank 19. Transactions relating to foreign currencies: 19.1 Recording foreign currency transactions arisen in the period related to the business activities, including construction activities of the production and business entity a. Purchase materials, tools and supplies, merchandises, fixed assets, services in foreign currencies through bank: If foreign exchange loss resulted from external purchase of materials, merchandises, fixed assets and services: Dr. 151, 152, 153, 156, 211, 213, 241, 623, 627, 642, 641, 133 using exchange rate at the date of transaction Dr. 635 Financial expenses loss on foreign exchange difference
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 112 Cash in bank using the entity s current exchange rate Multi-foreign currencies Off

At the same time, single entry is credited to account 007 balance sheet accounts . -

If foreign exchange gain resulted from external purchase of materials, merchandises, fixed assets and services: Dr. 151, 52, 153, 156, 211, 213, 241, 623, 627, 641, 642, 133 using exchange rate at the date of transaction Cr. 112 1122 using the entity s current exchange rate Cr. 515 Financial income gain on foreign exchange difference At the same time, single entry is credited to account 007 balance sheet accounts Multi-fo Multi-foreign currencies Off

-

Payment to creditors trade payable, short term loans, long term loans, long term liabilities, inter-company payable etc. If foreign exchange loss arisen from payment to creditors: Dr. 311, 315, 331, 336, 341, 342 using the entity s current exchange rate Dr. 635 Financial expenses loss on foreign exchange difference Cr. 112 1122 using the entity s current exchange rate At the same time, single entry is credited to account 007 balance sheet accounts . If foreign exchange gains arisen from payment to creditors: Dr. 311, 315, 331, 336, 341, 342 using the entity s current exchange rate Dr. 515 Financial income gain on foreign exchange difference Cr. 112 1122 using the entity s current exchange rate At the same time, single entry is credited to account 007 Off balance sheet accounts . Multi-foreign currencies Off Multi-foreign

b. Receipts of foreign currencies from sales and other income: Dr. 112 1122 actual rate or average inter-bank exchange rate Cr. 511, 515, 711 actual rate or average inter-bank exchange rate At the same time, single entry is debited to account 007 balance sheet accounts . c. Collection of receivables in foreign currencies receivable, etc. Loss on foreign exchange difference: Dr. 112 1122 using exchange rate at the date of transaction Dr. 635 Financial expenses loss on foreign exchange difference Cr. 131, 136, 138 using the entity s current exchange rate
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Multi-foreign currencies Off

accounts receivable, inter-company

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC

At the same time, single entry is debited to account 007 balance sheet accounts . Gain on foreign exchange difference:

Multi-foreign currencies Off

Dr. 112 1122 using exchange rate at the date of transaction Cr. 515 Financial income gain on foreign exchange difference Cr. 131, 136, 138 using the entity s current exchange rate At the same time, single entry is debited to account 007 balance sheet accounts . Multi-foreign currencies Off

reign 19.2. Accounting transactions relating to foreign currencies of construction activities (preoperating stage) a. Purchase of merchandises, services, fixed assets, equipment construction amount, installation which are passed from sellers or constructors: payment Loss on foreign exchange difference in payment transactions in foreign currencies: Dr. 151, 152, 211, 213, 241 using exchange rate at the date of transaction Dr. 413 Foreign currencies difference 4312 loss on foreign exchange difference Cr. 112 1122 using the entity s current exchange rate At the same time, single entry is credited to account 007 - Multi-foreign currencies Off balance sheet accounts . payment Gain on foreign exchange difference in payment transaction in foreign currencies: Dr. 151, 152, 211, 213, 241 using exchange rate at the date of transaction Cr. 112 1122 using the entity s current exchange rate Cr. 413 Foreign currencies difference 4132 gain on foreign exchange difference At the same time, single entry is credited to account 007 - Multi-foreign currencies Off balance sheet accounts . b. Payment to creditors account payables, long term loans, inter-company payable if any , etc. in foreign currencies Loss on foreign exchange difference: Dr. 311, 315, 331, 336, 341, 342 using the entity s current exchange rate Dr. 413 Foreign currencies difference 4132 gain on foreign exchange difference Cr. 112 1122 using the entity s current exchange rate At the same time, single entry is credited to account 007 balance sheet accounts . Gain on foreign exchange difference: Dr. 311, 315, 331, 336, 341, 342 using the entity s current exchange rate Cr. 112 1122 using the entity s current exchange rate
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Multi-foreign currencies Off

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 413 - Foreign currencies difference 4132 gain on foreign exchange difference At the same time, singer entry is credited to account 007 - Multi-foreign currencies Off balance sheet accounts . c. Annually realized foreign exchange difference arisen in capital construction stage preoperating stage are accumulated in account 413 Foreign exchange difference 4132 until the construction is completed and put in use. The foreign exchange difference is treated according to the current regulations refers to instruction of account 413 Foreign exchange difference . 19.3 Accounting for foreign currencies difference due to revaluation of cash balance in foreign currencies at the end of fiscal year At the end of fiscal year, the enterprise must revalue the balance of account 112 Cash in bank in foreign currency using the exchange rate of the fiscal year end date the average inter-bank exchange rate ruling by the SBV at the closing date of the financial statements . the This revaluation may arise foreign exchange difference. The enterprise must keep track in difference. details the foreign currencies difference arising from revaluation foreign currencies in capital arising construction stage pre-operating in account 4132 and in business operation stage in account 4131. Gain on foreign exchange difference: Dr. 112 1122 Cr. 413 Foreign exchange difference 4131, 4132 . Loss on foreign exchange difference: Dr. 413 Foreign exchange difference 4131, 4132 Cr. 112 1122

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 113 CASH IN TRANSIT This account records cash transferred to the bank, the State treasury for which the bank/State treasury credit notes have not been received or cash payment to other enterprise from bank account with completeness of procedures for transferring but has not received debit notes or bank statement. Cash in transit includes VND and foreign currency in the following cases: Receipts in cash or by cheque deposited directly to the bank account. Transfer through the post office to pay other enterprise. Cash receipts from sales are being used to pay tax at the same time cash transactions between three parties: the enterprise, the buyers and the State Treasury .

ACCOUNT STRUCTURE AND CONTENTS OF ACCOUNT 113 - CASH IN TRANSIT Debit: Cash in VND, foreign currency or by cheque is deposited into the bank or transferred into the bank by the post office for which the bank credit notes have not been received. Gain on foreign exchange difference resulted from revaluation of cash balance in foreign currencies in transit at the end of the period.

-

Credit: . Debit balance Cash in transit at the end of the period. 113 sub Cash is transferred to account 112 Cash Cash in bank or related accounts.

Account 1131 – VND: to record VND in transit. Account 1132 – Foreign currency: to record foreign currencies in transit. MAJOR TRANSACTIONS 1. Cash receipts from sales, receivable or other income in cash or by cheque deposited directly to the bank not through company s premises for which the bank advice has not been received confirming the transactions: Dr. 113 Cash in transit 1131, 1132 Cr. 131 Accounts receivable
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 3331 Cr. 511 Cr. 512 Cr. 515 Cr. 711 VAT payable 33311 if any Sales Inter-company sales Financial income Other income

2. Deposit cash on hand into bank for which bank advice confirming deposit is not yet received: Dr. 113 Cash in transit 1131, 1132 Cr. 111 Cash on hand 1111, 1112 3. Payment to creditors from cash in bank for which bank advice confirming payment is not yet received: Dr. 113 - Cash in transit 1131, 1132 Cr. 112 - Cash in bank 1121, 1122 4. Cheques received from customer and deposited to bank for which bank advice confirming the transaction not yet received: Dr. 113 - Cash in transit 1131, 1132 Cr. 131 - Accounts receivable 5. Receipt credit notes of bank confirming cash deposited to bank account: Dr. 112 - Cash in bank 1121, 1122 Cr. 113 - Cash in transit 1131, 1132 confirming 6. Receipt debit notes of bank confirming cash payment for suppliers: Dr. 331 - Accounts payable-trade Cr. 113 - Cash in transit 1131, 1132 7. At the end of the period, the enterprise must revalue cash balance of foreign currencies in aver account 113 Cash in transit based on the average inter-bank exchange rate ruling by the State Bank of Vietnam: Gain on foreign exchange difference: Dr. 113 Cash in transit 1132 Cr. 413 Foreign exchange difference Loss on foreign exchange difference: Dr. 413 Foreign exchange difference Cr. 113 Cash in transit 1132

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 121 SHORT TERM INVESTMENTS This account records investments which will mature or be sold within one year. Short term investments include: Shares which trade on the stock market; Bonds, securities, promissory notes: company bonds, government bonds; Other shares.

THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS: 1. Short term investments should be recorded at their actual cost historical cost . This cost their includes: purchase price plus other expenses if any such as broker's expenses, taxes, bank charges. 2. Short term investments include long term investments which are to be sold or matured within investments a year. price 3. At the end of each fiscal year, if the market price of a short term investment has been lower than its historical cost, a provision for this decrease should be made. 4. The accountant should maintain details with regards to each individual investment. The investment invest details which should be maintained are: the investment categories, investment partner, the par value and market value of the stock. STRUCTURE AND CONTENTS OF ACCOUNT 121 - SHORT TERM INVESTMENTS Debit: The value of short term investments purchased. Credit: The value of the short-term investments which have been sold, matured or liquidated. Debit balance Total value of short-term investment held by the entity. Account No. Account No. 1211 has two sub-accounts Shares: to record shares being purchased and sold.

Account No. 1212 – Bonds, bills, promissory notes: to record bonds, bills, promissory notes being purchased and sold. MAJOR TRANSACTIONS
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 1. Purchase short term investments based on the actual price i.e. including purchase price, brokerage expenses, taxes, bank charge, etc. : Dr. 121 Short term investments Cr. 331- Trade payable Cr. 111 Cash on hand Cr. 112 Cash in bank Cr. 141 Advances Cr. 144 Short term deposits 2. Periodically calculating earned interests from bonds and receipts: a Earned interest is reinvested into bonds, bills i.e. money is not through the entity s premise Dr. 121 Short term investment Cr. 515 Financial income b Interests is received in cash: Dr. 111, 112 Cr. 515 Financial income c Earned interests including accumulated interests generated before being purchased by the interests company should be recorded separately. Interests generated since being purchased by the company is recorded in financial income. Accumulated interests generated before being Accumulated purchased by the company is deducted against the value of the investment. against Dr. 111, 112 Total earned interest Cr. 121 Short term investments accumulated interests generated before being purchased by the company Cr. 515 Financial income interests generated since being purchased by the company generated 3. Periodically, receipts of dividends if any : Dr. 111, 112 Dr. 138 Other receivables i.e. money is not received yet Cr. 515 Financial income 4. Record sales of short term investments based on selling price: a Gain: Dr. 111, 112 total receipts Dr. 131 Account receivable total receipts Cr. 121 Short term investment historical price Cr. 515 Financial income difference of selling price and historical price

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC

b

Loss: Dr. 111, 121 or 131 total receipts Dr. 635 Financial expenses difference of selling price and historical cost Cr. 121 Short term investment historical cost

c

Expenses arisen from selling securities: Dr. 635 Financial expenses Cr. 111, 112

5. Collecting or liquidating of matured short term investments: Dr. 111, 112, or 131 Cr. 121 Short term investment historical cost Cr. 515 Financial income

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 128 OTHER SHORT TERM INVESTMENTS This account records the balance and movements of other short term investments including loans and borrowings which will mature or be sold within one year. When investments are made in cash or in commodities e.g. fixed assets, raw materials, goods, etc. , the value of the commodities must be agreed by the parties. Any difference between the book value and the agreed upon value should be either debited to account 811 or credited to account 711. The accountant should maintain a sub-ledger for individual investment and loans and borrowings. STRUCTURE AND CONTENTS OF ACCOUNT 128 - OTHER SHORT TERM ACCOUNT INVESTMENTS Debit: Increase in other short term investments. Credit: Decrease in other short term investments. Debit balance: The value of the short term investments at the end of the period. Account No. has two sub-accounts

Account No. 1281 – Short term deposits: to record movements and balance of short term deposits Account No. 1288 – Other short term investments: to record movements and balance of other short term investments. MAJOR TRANSACTIONS 1. Short term investments paid for in cash: Dr. 128 - Other short term investments 1281, 1288 Cr. 111, 112 . 2. Short-term investments made through the contribution of raw materials, finished and merchandise goods which will be held within one year: a. If the accepted value of the materials and goods is higher than the book value: Dr. 128 Other short term investments 1288 Cr. 152 Raw materials Cr. 155 Finished goods Cr. 156 Merchandise goods Cr. 711 Other income difference of the revaluation and the book value of the materials
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC and goods . b. If the accepted value of materials and goods is less than the book value: Dr. 128 - Other short term investments 1288 Dr. 811 Other expenses difference of the revaluation and the book value of materials and goods Cr. 152 Raw materials Cr. 155 Finished goods Cr. 156 Merchandise goods 3. Receipts of other short term investments: Dr. 111, 112, 152, 156, 211 Dr. 635 Financial expenses loss Cr. 128 - Other short term investments 1281, 1288 historical cost Cr. 515 Financial income gain

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 129 PROVISION FOR SHORT TERM INVESTMENTS This account records balance and movements of provisions for short tem investments. The provision for short term investments is used to write down the value of short tem investments when its market value is less than cost. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS: 1. The provision/reversal of provision for short term investments can be made at the end of the fiscal year when the accounting records are closed for financial year end. For entities issuing the interim financial statements, provision/reverses on provision will be adjusted if there is provision/reverses significant movement in the value of the investments 2. The provision for short term investments is provided upon the difference between the net realizable value market price and the historical cost in the accounting book. If the provision period for short term investments required in this period is greater than the provision required in the increase prior period, then the difference should be an increase in the financial expenses of the period. required If the provision for short term investments required in this period is less than the provision required in the prior period, the difference should be deducted from to the financial expenses. 3. The criteria to provide provision for short term investments include: entities The securities held by the entities are invested in accordance with relevant laws and regulations. Those securities are freely traded in the market and their market prices are lower than their book value at the time of stock-taking or financial statements are issued provisions should financial not be made for securities which are not freely traded in the market .

-

4. The provision for short term investments should be made for each individual investment with a price decreased at the end of the financial year in the following formula: financial

Provision for short-term securities

=

Quantity of securities losing value at the end of the fiscal year

X

Historical cost of securities on the book

-

Market value of securities

The entity must quantify the provisions required for each individual investment that is diminuted in value and a list of provisions for diminution in value of short term investments are summarized and compared with those of prior period in order to quantify the figure to adjust in the financial expenses.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC STRUCTURE AND CONTENTS OF ACCOUNT 129 - PROVISION FOR SHORT TERM INVESTMENTS Debit: Reversal of provisions for short term investments due to the provision required in this period is lower than the provision provided in prior period. Credit Provisions for short term investments initial provision required and the difference between provision required in this period and the provision provided in the prior period . Credit balance Current balance of provision for short term investments. MAJOR TRANSACTIONS 1. At the end of the accounting period, the accountant should provide initial provision for the accountant diminution in value of short term investments: Dr. 635 Financial expenses Cr. 129 - Provisions for short tem investments 2. At the end of the next accounting period: If the provision for short term investments required in this period is less than the provision required required in the prior period, the difference should be reversed as follows: Dr. 129 - Provisions for short tem investments. Cr. 635 Financial expenses If the provision for short term investments required in this period is greater than the provision required in the prior period, the difference should be added to financial expenses as follows: should Dr. 635 Financial expenses Cr. 129 - Provisions for short term investments

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 131 ACCOUNTS RECEIVABLE This account records the balance and movements of receivables from customers from the sales of services of the entities products, goods, This account also records the amounts receivable from contractors on construction work completed. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. The accounts receivable should be recorded in details for each customer, nature of the amount receivable, short term and long term receivables and for each time of receipt. Trades receivable are receivables from customers who purchase products, goods, or services and also include fixed assets and investment properties. Cash sales from sales of products, goods, investment property, fixed assets and rendering of investment services are not recorded in this account cash sales should be recorded as cash on hand, cheques, or cash in bank . Accounts receivable should be classified as collectable on time; likely unrecoverable; and collectable definitely unrecoverable to provide useful information for accountants to access bad debts or provide provide provision for bad debts and provide solutions for unrecoverable receivable. If the sales of products or goods, rendering of services, investment properties supplied to the services, customers do not comply with the terms in the economic contract, the customers might request a discount on the goods/services or return them to the entity STRUCTURE AND CONTENTS OF ACCOUNT 131 - ACCOUNTS RECEIVABLE ACCOUNT Debit: Amounts receivable from customers on the sale of products, goods, investment properties, fixed assets and rendering of services. Excess receipts returned to customers.

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Credit: Receipt of payment from customers. Receipt of advance, deposit from customers. Price discounts allowed due to complaints by customers on the basis that the supplied goods do not comply with the sales agreement. Sales returned by the client including or excluding VAT . Sales discounts and trade discount.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Debit balance: Amounts receivable from customers. Accounts receivable may have credit balances. These credit balances represent deposits or excess amounts received from customers. The debit and credit balances of each individual customer should be presented separately in assets or liabilities in the balance sheet respectively. MAJOR TRANSACTIONS 1. Recognize the sale of products, goods, investment properties and rendering of services: With respect to goods, services and investment properties which are subject to subtraction on method VAT and the entity pays subtraction method VAT. Sales are recorded at VATexclusive price as follows: Dr. 131 Accounts receivable total amount Cr. 511 Sales Selling price excluding VAT 5111, 5112, 5113, 5117 excluding Cr. 3331 VAT payable 33311 With respect to goods, services and investment properties which are not subject to VAT or subject to subtraction method VAT, sales are recorded at total amount: Dr. 131 Accounts receivable Cr. 511 Sales Total amount 5111, 5112, 5113, 5117 Record goods returned from customers With respect to goods and services are subject to subtraction method VAT and the entity pays subtraction method VAT

Cr. 131 Accounts receivable Cr. 111, 112 With respect to goods which are not subject to VAT or subject to credit VAT in direct method

Cr. 131

Accounts receivable

If the goods/services supplied to the customer do not comply with the economic contract, they may be discounted on the price. If the customers have not paid for the receivables, based on documents which confirmed the discount, the accountant can write down receivable to discounted amount as follows

Cr. 131

Accounts receivable discount amount
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In the case, goods and services are not subject to VAT or subject to direct subtraction method VATor subject to indirect subtraction method VAT while entity pays VAT using the direct method

Cr. 131

Accounts receivable

Cash receipts from sale of goods, products, rendering of services and sales of investment properties including interest charged on receivable, if any :

Cr. 131 Cr. 515

Accounts receivable Financial income interest income

Cr. 131

Accounts receivable

Cr. 131

Accounts receivable

7. Record deposits received from the customers from sale contracts or service contracts: Dr. 111, 112 Cr. 131 - Accounts receivable 8. Accounting treatment for contractors for receivables from construction contracts: 8.1 If the term of the construction contract stipulates that the contractor is allowed to make payments according to an agreed process billing, the construction contract performance result is reliably estimated, by referencing to the completed volume determined by the contractor regardless of whether invoices according to the set schedule have been billed, the accountant records the following: Dr. 337 Construction contractor payables based on agreed progress billing Cr. 511 Sales Based on invoice issued according the agreed progress billing, the accountant records: Dr. 131 Accounts receivable Cr. 337 - Construction contractor payables based on agreed progress billing Cr. 3331 VAT payable 33311 8.2 If the construction contract stipulates that the contractor is allowed to make payments according to the value of work volume performed, the contract performance result is reliably
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC determined and certified by customers, the accountant should issue invoice based on the completed work volume certified by the customers in the period and records based on the issued invoice: Dr. 131 Accounts receivable Cr. 3331 VAT payable 33311 Cr. 511 Sales 8.3 Bonuses received from customers that are additionally paid to contractors due to completion of contracts beyond contractual requirements: Dr. 131 Accounts receivable Cr. 3331 VAT payable 33311 Cr. 511 Sales 8.4 Additional receivables from the customer or other parties to offset extra costs which are not covered in the contractual price e.g. delay caused by the customers, errors in technical or designing specifications, and disputes over changes in the contract performance : Dr. 131 Accounts receivable Cr. 3331 VAT payable 33311 Cr. 511 Sales 8.5 When receiving cash payments for completed work or cash deposit from customer, the accountant records: Dr. 111, 112 Cr. 131 Accounts receivable 9. Recording receivables transactions of an import consignee: 9.1 When receipt of deposits from consignor to open LC: Dr. 111, 112 Cr. 131 Accounts receivable details by consignors 9.2 When transferring money or using bank loans to open LC payment made in Letter of Credit , based on the supporting documents, record as: Dr. 144 Short term deposits, mortgage and collaterals Cr. 111, 112, 311 9.3 When importing materials, equipments and products, the entity needs to reflect the followings: If consignee pays the seller total amount of mechandise on behalf of the consignor, based on related documents, the accountant records: Dr. 151 Goods in transit if the goods are in transit Dr. 156 Merchandise goods if the goods have arrived to warehouse Cr. 331 Trade payable to each seller details

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC If the merchandises received and transfered directly to the consignor without going through the consignee s premises, the accountant records: Dr. 331 Trade payable details by consignor Cr. 331- Trade payable details by sellers If import tax is paid on behalf of the consignor, based on related documents, the accountant records: Dr. 151 Goods in transit Dr. 156 Merchandise goods Cr. 3333 Import, export tax payable taxes by details In the case, the merchandises received and transfered directly to the consignor without going through the consignee s premises: Dr. 331 Trade payable details by consignor Cr. 3333 - Import, export tax payable details by taxes If import VAT is paid on behalf of the consignor, based on related documents, record as: Dr. 151 Goods in transit Dr. 156 Mechandise goods Cr. 3331 VAT payable 33312 In the case, the merchandises received and transfered directly to the consignor without going through the consignee s premises: Dr. 331 Trade payable details by consignors Cr. 3331 VAT payable 33312 If special consumption tax is paid on behalf of the consignor, based on related documents, the accountant records: Dr. 151 Goods in transit Dr. 156 Mechandise goods Cr. 3332 Special consumption tax payable In case the merchandises received and transfered directly to the consignor without going through the consignee s premises, the accountant records: Dr. 331 Trade payables details by consignors Cr. 3332 - Special consumption tax payable When transfering the merchandises to the consignor, based on VAT invoice and related documents, the accountant records: Dr. 131 - Accounts receivable details by consignors Cr. 156 Mechandise goods total amount inclusive tax payable Cr. 151 Goods in transit 9.4. With respect to consigment charge and VAT on the service charge, based on the VAT invoice and other related documents, the accountant records the revenue from consignment fees:
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Dr. 131, 111, 112 Total amount Cr. 511 - Sales 5113 Cr. 3331 - VAT payable 9.5. With respect to surcharges paid on behalf of the consignor e.g. bank charge, customer research fees, storages, handling fees or delivery fees... , based on related documents, the accountant records: Dr. 131 - Accounts receivable details by consignor Cr. 111, 112,... 9.6. With respect to receipts from the consignor for mechandise value, import tax, import VAT, se special consumption tax if the consignee paid those taxes to the State Treasury on behalf of the consignor , and charges araising from import consignment services, the accountant records: Dr. 111, 112,... Cr. 131 - Accounts receivable details by consignor 9.7. When making payment for mechandise to the seller on behalf of consignor: Dr. 331 - Trade payable detail by sellers Cr. 112, 144,... 9.8. When making payment for import tax, VAT, special consumption tax to State Treasury on behalf of the consignor, based on related documents, the accountant records: related Dr. 3331, 3332, 3333,... Cr. 111, 112,... 9.9. In case the import consignee performs custom and tax application but the consignor pays taxes itself, the amount of taxes that are paid by the consignor should be recorded as follows: Dr. 3331, 3332, 3333,... Cr. 131 - Accounts receivable details by consignor 10. If the consignor pays seller by merchandise rather than in cash bartering transactions , a deduction to account receivable is made based on the value of bartered merchandise fair value on VAT invoice or official invoice issued by consignor , the accountant records: Dr. 152 Raw materials Dr. 153 Tool and supplies Dr. 156 Merchandise goods Dr. 611- Purchase periodic inventory accounting Dr. 133 VAT deductible if any Cr. 131 Accounts receivable 11. In case the receivable is definitely unrecoverable, the accountant must write off bad debts by: Based on the bad debts written off minutes: Dr. 139 Dr. 642 Provision for doubtful debts amount of provision already provided General and administration expenses amount of provision not yet provided
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 131 - Accounts receivable At the same time, a debit must be recorded to account 004 "Bad debts written off" Off balance sheet accounts so that they can be followed up within the regulated timeframe for future collectibles from these customers. 12. At the end of fiscal year, accounts receivable in foreign currency must be revalued at average inter-bank exchange rate on foreign currency market stipulated by the State Bank of Vietnam ruling at the date of financial statements preparation. If the average inter-bank exchange rate in foreign currency market stipulated by the State Bank of Vietnam ruling at the date of financial statements preparation is greater than the booking exchange rate of account 131, the resulted difference will be recorded as follows: Dr. 131 - Accounts receivable Cr. 413 Foreign exchange difference 4131 If the average inter-bank exchange rate in foreign currency market announced by the State foreign Bank of Vietnam ruling at the date of financial statements preparation is lower than the financial booking exchange rate of Account 131, the resulted difference will be recorded as follows: resulted Dr. 413 - Foreign exchange difference 4131 Cr. 131 - Accounts receivable Refer to instruction to account 413 for exchange difference from revaluation at the end of exchange fiscal year for accounts receivable in foreign currency.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 133 VAT DEDUCTIBLE This account records VAT amount that is deductible, deducted and to be deducted of the entity. VAT deductible input is the VAT on goods and services used in the business, in the production of goods and services that are subject to VAT. VAT input equals = total VAT on the VAT invoices of goods and services including fixed assets used in production of goods and services subject to VAT, the amount of import VAT recorded on the tax dossier documents of imported goods, or tax payment dossiers on behalf of a foreign party as the Ministry of Finance s regulation for foreign organizations, individuals doing ment business in Viet nam not belonging to investment forms under the Vietnam law on foreign investment. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS: 1. Account 133 only applies for entity subject to subtraction method VAT, not applicable for entity of which goods and services are subject to VAT in direct method or goods and services are not subject to VAT. 2. For goods and services purchased for production of goods and services both subject to and not subject to VAT, entities have to independently record VAT deductible input and nonindependently deductible VAT input. When it is impossible to independently record, the amount of VAT input should be recorded to account 133. At the end of the accounting period, the accountant must define the amount of VAT deductible based on the percentage of the sales from goods and services subject to VAT the in the total sales from goods and services in that period. The amount of non-deductible VAT input is included in the cost of goods sold or production costs, overhead on each specific case. When the amount of non-deductible VAT is high costly, a proportion of the amount should high be allocated in cost of goods sold in correspondence with the revenue in the current period. correspondence The rest should be charged to cost of goods sold in the next period. 3. When an entity buys goods and services used for production of goods and services not subject to VAT or subject to direct VAT; used in adminisation and services activities; used in projects whose expenditure is covered by Stage Budget; in benefit and fringe activities which are covered by social and welfare fund, the VAT input should not be deductible and not recorded to account 133. The amount of non-deductible VAT should be recorded into the purchasing cost of those mechandises, fixed assets and services. 4. When purchased goods and services are used specific documents such as post stamp, transportation ticket, etc. showing that the paying prices have been included VAT; based on those documents, the entity must define the non-tax price. The VAT input is deducted as the regulation at point b, article 1.2, item I, part III Circular 120/2003/TT-BTC dated December 12, 2003 of the Ministry of Finance. 5. When agricultural, forestry, fishery enterprises export products that they directly feed, plant and catch, they will be only deducted the VAT input on goods and services directly used in the period of feed, catch and plant.
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6. Purchased goods being lost or damaged by natural calamities, fire because of organisations, individuals responsibility and these people have to compensate, the VAT input of these goods should be recorded into the value of damaged goods that being compensated. They should not be recorded as VAT deductible input in the monthly VAT declaration. 7. The VAT occurred in one month should be declared in the monthly VAT declaration of that month. If the amount of VAT deductible input is greater than the amount of VAT output, the deducted VAT is the amount of VAT output of that month. The rest amount of VAT input will be deducted in following month or considered to be refunded as laws and regulations on VAT. When VAT invoices or documents of paying VAT input of purchased goods, services in a month and have not been declared in the monthly VAT report of that month, that VAT will be deducted in the following months as laws and regulations on VAT. corporations 8. When the head offices of general corporations do not directly produce, sell goods and services not subject to VAT, the VAT input on goods and services purchased for the offices activities will not be deducted or refunded. serv When the head offices of general corporations produce, sell goods and services subject to VAT, the head offices must register and declare the VAT for each these activities independently. 9. When an entity paying VAT in direct method changes to pay subtraction method VAT, the amount of VAT input will be deducted since the month applying VAT deduction method. before The VAT input of goods and services purchased before the that month will not be deducted. 10. According to the law on VAT, the VAT deductible input is determined based on the amount of VAT recorded on VAT invoices of purchased goods and services or documents of paying paying VAT for imported goods; or documents of paying VAT on behalf of foreign contractors as stipulated. The entity s VAT input will not be deducted In the case of purchasing goods and services without VAT invoices or with illegal ones. The entity s VAT input will not be deducted when VAT invoices do not note the VAT amount excluding of specific cases using included the VAT invoices noting the total value has included VAT ; do not note or note incorrectly therefor the name, address, tax code of the seller therefore it is unlikely to verify the seller; fake VAT invoices, documents; corrected or erased invoices, blank invoice goods and services actually not sold ; invoices noted the value higher than th real value of the sold goods and services. the STRUCTURE AND CONTENTS OF ACCOUNT 133 - VAT DEDUCTIBLE Debit: Amount of VAT deductible; Credit: Amount of VAT input deducted; Transferring the non-deductible VAT; VAT input on goods purchased but then was returned, reduced the price; Amount of VAT input refunded.
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Debit balance: VAT input will be deducted, VAT input was refunded but the State Budget has not yet returned. Account 133 - VAT deductible have two sub-accounts: Account 1331 - VAT deductible on goods and services: to record VAT deductible input on raw materials, goods, services purchased for producing, selling goods, services subject to subtraction method VAT. Account 1332 - VAT deductible on fixed asset: to record VAT input on investing, purchasing fixed assets for producing, selling goods and services subject to subtraction method VAT.

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MAJOR TRANSACTIONS 1. When purchasing raw materials, goods and services subject to subtraction method VAT; services purchasing investment property subject to subtraction method VAT, the accountant records the value of materials, merchandise goods, costs of purchasing, transit, loading, renting warehouse lease etc. at the actual cost including the price excluding VAT and then records including the VAT deductible: Dr. 152 - Raw material Dr. 153 - Tools and supplies Dr. 156 - Goods Dr. 211 - Tangible assets Dr. 213 - Intangible assets Dr. 611 - Purchases Dr. 217 - Investment property Dr. 133 - VAT deductible 1331, 1332 Cr. 111, 112, 331,... total payment 2. When purchasing raw materials, goods, tools and services for producing, selling goods, tools services, repairing fixed assets, investing in construction subject to subtraction method VAT, the accountant records the value of raw materi materials, goods, tools, services into the price excluding VAT, and then records VAT input: Dr. 621, 623, 627, 641, 642, 241, 142, 242,... purchased price excluding VAT Dr. 133 VAT deductible 1331 Cr. 111, 112, 331,... total payment 3. When credit VAT payer purchased goods subject to subtraction method VATwhich are sold right away not through the company s premises : Dr. 632 - Cost of goods sold purchased price excluding VAT Dr. 133 - VAT deductible 1331 Cr. Accounts 111, 112, 331,... total payment 4. When importing raw materials, goods and fixed assets, the accountant records the value of imported raw materials, goods and fixed assets including total amount payable to the seller using the actual exchange rate or the average inter-bank exchange rate on the foreign currency market announced by the SBV at the transaction date , import duties and special consumption tax if any and transportation costs:
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Dr. 152 Raw materials purchased price excluding import VAT Dr. 156 Merchandise goods purchased price excluding import VAT Dr. 211 Tangible assets purchased price excluding import VAT Cr. 333 Tax and statutory obligations 3332, 3333 Cr. 111, 112, 331,... For VAT on imported goods: When imported goods for producing, selling goods and services subject to subtraction method VAT, the VAT on imported goods will be deducted: Dr. 133 VAT deductible 1331, 1332 Cr. 333 Tax and statutory obligations 33312 . If imported merchandises are used for production of goods and services not subject to VAT production or subject to VAT in direct method or used in State activities, projects, cultural and welfare activities etc. funded by State Budget, project budget or bonus and welfare funds, the VAT payable of imported merchandises should be recorded into value of that purchased merchandise: Dr. 152 Raw material Price including import VAT and import duties Dr. 156 - Goods Price including import VAT and import duties Dr. 211 Tangible assets Price including import VAT and import duties Cr. 333 - Tax and statutory obligations 33312 . 5. When purchased goods returned or reduced the price because of poor quality subject to returning Subtraction method VAT, based on documents of returning the goods to the seller and related documents, the accountant records the value of goods being purchased and then returned or reduced the price and the non-deductible VAT input: Dr. 111, 112, 331 total amount Cr. 133 - VAT deductible VAT input on purchased goods being returned or reduced the price Cr. 152, 153, 156, 211,... price excluding VAT 6. Purchased raw materials, goods, services and fi fixed assets are used for production of goods and services subject to VAT and not subject to VAT. However, the entity can not separately record the VAT deductible input: 6.1. Purchasing raw materials, goods, services, fixed assets: Dr. 152, 153, 156, 211, 213 price excluding VAT Dr. 133 - VAT deductible VAT input Cr. 111, 112, 331,... 6.2. At the end of the accounting period, the accountant must define the amount of deductible, nondeductible VAT input based on the proportion rate of revenue. The amount of non-deductible VAT input is deducted based on the rate % of sales from goods and services subject to VAT on the total sales from goods and services in the period. The amount of non-deductible VAT input in the period is recorded as following:

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC The amount of non-deductible VAT input in the period is recorded into cost of goods sold: Dr. 632 - Cost of goods sold Cr. 133 - VAT deductible 1331 . When the amount of non-deductible VAT input is with high value, therefore allocated into the cost of goods sold of several periods. The accountant transferrs the amount of nondeductible VAT input to the cost of goods sold of the next period: Dr. 142 - Short term prepaid expenses; or Dr. 242 - Long term prepaid expenses Cr. 133 - VAT deductible 1331 . Periodically, the accountant allocates the amount of non-deductible VAT input into the cost of ount goods sold of the next period: Dr. 632 - Cost of goods sold Cr. 142, 242,.... 7. When purchasing fixed assets and having VAT invoices used for both production of goods invoices and services subject to VAT and not subject to VAT, the accountant must record the value of the fixed assets with the price excluding VAT. VAT input is debited into account 133. At the end of the accounting period, the amount of VAT deductible input must be defined based on b the proportion rate of sales from goods and services subject to VAT on the total sales from services goods and services in the accouting period: Amount of VAT input is deducted in the period: Dr. 333 - Tax and statutory obligations 33311 Cr. 133 - VAT deductible 1332 . The amount of non-deductible VAT input is recorded into production costs relating to the usage of fixed assets: When the amount of non-deductible VAT input is great and has to be allocated: Dr. 142 - Short term prepaid expenses; or Dr. 242 - Long term prepaid expenses Cr. 133 - VAT deductible 1332 . Periodically, the accountant allocates the amout of non-deductible VAT input into cost: Dr. 623, 627, 641, 642,... Cr. 142 Short term prepaid expenses Cr. 242 Long term prepaid expenses long term allocation When VAT input is not deducted: Dr. 623, 627, 641, 642 Cr. 133 - VAT deductible 1332

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 8. Purchased raw materials, goods, services and fixed assets are damaged by natural disaster, fire, lost due to the the responsibility of an organization, individual who have to compensate. The VAT input on these goods will not be recorded into VAT deductible input when declaring the VAT: Purchased raw materials, goods, services, fixed assets are damaged and have not been found out the reasons: Dr. 138 - Other receivable 1381 Cr. 133 - VAT deductible 1331, 1332 Purchased raw materials, goods, services, fixed assets are damaged, when there are decisions of the authority to deal the compensation of the organization, individual: Dr. 111, 334 compensation receipts Dr. 632 - Cost of goods sold if being recorded into cost Cr. 138 - Other receivable 1381 Cr. 133 - VAT deductible If the reason is found out, decision on resolution must be immediately taken 9. Goods, services purchased for exporting are deducted, refunded VAT input when they meet for the conditions, proceduces and records for being refunded VAT input as the current regulations: VAT input on purchased raw materials, goods, services, fixed assets involving the export of goods, services being deducted, refunded as the current regulations is recored as purchasing current domestic raw materials, goods, services, fixed assets Refer to guidance on items 1, 2, 3 . assets When being refunded VAT input on exported goods, services if any : Dr. 111, 112,.... Cr. 133 - VAT deductible 1331 10. At the end of a month, the accountant defines VAT deductible input and VAT output when defining the amount of VAT payable in that period: Dr. 3331 - VAT payable 33311 Cr. 133 - VAT deductible 11. When an entity subject to subtraction method VAT frequently has amount of VAT input greater than amount of VAT output, the entity will be refunded VAT as regulated by the tax law. When receiving the refunded VAT: Dr. 111, 112,.... Cr. 133 VAT deductible 1331, 1332

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 136 INTER-COMPANY RECEIVABLE This account records the balance and movements of amounts receivable from parent companies, subsidiaries, divisions and affiliated companies. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. This account records receivables between the parent company and its subsidiaries or between subsidiaries. The holding companies should be trading/manufacturing entities and not just holding parent companies. The subsidiaries should have their own accounting system. 2. The contents of the inter-company receivable are as follows: a. In the parent companies Parent companies allotment of the subsidiaries business capital which has not been refunded subsidiaries or liquidated; The amount lent to subsidiaries that no interest is charged; The amounts to be received from subsidiaries; Amounts received by the subsidiaries on behalf of the parent company; Payments on behalf of the subsidiaries; a fixed amount given to the subsidiaries for internal assignment; Other receivable; In the subsidiaries: Allotment of the parent companies business capital which has not been received yet; business Lending; Amounts received on the subsidiaries behalf by the parent company or other subsidiaries; Payments on behalf of the parent company or other subsidiaries; Other receivable. This account is not used to record the investment of the parent company into its subsidiaries and the payment between the parent company and its subsidiaries. Account 136 should be maintained in detail with respect to the amount of the receivable and who it is from. Each of the entities should have their method with regards to collecting the inter-company receivables during the fiscal year. At the end of the fiscal year, reconciliations and confirmations on the transactions and the balances of account 136 Inter-company receivables should be prepared. The offset of
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b. 3.

4.

5.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC account 136 Inter-company receivable and account 336 Inter-company payable shall be applied for each item of the same entity. STRUCTURE AND RECEIVABLE Debit: Amount transferred to the subsidiaries including direct transfer or by other forms ; Payment on behalf of fellow group company; Amount to be received from the parent company or the subsidiary of the company; Fundable amount from the parent companies to the subsidiaries; Funded business capital of the subsidiaries. CONTENTS OF ACCOUNT 136 INTER-COMPANY

Credit: Refund of capital from the subsidiaries; The liquidation of funded capital for non-profit operations; Receipt of amounts receivable from inter-companies; Net off inter-company accounts payable against inter-company accounts receivable. against

Debit balance: Amount receivable from inter-companies. This account has two sub-accounts: Account 1361 - Investment in equity subsidiaries. This account is only used by parent companies subsidiaries. the General Corporation, holding companies to record current business capital in the subsidiaries which was funded by the parent compan The investment of parent company in the company. subsidiaries shall not be recorded in this account, but in account 221 Investment in subsidiaries . Account 1368 - Other receivable: To record all other inter-company receivables. MAJOR TRANSACTIONS I. Accounting for the subsidiaries 1. Parent on behalf of the parent/related companies: Dr. 136 Inter-company receivable 1368 Cr. 111 - Cash on hand Cr. 112 - Cash in bank 2. Calculation of the fundable bonus allowance business development fund in the fiscal period
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 136 Inter-company receivable 1368 Cr. 414 - Business development funds Cr. 415 - Reserved funds Cr. 431 - Bonus and welfare funds 3. Loss in operations is covered by the parent companies: Dr. 136 Inter-company receivable 1368 Cr. 421 - Undistributed earnings 4. Inter-company receivables on inter-company sales: Dr 136 Inter-company receivable 1368 Cr. 512 Inter-company sales 5. Receipt of the amounts receivable from inter-companies: Dr. 111 - Cash on hand Dr. 112 - Cash in bank Dr. 152 - Raw material Dr. 153 - Tools and supplies Cr. 136 Inter-company receivable 1368 6. Net off inter-company receivables against inter-company payables: Dr. 336 Inter-company payable Cr. 136 Inter-company receivable 1368 II. Accounting for the parent companies 1. Allotment of the business capital to the subsidiaries: Dr. 136 Inter-company receivable 1361 - Investment in equity of subsidiaries Cr. 111, 112, 2. Allotment of the business capital to the subsidiaries by fixed assets: Dr. 136 Inter-company receivable net book value 1361 Dr. 214 - Accumulated depreciation of fixed asset depreciated amount Cr. 211 - Tangible assets 3. In the case where the subsidiaries receive the business capital directly from the State Budget with the authorization of the parent companies: Dr. 136 Inter-company receivable 1361 Cr. 411 - Paid in capital 4. Increase of business capital in the subsidiaries due to the receipt of non-refundable aid or the purchase of fixed assets by basic construction capital and the business development fund: Dr. 136 Inter-company receivable 1361 Cr. 41 I - Paid in capital
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 5. At the end of the fiscal period, based on the approved financial statements of the subsidiaries, the accountant records the addition of the business capital from operating results: Dr. 136 Inter-company receivable 1361 Cr. 411 - Paid in capital 6. Transfer the State Budget to the subsidiaries: Dr. 136 Inter-company receivable 1368 Cr. 111, 112, 461, In the case where the State Budget is withdrawn to transfer to the subsidiaries for business capital, the accountant records simultaneously to credit account 008 Subsidies of State Budget off balance sheet accounts . 7. In the case where the subsidiaries submit the business capital to the State Budget with the authorization of the parent companies: Dr. 411 Paid in capital Cr. 136 Inter-company receivable 1361 8. Amounts receivable from the subsidiaries for management fees of the holding company: management Dr. 411 Paid in capital Cr. 136 - Inter-company receivable 1361 9. Amount receivable from the business profit of the subsidiaries during of the fiscal period: Dr. 136 Inter-company receivable 1368 Cr. 421 - Undistributed earnings 10. The amount receivable from the subsidiaries with regards to the investment and development fund, financial reserve fund, the bonus and welfare fund and other funds: Dr. 136 Inter-company receivable 1368 Cr. 414 - Business development funds Cr. 415 - Reserved funds Cr. 418 Other funds Cr. 431 - The bonus and welfare funds 11. Receipt of the amounts collected from the subsidiaries including profit earned, investment and development fund, financial reserve fund, bonus and welfare fund, and other funds: Dr. 111, 112, Cr. 136 Inter-company receivable 1368 12. Payment on behalf of the subsidiaries: Dr. 136 Inter-company receivable 1368 Cr. 111, 112, 13. Receipt of money for expenses paid on behalf of the subsidiaries:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 111 - Cash on hand Dr. I 12 - Cash in bank Cr. 136 Inter-company receivable 1368 14. Net off of inter-company receivables against inter-company payables: Dr. 336 Inter-company payable Cr. 136 Inter-company receivable 1368 15. Receivable of management fee from the subsidiaries: Dr. 136 Inter-company receivable Cr. 511 Sales in details

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 138 OTHER RECEIVABLE This account records the balance and movements of receivables and receipts other than those mentioned in account 131, 133 and 136. The content and scope of this account includes the following: 1. A shortage of assets awaiting to be resolved 2. Compensation receivable from individuals and groups both inside and outside the enterprise for losing or damaging materials, merchandise, cash, etc. that are resolved. 3. Receivables from short-term loans or leased materials temporarily that no interest is earned. 4. Payments for non-profit operations, construction and business expenditures that are not construction approved by the authority and should be recollected or suspended. 5. Such payment as bank charge, custom checking duty, transportation fee, handling fee, etc made by the export consignees on behalf of the export consignor. 6. Receivables generated from SOEs equitization such as equitization expenses, unemployment allowance, training expenses for employees in equitized entity. 7. Interest, dividend and gains from financial investment. 8. Other receivable. STRUCTURE AND CONTENTS OF ACCOUNT 138 – OTHER RECEIVABLE Debit: An unsolved asset shortage; Receivables from individuals and groups both in inside and outside the enterprise with respect to solved asset shortages; Receivables from equitizing SOEs; Receivables of interest, dividend and gains shared from financial investment; Other receivable.

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Credit: Transfer of the amount of the asset shortage into the relevant accounts according to the reason for the difference; Transfer receivables from the equitization; Receipts of other receivables.
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Debit balance: Other receivables still outstanding. This account could also have a credit balance when the amount received is greater than the receivable in special cases and should be show in detail for staff .

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Account 1381 Shortage of assets awaiting resolution: to record shortage in assets where no reason has been found. In principle, shortage of asset should be solved by the person responsible for the shortage and the reason should be determined. Account 1381 is used when the reason for lost or damaged property has not been determined. When both the person responsible and the reasons for the differences is determined at the time the differences are discovered, the differences should be directly booked to the relevant differences accounts, not to account 1381.

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Account 1385 – Receivable from equitization: to record equitization receivable that entity paid, such as equitized expenses, unemployment allowance and training expenses in equitized entity, etc. Account 1388 - Other receivable: to record other receivables except those already recorded in receivable: except account numbers 131, 133, 136 and 1381, 1385 such as receivable interest, dividend and and gains from financial investment; receivable of compensation for losing money, assets, etc.

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1. Shortage of tangible assets which are used for production and business, has been discovered for and no reason yet determined awaiting to solve: Dr. 138 Other receivable 1381 net book value Dr. 214 Accumulated depreciation depreciation value Cr. 211 Tangible assets historical cost This tangible asset must also be removed from the fixed assets register. 2. Shortage of tangible assets used for administrative activity, project or welfare activity has been discovered and no reason yet determined awaiting to solve: Dr. 214 Accumulated depreciation depreciated amount Dr. 466 Funds for established tangible assets net book value Dr. 4313 Bonus & welfare funds for established tangible assets net book value Cr. 211 Tangible assets historical cost At the same time, the accountant records the net book value of shortage assets waiting for resolution: Dr. 138 Other receivable 1381 Cr. 431 Bonus & welfare funds tangible assets used for welfare activity
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 338 Other payable tangible assets used for administrative activity, project

3. Shortage in materials, goods and cash on hand was found during the physical inventory count and no reason has yet been determined, awaiting to solve, as follows: Dr. 138 - Other receivable 1381 Cr. 152 - Raw materials Cr. 153 - Tools and supplies Cr. 155 - Finished goods Cr. 156 - Merchandise inventory Cr. 111 - Cash on hand 4. Based on the solving reports issued by the authorized body for the shortage of assets, the accountant must record shortages into the relevant accounts: Dr. 334 Payable to employees The compensation deducted into salary Dr. 138 Other receivable 1388 other receivable compensation Dr. 632 Cost of goods sold value of shortage after being deducted re receipt of compensation according to the resolving reports Dr. Other related accounts according to the resolving reports Cr. 138 Other receivable 1381 Shortage of assets awaiting resolution for 5. When both the person responsible and the reason for the shortage is determined at the time the shortage is discovered: Dr. 138 Other receivable 1388 Other receivable compensation Dr. 334 Payable for employees compensation deducted into salary Dr. 632 Cost of goods sold value of shortage after being deducted re receipt of compensation according to the resolving reports Cr. 621 Raw material cost Cr. 627 Overhead expenses Cr. 152 Raw materials Cr. 153 Tools and supplies Cr. 155 Finished goods Cr. 156 Merchandise goods Cr. 111 Cash on hand 6. Short term lease of materials, capital and other receivable, as follows: Dr. 138 Other receivable 1388 Cr. 111 Cash on hand Cr. 112 Cash in bank Cr. 152 Raw materials Cr. 153 Tools and supplies 7. Export consignee pays bank charge, custom checking fees, transportation fee, handling fee on behalf of the export consignor: Dr. 138 Other receivable 1388 total payments Cr. 111, 112 8. Periodically, receipts of earned interest, dividend and gains from shared investment:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 111, 112 total amount receipt Dr. 138 Other receivable 1388 Cr. 515 Financial income 9. When the export consignees clear the amount of payment on behalf, the accountant of the export consigner record as follows: Dr. 331 Trade payables Cr. 138 Other receivable 1388 10. Receipt of other receivable: Dr. 111 Cash on hand Dr. 112 Cash in bank Cr. 138 Other receivable 11. For State-Owned Enterprise, written off bad debts: Dr. 111 Cash on hand compensation of related individuals and groups Dr. 334 Payable for employees compensation deducted into salary Dr. 139 Provision for doubtful debts if being covered by provision for doubtful debts being Dr. 642 General and administration expenses if recorded in operating expenses expenses Cr. 138 Other receivable 1388 Other receivable At the same time, the accountant debits to account 004 sheet account. Bad debts written off - Off balance

12. The enterprise uses factoring with a debts and assets trading company for the other receivables represented on balance sheet . Dr. 111, 112 Receipt amount from factoring Dr. 139 Provision for doubtful debts Difference is covered by provision for doubtful debts Difference Dr. Other related accounts Difference between historical cost of bad debts and the receipts historical from factoring and the recovered amount by the provision for doubtful debts under current the financial management regulation Cr. 138 Other receivable 1388 13. Records expenses araising from equitization of the SOE: Dr. 1385 Receivable from equitization details by expenditures Cr. 111, 112, 152, 331 14. Records payments made to unemployed staff due to the transition from a SOE to a joint stock company: Dr. 1385 Receivable from equitization Cr. 111, 112 15. Records payments for training employees who are moved from equitized company: Dr. 1385 Receivable from equitization Cr. 111, 112, 331
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 16. When equitization process is finished, the enterprise must prepare the finalization report on expenditure araising from the equitization and submit this report to authorized agency. Total expenses for equitization, compensation for unemployed staff, training expenses etc. are deducted from the receipts from sales of State-owned securities after equitization of SOEs. Dr. 3385 Payables from equitization details of receipt from selling of securities belonging to State capital Cr. 1385 Receivable from equitization 17. Payment for funded projects, construction, production are not approved and must be recollected: Dr. 138 Other receivable Cr. 161, 241, 641, 642

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 139 PROVISION FOR DOUBTFUL DEBTS This account records the balance and movements of provision for doubtful debts. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS: 1. At the end of the fiscal year or the end of interim period for enterprises issued the interim financial statements , the accountant should identify doubtful debts or uncollectible amount to make/or reverse provisions for bad debts as general and administration expenses of the reporting period. 2. In principle, the provision for doubtful debts should be based on concrete evidence customers went bankrupt or their properties were damaged, lost etc. therefore they are requests unable to pay; the entity has sent many requests for payments but the amount remains receivables uncollected . Under current regulations, receivables are considered as bad debts once following evidences are provided: customers, Receivables are recorded in details of customers, descriptions, amount in which bad debts are clearly identified. Receivables are supported by original copy of invoice, or confirmation by customers including: signed contract, lease contract, contract liquidation, lease claim, reconciliation, etc.

3. The provision for doubtful debts should be made based on the following: The receivables are overdue following the signed contract, promissory note, engagement signed contract or bill. The entity has sent many requests for payments but the amount remains uncollected; The receivable is not due yet however customers went bankrupt or are in process of resolution or disappeared or run away.

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4. The provision for doubtful debts should be made in accordance with current regulations on financial management for enterprises. 5. The bad debts have been followed up in a few years. The entity has attempted to collect money but still not receive and the customers can still not pay. The entity could use factoring service from the debt and asset trading company or write off bad debts. If writing off bad debts, the accountant must also record in details in account 004 Bad debts written off Off balance sheet accounts . Writing off of bad debts must be approved by the board of management and the financial management committee in SOEs or authorized agency under the Company Charter. These bad debts should be followed up within period of time regulated by financial management regime to ensure whether the customers are able to pay. After writing off bad debts, these bad debts are recovered. The accountant records the recovered amount in account 711 Other income .

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC STRUCTURE AND CONTENTS OF ACCOUNT 139 - PROVISION FOR DOUBTFUL DEBTS Debit: Reverse provision for doubtful debts. Write off the bad debts.

Credit: Provision for doubtful debts charged as general and administration expenses.

Credit balance: Provision for doubtful debts at the end of the period.

MAJOR TRANSACTIONS: 1. At the end of the fiscal year or the end of the interim period for enterprise issued interim debts financial statements , if debts seem hardly collected bad debts , the accountant identifies the amount of bad debts that requires provision. If the provision required in this period exceeds the unused provision from the prior period, the difference should be recorded as expenses: the Dr. 642 General and administration expenses Cr. 139 Provision for doubtful debts 2. If the provision for doubtful debts required in this period is less than the unused provision for doubtful debts in the prior period, the accountant reverses the difference into expenses: accountant Dr. 139 Provision for doubtful debts Cr. 642 General and administration expenses details of reversed provision for doubtful details debts 3. The entity should write off the bad debts that are unrecoverable. Writing off bad debts must comply with the current regulations of financial systems. Based on the report of writing off bad debts approved by authorized body, the accountant records: Dr. 139 Provision for doubtful debts if provision already made Dr. 642 General and administration expenses if provision not yet made Cr. 131 Accounts receivable Cr. 138 Other receivable At the same time the accountant debits account 004 - Bad debts written off Off balance sheet account . 4. Bad debts which have been written off and subsequently recovered, the accountant records the receipt amount: Dr. 111, 112 Cr. 711 Other income At the same time, the accountant credits account 004 sheet accounts . Bad debts written off Off balance 67

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC

5. The entity can use factoring services provided by the debt and asset trading company. The factoring service is completed receivables presented on the balance sheet and money is collected, the accountant records: Dr. 111, 112 receipt resulted from factoring services Dr. 139 Provision for doubtful debts difference covered by the provision for doubtful debts Dr. Other relevant accounts difference between the historical cost of bad debts and the receipt amount resulted from factoring services and the amount covered by the provision for doubtful debts under current regulations of financial system Cr. 131, 138

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 141 ADVANCES This account records advances to staff, employees and liquidation of these advances. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. An advance is money or materials given to an employee to carry out their trading and production duties or to finish approved work. Advances should be given to a company s staff or employees. Employees who receive advances on a regular basis material supply department, administration department, etc should be appointed by the general director in writing. 2. Person receiving advances personally or on behalf of a group should be responsible for the advances and should use them for approved purposes only. Advances not used should be returned to the cashiers. The receiver could not transfer advances to other person. shed, When the work has been finished, the person who received the advance should prepare an advance settlement voucher enclosed original receipts . This voucher should record the amount of the advance received, the amount of the advance used and the difference between the amount received and the amount spent if any . Advances not used should be returned to the cashiers or net off against the employees salary. In case, the actual approved payments exceed the amounts advanced, the supplement will be paid by the company. supplement 3. Staff must liquidate the previous advance before requesting for another advance. advance record 4. The accountant should keep a sub-ledger and record every advance made by persons as well as record the settlement of advances. STRUCTURE AND CONTENTS OF ACCOUNT 141 - ADVANCES Debit: The amount of money or materials advanced to an employee. Credit: Amount of advances settled. Unused advances should be returned to the cashier or net off against the employees salary. Unused materials should be returned to the stock.

Debit balance: Outstanding advances not settled. MAJOR TRANSACTIONS 1. Cash or materials advanced to employees: Dr. 141 Advances Cr. 111, 112, 152
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 2. After finishing the works, the receiver of the advance should prepare an advance settlement voucher and attach all original receipts and approved documents to submit the accountant. Dr. 152, 153, 156, 241, 331, 621, 623, 627, 642 Cr. 141 Advances 3. The unused advance returned to the cashier or the store or net off against salary of the receiver: Dr. 111 Cash on hand Dr. 152 Raw materials Dr. 334 Payable for employees Cr. 141 Advances 4. Where the actual approved payments exceed the amounts advances, the accountant should prepare a payment voucher to pay the addition to the receiver: Dr. 152, 153, 156, 241, 621, 622, 627 Cr. 111 Cash on hand

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 142 PREPAID EXPENSES This account records payments which have not been expensed in the income statement of the current period and the allocation of this payment in the income statement in the periods that they relate within the fiscal year or the business cycle. Prepaid expenses are expenses which relate to several fiscal periods and they therefore can not be charged wholly to the current period but should be allocated to the coming periods in which they relate. THIS ACCOUNT MUST COMPLY WITH FOLLOWING TO REGULATIONS: 1. Prepaid expenses include: Rental expenses for showroom, workshops, stores, offices which have been paid for one stores, fiscal year or one business cycle. Expenses for renting services for one fiscal year or one business cycle. Insurance expenses fire insurance, transportation insurance, life insurance, etc. and fees paid for one fiscal year or one business cycle. cycle High value of tools and supplies which are considered current asset and used in less than one considered fiscal year. The value of rotating packaging and tools for lease which is used in one fiscal year or a lease business cycle as maximum. Expenses for purchase technical documents and other prepayment which are allocated to income statement within one fiscal year or one business cycle. Expenses during breaks in operations unpredictable . value Repair expenses for fixed assets with a large valu that should be allocated for several periods monthly, quarterly in one fiscal year or one business cycle. Other prepaid expenses i.e. prepayment of loan interest, prepayment of interest on instalment purchase, instalment payment .

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2. Account 142 is only used for expenses which relate to several fiscal periods with high value and occur only once and can not be allocated to one period. Enterprise must identify and strictly stipulate the contents of account 142 Prepaid expenses . 3. Based on the nature of the expenses, the methods and criteria of calculation along with the allocation of prepaid expenses into manufacturing and trading expenses would be chosen. The accountant should record the details of prepaid expenses; the amount allocated into overhead, selling and administrative expenses; and the remaining unallocated balance. 4. Repair expenses for fixed assets with large value, can be allocated in several periods within a fiscal year. Some specific fixed assets that the repair occurs on regular basis can be allocated in general and administration expenses.
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STRUCTURE AND CONTENTS OF ACCOUNT 142 – PREPAID EXPENSES Debit: Actual prepaid expenses. Credit: The prepaid expenses are allocated period. Debit balance: Prepaid expenses which have not been taken into general and administration expenses. MAJOR TRANSACTIONS 1. Prepaid expenses relating to several periods in a fiscal year: a. Prepaid expenses is for production of goods and services which are subject to subtraction and method VAT: Dr. 142 Prepaid expenses Dr. 133 VAT deductible if any Cr. 111 Cash on hand Cr. 112 Cash in bank Cr. 152 Raw materials Cr. 153 Tools and supplies Cr. 241 Construction in progress 2413 Cr. 331 Account payables Cr. 334 Payable for employees Cr. 338 Other payables b. Prepaid expenses is for production of goods and services which are either subject to VAT in direct method or not subject to VAT: Dr. 142 Prepaid expenses total payments Cr. 111 Cash on hand Cr. 112 Cash in bank Cr. 141 Advances Cr. 331 Account payables 2. Fixed assets are operating lease office, manufactory, shop, etc. . Enterprises prepaid leases for several periods in the fiscal year. Leased assets are used in production of goods and services which are subject to subtraction method VAT: Dr. 142 Prepaid expenses lease price excluding VAT Dr. 133 VAT deductible if any Cr. 111, 112
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Leased assets are used in production of goods and services which are subject to VAT in direct method or not subject to VAT: Dr. 142 Prepaid expenses total payments Cr. 111, 112 3. The entity should be periodically allocated to general and administration expenses: Dr. 241 Construction in progress Dr. 623 Machines expenses Dr. 627 Factory overhead expenses Dr. 641 Selling expenses Dr. 642 General and administration expenses Cr. 142 Prepaid expenses useful 4. Tools and supplies are with high value and their useful life is within one year that should be allocated in several periods monthly, quarterly in one fiscal year: Tools and supplies are put in use. Based on goods dispatch notes, the accountant records: Dr. 142 Prepaid expenses Cr. 153 Tools and supplies Periodically tools and supplies should be allocated following reasonable criteria. The number allocated of allocations for tools and supplies should be based on the time used or the volume of production in which tools are used in the accounting period: Dr. 623, 627, 641, 642 Cr. 142 Prepaid expenses 5. When a large amount of money has been spent to repair fixed assets which will be allocated into several operating periods, the following entry is made when the repair is completed: entry Dr. 142 Prepaid expenses Cr. 241 Construction in progress 2413 6. Calculation and allocation of the repair e expenses into the manufacturing and business expenses in several accounting periods: Dr. 623 Machine expenses Dr. 627 Factory overhead expenses Dr. 641 Selling expenses Dr. 642 General and administration expenses Cr. 142 Prepaid expenses 7. When the initial direct expenses relating to financial lease assets occur in negotiation, signing the contract, etc. before lease assets received, the accountant records: Dr. 142 Prepaid expenses Cr. 111, 112 8. The initial direct expenses relating to financial lease assets is recorded into the historical cost of financial lease assets:
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Dr. 212 Financial lease assets Cr. 142 Prepaid expenses transferring the initial direct expenses of the financial lease assets occurred before the assets received Cr. 111, 112 amount of direct costs relating to financial lease assets to receive the lease assets 9. The entity made the prepayment for the interest payable: Dr. 142 Prepaid expenses Cr. 111, 112 Periodically, interest payable should be allocated in proper periods: Dr. 635 Financial expenses If borrowing costs are recorded into production and business expenses Dr. 241 Construction in progress If borrowing costs are capitalized in the value of construction investment assets borrowing Dr. 627 Factory overhead expenses If borrowing costs is capitalized in the value of uncompleted assets Cr. 142 Prepaid expenses

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 144 SHORT-TERM MORTGAGES, DEPOSITS AND COLLATERAL This account records the entity's assets and capital which are mortgaged, deposited and used as short-term collateral within one year or a normal production and business cycle at the banks, financial companies, State Treasury, credit institutions. Mortgages are that the entity brings its assets to lender to borrow money or to gain the guarantees. The mortgages can be gold, silver, gemstones, precious metals, bonds, stocks, cars, motorbikes, etc. or ownership certificates of a house, land or other assets. During the mortgaging period, the entity may not use these assets. After paying off the loan the entity may take back the assets. upt, If the entity is unable to pay the loan, or goes bankrupt, the mortgages can be sold by the lender to recover the unpaid loan. Deposit is that entity paid an amount of money or gemstones, precious metals or any documents with value into the block account at bank to ensure guarantee for the enterprise. Collateral is that the assets lessee paid to the lessor an amount of money or gemstones, precious lessor metals or other things with value. The collateral serves to bind and hold the lessee responsible for collateral the leased assets including managing the asset, using the asset properly and returning the asset on time. The amount of the deposit required by the lessor may be equal to or higher than the actual lessor asset value. Short term deposits, mortgages and collateral are recorded in account 144 Short term mortgages, recorded deposits and collateral at the book value. The value recorded when the assets are given and when assets value they are returned is the same. STRUCTURE AND CONTENT OF ACCOUNT 144 - SHORT TERM DEPOSITS, MORTGAGES AND COLLATERAL Debit: The value of assets mortgaged, and the value of assets or money deposited or used as short term collateral. Credit: Receive back the mortgaged assets, assets or deposits or used as short term collateral. Debit balance: The mortgaged assets, assets or deposits used as short term collateral. MAJOR TRANSACTIONS 1. Use cash, gold, silver, precious metals, gemstone, or cash in bank to make a deposit or use as collateral: Dr. 144 Short term deposits, mortgage and collateral Cr. 111 Cash on hand 1111, 1112, 1113 Cr. 112 Cash in bank 1121, 1122, 1123
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2. Pledges fixed assets: Dr. 144 Short term deposits, mortgage and collateral recovered value Dr. 214 Accumulated depreciation depreciation value Cr. 211 Tangible assets historical cost Documentation of assets mortgaged ownership certificates of land, houses, assets are not recorded in this account but in the detail ledger. 3. Take back the mortgages, deposits and short term collateral: 3.1 Take back the mortgaged assets: Dr. 211 Tangible assets mortgaged value , Cr. 144 Short term deposits, mortgage, and collateral net book value Cr. 214 Accumulated depreciation depreciation value 3.2 Take back the money, gold, silver, precious metals and gemstones from the deposit, and short fro term collateral: Dr. 111 Cash on hand 1111, 1112, 1113 Dr. 112 Cash in bank 1121, 1122, 1123 Cr. 144 Short term deposits, mortgage, and collateral deposits, 4. As the entity broke commitment, the fine should be deducted into the value of the short term deposit: Dr. 811 Other expenses deduction amount Cr. 144 Short term deposits, mortgage, and collateral deposits, 5. The entity does not pay the good consignor. The consignor asks to deduct the payable into the the deposit. When getting the advice from the consignor, the accountant records: Dr. 331 Account payables , Cr. 144 - Short term deposits, mortgage, and collateral

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC GROUP 15 INVENTORIES These accounts represent the current value and movement of the entities inventory if applying the perpetual method or the opening balance and closing balance of the entities inventory if applying the periodic method . Inventory is classified as current assets which are held for sale in the normal production and business period; in the on-going process of production and business; raw materials, materials, tools and supplies for use in production of goods and services. Inventories consist of goods purchased for trading merchandises, property, goods in transit, goods on consignment, goods for further processing ; finished goods and finished goods on consignment, work in progress incomplete products and completed products not yet going through the procedures for being put into stores of finished products ; raw materials, materials, tools and supplies in stock, sent for processing, and already purchased but being transported en route.

Accounting inventories is reflected in group 15. It must comply with the following Standard regulations of Vietnamese Accounting Standard No. 2 Inventories determination of the original price of inventories, the method of the calculating value of inventories, the markingdown of inventories to suit the net realizable value, determination of the provision for decline value, in inventory and accounting it as expenses The principle of determination of the original price of inventories is regulated specially for each material, merchandise; as well as each the source and the time of the calculating value Entity pays VAT in subtraction method, goods and services which used for production, goods business activities and belong to VAT payer under the deduction method, their value are the under buying price non-refundable taxes Entity pays VAT in direct method, goods and services which are not belong to VAT payer; or are used for the administrative, welfare activity, and project activities; the value of the activ purchasing goods, services is total payments including VAT 5. The value of inventories shall be calculated according to one of the following methods: a. Specific identification method: The specific identification method is based on the actual value of the each purchasing merchandise, each product so this method shall apply to enterprises having a few goods items or stable and identifiable goods items.

the value of each kind of inventories shall be calculated according to the average value of each similar kind of goods at the beginning of the period and the value of each kind of inventories purchased or manufactured in the period. The average value may be computed either according to periods or the time when a goods lot is warehoused, depending on the enterprise s situation.
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c. The First-in, First-out method FIFO shall apply upon the assumption that the first inventories purchased or manufactured is the first inventories delivered, and the inventories left at the end of the period are those purchased or produced at a time close to the end of the period. By this method, the value of the delivered goods shall be computed according to the price of the lot of goods warehoused at the beginning of the period or at a time shortly after the beginning of the period, the value of the inventories shall be computed according to the price of the goods warehoused at the end of the period or at a time shortly before the end of the period. d. The Last-in First-out method LIFO shall apply upon the assumption that the most recently purchased or manufactured inventories are delivered first, and the inventories left at the end of the period are those which are purchased or produced earlier. By this method, the value of the delivered goods shall be computed according to the price of the lot of goods warehoused most recently or shortly earlier; the value of the inventories shall be computed according to the price of the goods warehoused at the beginning of the period or shortly after the beginning of the period, which still remain in stock. advantages Each of the above methods has certain advantages and disadvantages. The reliance and depends accuracy of each of the above methods depends on management demands, the staff ability capabilities and skill and the equipment and data processing capabilities of the entity will all be factored in when choosing one of the above methods. In addition it also depends on the maintaining movements demands, specifications, recipes, and movements of inventory within the entity. 6. For materials, merchandises purchase in foreign currency, the enterprise must be based on the spot exchange rate or the average exchange rate on ruling the Vietnam State Bank at the time currency of the transaction is made, the foreign currency should be converted in to Vietnam dong to record inventory. 7. At the end of the accounting period of the year, if the value of inventories can not be fully outmoded, recovered because of being damaged, outmoded, as well as their selling prices fall or the finishing and/or sale costs rise, the marking-down of inventories has to the level equal to the net realizable value. The net realizable value is the estimated selling price of inventories in a normal production and business period minus - the estimated cost for completing the products and the estimated cost needed for their consumption. equa The marking-down of inventories to the level equal to the net realizable value have to set up provision for obsolete stock. The amount of the provision for obsolete stock setting up is the difference between the original price and the net realizable value. 8. When selling inventories, the original price of goods sold shall be recorded as cost of production and business in the period in consistence with the recognized turnover related thereto. All the difference between the higher inventory price decrease reserve to be set up at the end of the current year s accounting period and the lower inventory price decrease reserve already set up at the end of the previous year s accounting period, volumes of damaged and lost inventories, after subtracting the compensations paid by individuals due to their liabilities, and unallocated factory overhead expenses, shall be recognized as production and business expense in the period. Where the inventory price decrease reserve to be set up at the end of the current year s accounting period is lower than the inventory price decrease reserve already set up at the end of the previous year s accounting period, the difference there of must be added and recorded as decrease in production and business expense. 9. An entity must keep detailed records of both the value of inventory as well as the inventories
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC physical characteristics, inventory specifications and model numbers and where the inventory is being used; must also keep track of the value and quantity of actual inventory and recorded inventory in general ledger and sub-ledger. The enterprise may choose one of three detail records as follows: Double inventory card system; Inventory movement reconciliation; Inventory balance reconciliation.

2. An enterprise only uses one of two inventory methods: perpetual method or periodic method. The choice of inventory accounting method depends on the characteristics of the enterprise s inventory, type of inventory, specifications of the inventory and management s demands for applying consistently during the accounting period. INVENTORY ACCOUNTING METHODS a. Perpetual method The perpetual method is the method for recording and reflecting of the movement of recording inventory perpetually, continuously and systematically on the accounting ledger. In the case, the enterprise applies the perpetual method, inventory accounts are used for applies recording the balance and the increase and decrease movement of inventories. So that, the decrease value of inventories in accounting book can be determined any time in the accounting period. At the end of the period, the enterprise bases on the actual value of inventories to compare and investigate with the recorded inventories. Theoretically, the physical count should always agree to the accounting records. If having any variance, the enterprise must find reason and resolved on a timely basic. The perpetual inventory method is often applied in manufacturing companies industry, applied construction, etc. and trading enterprises with high value merchandise, such as, machinery, equipment, goods of high quality, and technologically advanced goods. b. Periodic method The periodic method is the record method based on the physical inventory count for reflecting of the balance of inventories in the general accounting ledger at the end of the period and from there calculating of the output value of inventories during the period following the formula below: Stock-out = Opening balance + Stock-in Closing balance

According to the method, the movement of inventory stock-in and stock-out is not recorded in the inventory accounts. The value of stock-in inventories in the period is recorded to a specific account account 611 Purchases . The stock-taking must be taken at the end of the fiscal period in order to determine the actual
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC balance of inventory, the value of stock-out used for production or selling . It is also used as a base to record account 611 Purchases . Hence, when enterprise applies the periodic method, inventory accounts is only used at the beginning of the accounting period to reallocate the opening balance and at the end of the accounting period to record the ending inventory balance . The periodic method is applied in those entities which have many types of raw materials and merchandise with very different specifications, low value and used or sold perpetually retail shop, etc . The advantages of the periodic method are simple and greatly reduce the amount of accounting work required. However, the accuracy of inventory used/sold during the period is affected by the quality of management in the warehouse and at the counter or at the port. The inventory group has nine sub-accounts: Account 151 - Goods in transit; Account 152 - Raw materials; Account 153 - Tools and supplies; Account 154 - Work in progress; Account 155 - Finished goods; Account 156 Merchandise goods; Account 157 - Goods on consignment; Account 158 Goods in bonded warehouse; Account 159 - Provision for obsolete stock.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 151 GOODS IN TRANSIT This account records the value of goods and materials raw material, tools and supplies, merchandise purchased that title has been transferred, however the goods are still in transit, at the port or arrived to the entity s premise yet waiting for being taken into store. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS: 1. Goods and materials which have not been received but are considered as belonging to the entity include: Goods and materials which have been purchased and paid for, or the company has accepted to pay for, but goods and materials are still in the supplier's warehouse, port or in transit; Goods and materials are in the entity s warehouse but they have not been inspected and the warehouse receiving notes has not been prepared

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2. Goods in transit is recorded to account 151 at cost as regulated in Vietnamese Accounting Standard No. 02 Inventories . received 3. Every day when purchase invoices are received before the goods are delivered, the accountant will not record into book, but perform reconciliation between the invoice and the perform contract and file the invoice in the "purchased goods in transit" file. During the month, upon receiving the goods, based on the receiving notes and selling invoice the accountant records directly to account 152 Raw materials , account 153 Tools and supplies and account 156 Merchandise goods , account 158 Goods in bonded warehouse . At the end of the month, if the goods have still not been received, based on the invoice the accountant records the amount of purchase to account 151 Goods in transit . 4. The accountant must record details and keep track of goods in transit by type, by shipment, or by economic contract. STRUCTURE AND CONTENTS OF ACCOUNT 151 – GOODS IN TRANSIT ACCOUNT Debit: Value of goods and materials in transit; Allocation of the closing balance of goods in transit at the end of the period if the entity applies the periodic inventory method .

Credit: Value of goods in transit received or shipped to the customer; Reallocation of the beginning balance of goods in transit to purchases if the entity applies the periodic inventory method .

Debit balance:
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Goods have been purchased but are still in transit have not been put into the enterprise warehouse . MAJOR TRANSACTIONS I. Where the company uses the perpetual inventory method: 1. At the end of the period, based on selling invoice of goods in transit used for production of goods and services subject to subtraction method VAT to record: Dr. 151 Goods in transit buying price excluding VAT Dr. 133 VAT deductible Cr. 331 Trade payable Cr. 111, 112, 141 If goods in transit are used for production of goods and services not subject to VAT or subject goods to subtraction method VAT: Dr. 151 Goods in transit total payments Cr. 111, 112, 331 2. Upon receiving the goods in the subsequent month, based on invoice and receiving notes to record: Dr. 152 Raw materials Dr. 153 Tools and supplies Dr. 156 Merchandise goods Cr. 151 Goods in transit 3. In the case where the goods do not go through the company s warehouse but are directly warehouse, delivered to the customer from the supplier s warehouse, from the port, or directly shipped to the agent on consignment: Dr. 632 Cost of goods sold Dr. 157 Goods on consignment Cr. 151 Goods in transit 4. In the case where goods in transit are damages or losses detected immediately or when stock count, based on the minute of damages and losses, the accountant records the losses as follows: Dr. 1381 Shortage of assets awaiting resolution Cr. 151 Goods in transit II. Where the company uses the periodic inventory method: 1. At the beginning of the fiscal period, the opening balance of goods in transit is reallocated to purchases: Dr. 611 Purchases Cr. 151 Goods in transit
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 2. At the end of the period, based on count results of goods in transit to record: Dr. 151 Goods in transit Cr. 611 Purchases

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 152 RAW MATERIALS This account records the current value and movement of the raw materials in the enterprise s warehouse. Raw materials owned by the enterprise are used in the manufacturing process and can be purchased or produced. Raw materials recorded in this account are classified as follows: Raw materials; Supplies; Fuel oil; Spare parts; Construction materials and equipment.

: 1. Raw materials: Raw materials are the major element used during manufacturing process to raw produce main products. The definition of raw materials depends on each specific entity, manufacturing entity. In trading and services entity, there is not definition for raw materials semi-finished or supplies. Raw materials also include semi-finished goods purchased from outside for continuing of manufacturing process. 2 : Supplies: Supplies are not a major element in manufacturing process, therefore do not form the main products. Supplies are used to change the product colour, taste, appearance of change products, higher the products quality, or facilitate the processing, or serve the technical facilitate needs, preservation and packaging in manufacturing process.

: 3. Fuel oil: This is used to provide heat energy in manufacturing process and to facilitate processing. Fuel oil can be in the form of liquid, air or solid. : 4. Spare parts: Spare parts are used to repair or replace machines, equipments, tools and supplies, vehicles, etc. 5. Construction materials and equipments These are materials and equipment used for equipments: construction. Construction equipments include installed equipment, non-installed equipment, tools, instruments and construction parts used to install in construction. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Raw materials input and output are recorded in account 152 at cost as regulated in Vietnamese Accounting Standard No. 2 Inventories . The cost of raw materials is determined according to each source. 1.1 The cost of raw materials purchased consist of: the buying price on invoice, import duty, special consumption tax if any , expenses for transportation, loading and unloading, preservation, classification and insurance, etc. incurred in the buying process of materials, per diem of purchasing officers, expenses of the purchasing department and other costs directly relating to the purchase and losses within norm if any .
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC If the entity purchases raw materials used for production of goods and services subject to subtraction method VAT, the value of materials purchased is recorded at buying price excluding VAT. VAT inputs of materials purchased and of transportation, handling, preservation, processing, etc. are deducted and record to account 133 VAT deductible 1331 . If the entity purchases raw materials used for production of goods and services not subject to VAT or subject to subtraction method VAT, or used for social and welfare activities, the value of materials purchased are recorded at total amount including non-VAT deductible if any . If raw materials are purchased in a foreign currency, the purchase must be converted into VND using the actual exchange rate or the average inter-bank exchange rate ruling by the ansaction State Bank of Vietnam at the time of the transaction and recorded to the value of raw materials.

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1.2 The original price of raw materials processed consists of the actual raw materials cost and processing cost. 1.3 The original price of raw materials sent for processing consists of the materials cost, transportation fee to and from the processing plant and the processing fee paid to the processor. plant 1.4 The original price of raw materials contributed to an joint venture is the actual cost accepted by the parties and shareholders. 2. The actual of raw materials is determined by one of the following methods: determined Specific identification method; Weighted average method after each input or at the end of the period; First-in, First-out method; Last-in, First-out method. The enterprise must apply one of the above methods consistently during the accounting period. 3. Detailed records of raw materials must be maintained for each stock, each group and each type of raw materials.

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4. If raw materials are recorded in the accounting books at their recorded cost, the actual cost of raw materials used will be calculated at the end of the accounting period based on the following formula: Index of the difference between actual cost and recorded cost of raw materials 1 Actual cost of beginning balance of raw materials = Recorded cost of beginning balance of raw materials in period = Recorded cost of raw materials issued in period X + Recorded cost of raw materials purchased in period + Actual cost of raw materials purchased in period

Actual cost of raw materials issued in period

Index of the between actual cost and recorded cost of raw materials

STRUCTURE AND CONTENTS OF ACCOUNT 152 – RAW MATERIALS Debit: The actual value of raw materials put in store, purchased, produced, sent out for processing, store, contributed, or from other sources; Surplus of raw materials detected during the physical inventory count; Allocation of the closing balance of raw materials if the company uses the periodic inventory materials method .

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Credit: The actual value of raw materials used in the production, sold, sent for outside processing, or raw materials contributed to a joint venture; Value of raw materials returned to supplier and discounts from supplier; Purchase discounts received; Shortage of raw materials detected during the physical inventory count; Reallocation of the opening balance of raw materials if the company uses the periodic inventory method .

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Debit balance: Value of raw materials inventory. MAJOR TRANSACTIONS I. Where the entity uses the perpetual inventory method: 1. When purchasing raw materials and putting into the enterprises warehouse, the value of raw materials is recorded based on the invoice, received note and related documents:
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Where raw materials used for production of goods and services subject to subtraction method VAT: Dr. 152 Raw materials buying price excluding VAT Dr. 133 VAT deductible 1331 Cr. 111, 112, 141, 331 Total amount

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Where raw materials used for production of goods and services subject to subtraction method VATor not subject to VAT, or used for social and welfare activity: Dr. 152 Raw materials Total amount Cr. 111, 112, 141, 311, 331 Total amount

purchase 2. In the case where the entity received purchase discounts, raw materials purchased are recorded at reduced price: Dr. 111, 112, 331 Cr. 152 Raw materials Cr. 133 VAT deductible 1331 if any 3. If raw materials purchased do not agree to the raw materials particulars in the signed contract, they will either be returned to the supplier or the supplier will offer a discount. The supplier accountant will record the materials returned or at discounted price: returned Dr. 111, 112, 331 Cr. 152 Raw materials buying price excluding VAT Cr. 133 VAT deductible 1331 if any 4. Invoices in which the raw materials have not yet been received by the enterprise are filed in a separate purchased goods in transit folder. 4.1. Upon receiving the raw materials during the month, the accountant records to account 152 Raw materials based on the invoice and receiving note. 4.2. At the end of the month, if raw materials have still not been received, based on the invoice s where raw materials used for production of goo and services subject to subtraction method goods VAT the accountant records: Dr. 151 Goods in transit Dr. 133 VAT deductible 1331 Cr. 331 Trade payable Cr. 111, 112, 141 In the following month, upon receiving the materials, based on the invoice and receiving note the accountant records: Dr. 152 Raw materials Cr. 151 Goods in transit 5. Actual discounts given by the supplier are recorded upon payment as follows: Dr. 331 Trade payable
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 515 Financial income purchase discount

6. Imported raw materials: If imported materials are used for production of goods and services subject to subtraction method VAT, the original price of import raw materials is recorded according to the price including import duty as follows: Dr. 152 Raw materials price including import duty Cr. 331 Trade payable Cr. 3333 Import, export duties details of import duty At the same time, a VAT deductible of imports shall be recorded: Dr. 133 VAT deductible Cr. 3331 VAT payable 33312 -

VAT of import goods

If imported materials are used for production of goods and services subject to subtraction method VATor not subject to VAT, or used to administration and project activities; the original price of import raw materials according to the price including import duty and VAT of import goods: Dr. 152 Raw materials including import duty and VAT of import goods Cr. 331 Account payable Cr. 3333 Import, export duties Cr. 3331 VAT payable 33312

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If imported materials are subject to special consumption tax, the tax payable must be included consumption in the original price. Dr. 152 Raw materials the price includes special consumption tax of import goods Cr. 331 Trade payable Cr. 3332 Special consumption tax

7. In the case, raw materials purchased for use in production of goods and services subject to subtraction method VAT, the cost incurred from purchasing, handling and transportation from supplier s place to the enterprise s warehouse is recorded as follows: Dr. 152 Raw materials Dr. 133 VAT deductible 1331 Cr. 111, 112, 141, 331 8. Raw materials sent out for further processing: When the entity sent raw materials out for further processing: Dr. 154 Work in progress Cr. 152 Raw materials If processing cost incurred, the cost is recorded as follows: Dr. 154 Work in progress
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 133 VAT deductible 1331 if any Cr. 111, 112, 131, 141 When the entity received processed materials: Dr. 152 Raw materials Cr. 154 Work in progress 9. Raw materials produced by the entity itself: When the materials put in production for further processing: Dr. 154 Work in progress Cr. 152 Raw materials When the self made materials put into warehouse: Dr. 152 Raw materials Cr. 154 Work in progress 10. The surplus of raw materials detected during the physical inventory count. If the entity has found reason, the surplus will be recorded based on the result. If the entity has not found reason, the surplus will be recoded as follows: Dr. 152 Raw materials Cr. 338 Other payable 3381 Surplus of assets awaiting resolution Where the resolution on the surplus detected in physical count is given, based on the resolution the following is recorded: Dr. 338 Other payable 3381 Cr. Related accounts If the surplus is determined as belong to other parties immediately after the physical inventory count that has not been recorded in account 152, the surplus is debited to account 002 Goods held under trust or for processi processing not to account 338 3381 . Where the materials returned to those parties, a single entry is credited into account 002 Off balance sheet accounts .

11. Where raw materials put into production: Dr. 624 Raw materials cost Dr. 623, 627, 641, 642 Cr. 152 Raw materials 12. Where raw materials used for construction or for repair of fixed assets: Dr. 241 Construction in progress Cr. 152 Raw materials 13. Raw materials transferred to contribute in an jointly controlled entities: a. Where raw materials are transferred to contribute in an joint venture:
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Dr. 222 Share in joint venture revalued amount Dr. 811 Other expenses difference of revalued amount and the lower book value Cr. 152 Raw materials book value Cr. 711 Other income Difference of greater revalued amount and the book value of raw materials in correspondence with the benefit of other parties in the venture . Cr. 3387 Deferred income Difference of greater revalued amount and the book value of raw materials in correspondence with the benefit of other parties in venture b. When jointly controlled entities sell finished goods which are produced from contributed raw materials, or sell contributed raw materials to an independent third party, the contributors allocate deferred income to other income in the period: Dr. 3387 Deferred income Cr. 711 Other income 14. Where raw materials transferred to contribute in associates: Dr. 223 Investment in associates revalued amount Dr. 811 Other expenses Difference of lower revalued amount and the book value lower Cr. 152 Raw materials greater Cr. 711 Other income Difference of greater revalued amount and the book value 15. Shortage of raw materials detected during the physical inventory count: When shortage of raw materials in store or preservation place is detected in the physical the inventory count, report must be prepared and the solution and the person in charge must be found out. Based on the physical inventory count and resolution made by authorized person, the accountant records the followings: If the shortage is due to an error or not yet recorded, an adjustment should be made in the accounting records. If the shortage is resulted from damage within permitted range damage in norm : Dr. 632 Cost of goods sold Cr. 152 Raw materials If the reason for shortage has not yet been identified and awaiting for resolution, the damage shall be recorded as follows: Dr. 138 Other receivable 1381 Cr. 152 Raw materials Shortage of assets awaiting resolution

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Where the resolving report is issued by the authorized person, basing on the resolving report should be recorded: Dr. 111 - Cash on hand if the person in charge paid the compensation for the loss Dr. 138 Other receivable compensation must be paid by the person in charge Dr. 334 Payable for employee compensation deducted into the salary of the person in charge Dr. 632 Cost of goods sold the remained damages should be charged to cost of goods sold Cr. 138 Other payable 1381 Shortage of assets awaiting resolution
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II. Where the company uses the periodic inventory method 1. At the beginning of the period, the opening balance of raw materials is allocated to the purchases account: Dr. 611 Purchases Cr. 152 Raw materials 2. At the end of the period, based on the result of the physical inventory count, the closing balance of raw materials is recorded as follows: Dr. 152 Raw materials Cr. 611 Purchases

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 153 TOOLS AND SUPPLIES This account records the current value and movement of tools and supplies of the enterprise. Tools and supplies are materials which are not valuable and durable enough to be considered as fixed assets. Therefore, tools and supplies are accounted for as materials. According to the current regulations, the following materials are not considered as fixed assets but tools: Temporary tents, tools and supplies and special assembled tools used for the construction; ed Packing materials which are attached to the goods but their value is not included in the value ng of the goods that is depreciated during preservation, transportation and usage; Glass and ceramic equipment; Management and office equipment; Professional working clothes and shoes, etc.

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THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Accounting for tools and supplies in account 153 is recorded at cost. The cost of tools and supplies should be determined as regulated for raw materials see guidance in account 152 . 2. The value of tools and supplies will be calculated according to one of the four methods that calculated are regulated in Vietnamese Accounting Standard No. 2 Inventories . 3. Detailed records for tools and supplies must be maintained by group, store or type. 4. Tools and supplies which are issued for production, trading or rental must be kept track in value and quantity in accounting book, location of the tools and supplies are to be used; the name of the lessee and the person in charge. High value or valuable tools and supplies must High be preserved in a special way. 5. Low value tools and supplies which are issued for production must be recorded all in one time in production and business expense. 6. Where high value tools and supplies which are issued for production within one year shall be recorded into account 142 Prepaid expenses and allocated to production and business expense for several periods in the year. 7. Where high value tools and supplies which are issued for production over one year shall be recorded into account 242 Long term prepaid expenses and allocated to operating and business expenses.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC STRUCTURE AND CONTENTS OF ACCOUNT 153 – TOOLS AND SUPPLIES Debit: The actual value of tools and supplies purchased, produced, sent out for processing, or contributed; The actual value of tools and supplies received back from the lessee. Surplus of tools and supplies detected during the physical inventory count. Allocation of the closing balance of tools and supplies if the entity uses the periodic inventory method .

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Credit: The actual value of tools and supplies used for production, trading, leasing or contribution to a joint venture; Purchase discounts received from supplier when the entity purchased tools and supplies; Value of tools and supplies returned to suppliers or discounted by supplier; Shortage of tools and supplies detected during the physical inventory count; Reallocation of the beginning balance of tools and supplies if the entity uses the periodic tools inventory method .

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Debit balance: The actual value of tools and supplies in the stock. Account 153 – Tools and supplies has three sub-accounts: Account 1531 - Tools and supplies: to record the current value and movement in tools and supplies. Account 1532 - Reusable packaging material: to record the current value and movement in reusable packaging materials used in the course of operations in which reusable packaging materials are used several times. The used value of reusable packing material will be charged gradually into operating and business expense over several periods. Account 1533 - Tools for leasing: to record the current value and movement in tools and supplies for leasing. Only tools and supplies purchased for leasing are recorded into this account. Other tools and instruments that are not classified as above will be recorded into account 1531 Tools and supplies which were used in the operations of the entity but are now being leased should be also recorded into this sub-account.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC MAJOR TRANSACTIONS I. Where the company uses the perpetual inventory method 1. Value of tools and instruments purchased for production of goods and services subject to subtraction method VAT will be recognized at the buying price excluding VAT. The accounting entry is recorded based on invoices, received note and related documents: Dr. 153 Dr. 133 Tools and supplies the price excluding VAT VAT deductible Input VAT 1331 Cr. 111, 112, 141, 331 Total amount

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Value of tools and supplies purchased for production of goods and services subject to VAT in direct method or not subject to VAT, or for social and welfare activities: Dr. 153 Tools and supplies Total amount Cr. 111, 112, 331 Total amount

2. Where Tools and supplies purchased are given discounts: Dr. 111, 112, 331 Cr. 153 Tools and supplies discount amount Cr. 133 VAT deductible 1331 3. Where tools and instruments purchased are given discounted due to not comply with specification, quality in the contract: Dr. 111, 112, or Dr. 331 Trade payable Cr. 153 Tools and supplies discount amount Cr. 133 VAT deductible if any 4. Tools and supplies returned to supplier: Dr. 331 Trade payable Cr. 153 Tools and supplies the value of Tools and supplies returned Cr. 133 VAT deductible if any VAT of Tools and supplies returned

5. Record of payment discount if any : Dr. 331 Trade payable Cr. 515 Financial income payment discount

6. Tools and supplies issued for the course of operation: 6.1 If the value of tools and supplies issued is not very high, the tools and supplies should be expensed immediately: Dr. 623 Dr. 627 Dr. 641 Dr. 642 Machine expense Factory overhead expense 6273 Selling expense 6412, 6413 General and administration expense 6423 Cr. 153 Tools and supplies 1531, 1532
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6.2 If the tools and supplies issued have a high value and will be used in several periods or reusable packaging issued that will be allocated to operating and business expense, the accountant records as follows: Dr. 142 Prepaid expenses Tools and supplies have high value and useful life within one year Dr. 242 Long term prepaid expenses Tools and supplies have high value and useful life over one year Cr. 153 Tools and supplies 1531, 1532 When tools and supplies are allocated for several periods: Dr. 623, 627, 641, 642 Cr. 142 Prepaid expenses Cr. 242 Long term prepaid expenses 7. Tools and supplies for rent: When issuing tools and supplies for rent: Dr. 142 Dr. 242 Prepaid expenses Long term prepaid expenses Cr. 153 Tools and supplies 1533

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Allocating the value of tools and supplies to the expenses: Dr. 627 Factory overheard expenses Cr. 142 Prepaid expenses Cr. 242 Long term prepaid expenses

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Entity pays VAT in subtraction method, the income from the rental of tools and supplies is recorded as follows: Dr. 111, 112, 131 Cr. 511 Sales 5113 Cr. 3331 VAT payable 33311

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Received tools and supplies back from the lessee: Dr. 153 Tools and supplies 1533 Cr. 142 Prepaid expenses the amount not expensed Cr. 242 Long term prepaid expenses the amount not expensed

8. After the physical inventory count, the surplus, shortage or damage of raw materials is detected, the accounting records should be adjusted based on the reasons or decisions of management or an authorized body: 8.1 If the surplus shortage is due to error or not yet recorded, an adjustment must be made. 8.2 If the shortage is detected and the reasons and the person in charge has not yet been identified:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 138 Other payable 1381 Shortage of assets awaiting resolution Cr. 153 Tools and supplies

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If the reason is identified and the person in charge must compensate for the loss: Dr. 111 Cash on hand Dr. 334 Payable for employees Dr. 138 Other receivable 1388 the compensation must be paid by the person in charge Dr. 632 Cost of goods sold the shortage and damages that are charged to cost of goods sold Cr. 138 Other receivable 1381

8.3 If the reason of the surplus has not yet been identified: Dr. 153 Tools and supplies Cr. 338 Other payable 3381

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the When the reason has been identified, based on the resolution issued by the authorized person, the accountant records: Dr. 338 Other payable 3381 Cr. Relevant accounts

II. Where the company uses the periodic inventory method 1. At the beginning of the accounting period, the opening balance of tools and supplies is reallocated to purchases account: Dr. 611 Purchases Cr. 153 Tools and supplies

2. At the end of the accounting period, the closing balance of tools and supplies is allocated to tools and supplies account: Dr. 153 Tools and supplies Cr. 611 Purchases

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 154 WORK IN PROGRESS This account summaries production cost in order to compute the cost of products and services in industry, construction, poultry, planting and processing products of agriculture, forestry and fishery for those entities using the perpetual inventory method. If the entity uses the periodic inventory method, account 154 will only record the value of work in progress at the end of the period. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS: production 1. Account 154 Work in Progress reflects production expenses incurred during period, costs period, a of products and services completed in the period, the opening balance and closing balance of work in progress of the main and sub-products as well as ones sent out for processing in the manufacturing entity i.e. industry, agriculture, forestry, construction, fishery, etc or in hospitality, acc service entity i.e. transportation, tourism, hospitality, etc . This account also represents expenses relating to manufacturing, processing and services provided in trading companies if the entity organizes these kinds of activities. recorded 2. Production expenses in account 154 must be recorded in detail. The records must be kept track the following: expenses by the cost centre where the expenses were incurred i.e. plant, expenses manufacture team, construction site, etc ; and expenses by category, product, part, type of services or service progress. 3. The following production expenses are recorded into account 154: Direct raw materials expenses Direct labour expenses Machine expenses construction Factory overhead expenses

4. Where raw materials costs and labour costs are hi higher than the normal level and fixed factory overhead expenses have not been allocated, they should not be computed into inventory. Those expenses shall be recognized in cost of goods sold in the period. 5. At the end of the period, the fixed factory overhead expenses shall be allocated into the processing cost of each product unit only according to the normal capacity credit 627, debit 154 . When the quantity of actually-manufactured products is lower than the normal capacity, the accountant must compute and determine the factory overhead costs which shall be allocated into the processing cost of each product unit only according to the normal capacity. The unallocated amount of factory overhead costs not recorded in cost of finished goods shall be recognized as cost of goods sold in the period credit 627, debit 632 . The variable indirect factory overhead costs shall be allocated one time into the processing cost of each product unit according to the actual costs incurred. 6. For construction contractor, account 154 Work in progress is used to summarise production expenses and compute construction costs in the following categories: raw materials costs, direct
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC labour costs, machine costs, overhead costs. For production of other finished goods, account 154 is used to summarise the production cost of workshop, or production department, manufacturing team. 7. For industrial entity rendered outside services for further processing, or outsourced apart of production, those expenses are also recorded in account 154. 8. The following expenses are not recorded into account 154: Selling expense; General and administration expenses; Financial expenses; Other expenses; Enterprise income tax; Subsidized , project expenses; Construction in progress; Expenses funded by other sources.

STRUCTURE AND CONTENTS OF ACCOUNT 154 – WORK IN PROGRESS Debit: Raw materials costs, direct labour costs, machine costs and factory overhead costs incurred relating to production of finished goods and services in the period; Raw materials costs, direct labour costs, machine costs and factory overhead cost incurred relating to construction or of internal all-inclusive price; Allocation of the closing balance of work in progress if the entit applies the periodic inventory entity method .

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Credit: Actual cost of finished goods put into warehouse or transferred for sale; Cost of completed construction handed over partially, or entirely in the period, or transferred to the contractor higher level or inter-company ; or cost of completed construction waiting for sale; Actual cost of completed services provided to customers; Value of materials recovered, non-repairable products; Value of finished goods and materials returned from outside processing; Where raw materials costs, labour costs are higher than the normal level and fixed factory overhead costs have not been allocated, those cost shall not be computed into inventory, but into
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC cost of goods sold in the period. In the case, entity producing upon orders, or entity which has long business cycle and the accountant allocates fixed factory overhead costs into account 154 at the end of each accounting period until goods finished, those fixed overhead costs shall not computed in inventory but in cost of goods sold credit 154, debit 632 . Reallocation of the opening balance of work in progress if the entity applies the periodic inventory method .

Debit balance: Work in progress at the end of the period. APPLYING THIS ACCOUNT TO VARIOUS BUSINESSES INDUSTRY The account 154 Work in progress applying to industry summarizes the production costs and calculate the cost of products by cost centre i.e. plant and production unit . This account also records i.e. costs from sending materials out for processing, outsourced services to other companies, or costs for manufacturing. ATTENTION FOR RECORDING TO ACCOUNT 154 IN INDUSTRY 1. This account is used to record the following costs: Direct material costs for production or services; Direct labour costs for production or services; Direct factory overhead costs for production or services;

2. This account will keep track costs by cost centre plant and production unit , type of product and product parts. MAJOR TRANSACTIONS IN INDUSTRY I. Where the company uses the perpetual inventory method 1. At the end of the period, direct materials expenses are allocated by cost centre: Dr. 154 Work in progress Dr. 632 Cost of goods sold the material costs that are higher than the normal level Cr. 621 Raw materials costs 2. At the end of the period, direct labour expenses are allocated by cost centre: Dr. 154 Work in progress Dr. 632 Cost of goods sold the direct labour costs that are higher than the normal level Cr. 622 Direct labour costs 3. Where the quantity of actually-manufactured products is higher than or equal to that of the normal capacity, the accountant must compute, allocate those costs to factory overhead expenses variable and fixed costs by cost centre:
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Dr. 154 Work in progress Cr. 627 Factory overhead costs 4. When the quantity of actually-manufactured products is lower than that of the normal capacity, the accountant must compute and determine fixed factory overhead costs. The fixed factory overhead costs shall be allocated into the processing cost of each product unit only according to the normal capacity. The unallocated fixed overhead costs the difference between the actual fixed factory overhead costs incurred higher than the fixed factory overhead costs computed in the cost of products shall be recorded into cost of goods sold in the period. The accounting entry is recorded as follows: Dr. 154 Work in progress Dr. 632 Cost of goods sold the fixed factory overhead costs not allocated in cost of products Cr. 627 Factory overhead costs 5. Value of materials returned to the store from outside processing: Dr. 152 Raw materials Cr. 154 Work in progress 6. Since value of products is non-repairable, the compensation must be charged to the person incharge: Dr. 138 Other receivable 1388 Dr. 334 Payable for employees Cr. 154 Work in progress 7. In the case, the entity has a long production and business cycle and during the accounting period, costs materials costs, direct labor costs and overhead costs have been recorded in account 154 but it is exceeded su determined that such costs exceeded normal rates abnormal , such abnormal costs should be recorded in the cost of goods sold not allocated into the inventories : Dr. 632 Cost of goods sold costs Cr. 154 Work in progress transferred costs from accounts 621, 622, 627 to account 154 to 8. Cost of finished goods put into the store in the period: Dr. 155 Finished goods Cr. 154 Work in progress 9. Finished goods directly transferred to customers, not through the warehouse i.e. water, electricity, etc. : Dr. 632 Cost of goods sold Cr. 154 Work in progress II. Where the company uses the periodic inventory method 1. At the end of the period, based on the physical inventory count, the closing balance of work in progress is allocated as follows: Dr. 154 Work in progress
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 631 Cost of products manufactured 2. At the beginning of the period, the opening balance of work in progress is reallocated as follows: Dr. 631 Cost of products manufactured Cr. 154 Work in progress AGRICULTURE Account 154 Work in progress is used in agriculture to summarise production cost and compute the cost of products in activities such as raising, planting and processing the agriculture products. ATTENTION FOR RECORDING TO ACCOUNT 154 IN AGRICULTURE activities 1. This account must be kept track in detail by activities i.e. raising, planting and processing, etc. by cost centre i.e. manufacture team, factory, etc. and by the type of plants, products and services. 2. The actual cost of agriculture products will be determined at the end of the crop, or the year. incurred Products are harvested in one year, the actual cost incurred shall be recognised in that year. That means the cost incurred in the current year while the products are not going to be harvested until the next year, the actual cost shall be computed in next year. cost 3. With respect to planting, cost must be recorded according to three types of plants: according Short-term plants paddy, potatoes, cassava, etc. ; several Plants which can be harvested several times pineapples, bananas, etc. ; Perennial plants tea, coffee, rubber, pepper, fruit tree, etc. . Plants that are harvested two or three times in one year, or planted this year then harvested in the same coming year, or planted and harvested in the same year in a different area must have costs vidual accountan assigned according to their individual situation. The accountant must take into account seasons, ears, and areas when determining the cost of plants. 4. This account does not record such expenses as land renovation expenses, expenses incurred in ng expen planting perennial plants, selling expenses, management expenses, financial expenses and other expenses. 5. In principle, production expenses with regards to agriculture are debited into account 154 Work in progress by cost centre. Expenses relating to several cost centres, seasons and periods must be recorded into a separate account and then allocated into the cost of the relevant products such as irrigation expenses, land preparation, planting expenses for newly long time plants which can be harvested one time or several times the expenses are not classified as capital investment . 6. If there are more than two types of short-term plants in the same area, expenses must be allocated to each type of plant i.e. seeding, sowing, harvesting, etc. and general expenses relating to many plants, i.e. land preparation, watering, etc. must be recorded into a separate account and allocated to each type of plant according to occupied area, or any suitable criteria . 7. For perennial plants, expenses incurred from land preparation to the first harvest are considered as capital investments and are recorded into account 241 Construction in progress .
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8. Expenses for perennial plants include expenses for caring for and harvesting the plants. 9. Attention should be paid when recording the poultry raising expenses into account 154: Poultry raising expenses should be recorded in details for each raising activity buffalo, ox, pig, etc. and for each type of animal and livestock. New born livestock produced from breeds or from animals raised for meat is recorded into a subledger according to actual cost; Only the remaining value of breeds that were transferred to raise for meat shall be recorded into account 154; The unit cost in poultry raising is calculated per kilogram of fresh milk, number of cow, cost per eeding one kilogram of pork, cost of breeding an animal a day, etc.

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10. The raw materials costs, direct labour costs higher than that of the normal level, and the higher unallocated fixed factory overhead costs should not be recorded in products cost but into cost of e goods sold in the current period. MAJOR TRANSACTIONS IN AGRICULTURE I. Where the company uses the perpetual inventory method accountant material 1. At the end of the period, the accountant computes and allocates raw material costs by cost centre: Dr. 154 Work in progress Dr. 632 Cost of goods sold the value of raw material costs that is higher than the normal level Cr. 621 Raw material costs direct 2. At the end of the period, the direct labour costs is computed and allocated to each cost centre: Dr. 154 Work in progress Dr. 632 Cost of goods sold the direct labour costs that is higher than the normal level Cr. 622 Direct labour costs actory co 3. At the end of the period, the factory overhead costs should be computed, allocated to each cost centre: Dr. 154 Work in progress Dr. 632 Cost of goods sold part of fixed factory overhead costs is unallocated in products cost Cr. 627 Factory overhead expenses 4. To record the value of any by-products collected i.e. animal manure, straw, stubble, etc. : Dr. 152 Raw material costs Cr. 154 Work in progress 5. To record the value of wastage, materials received back from an outside processor: Dr. 152 Raw materials Cr. 154 Work in progress
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6. To record the value of new born animals and animals which were being bred for meat but are now working animals or reproducing animals: Dr. 211 Tangible assets 2116 Cr. 154 Work in progress 7. To record the actual cost of finished goods put into warehouse or directly shipped to customers: Dr. 155 Finished goods Dr. 632 Cost of goods sold Cr. 154 Work in progress II. Where the company uses the periodic inventory method This is similar to the entries recorded under industry. TRADING SERVICES Account 154 Work in progress is applied to trading and servicing enterprises, such as transportation, post office, tourism, servicing, etc. This account is used to summarize cost raw material, direct costs labour and factory overhead expenses and compute service cost rendered. ATTENTION FOR RECORDING TO ACCOUNT 154 IN TRADING/SERVICES 1. In transportation companies, this account is used to summarize production cost and calculate the cost of transportation by land i.e. car, train and other simple transportation means , railway, sea, air and pipe, etc. Account 154 in transportation companies must be detailed by activity i.e. transportation of passengers, transportation of goods , department or service units. In transportation companies, tires are worn out quickly than their depreciation, therefore, they quickly depreciat must be replaced many times. The value of replaced tires should be not charged directly to the replaced cost of transportation when replaced but allocated to expenses monthly. Therefore, on the allocated monthly basis, the transportation companies ar allowed to make accruals to the cost of are transportation accrued expenses under current regulations. 2. The raw materials, direct labour costs higher than the normal level, and the unallocated fixed factory overhead costs should not be recorded in cost products but in cost of goods sold in the current period. 3. In tourism companies, this account must be detailed by each type of activities, such as tour-guide, hospitality and tourist transportation. 4. In hotel companies, this account must be track in detail for each type of activity, such as food, rooms, entertainment and others laundry, hair dressing, telegram, sport, etc. . The accounting treatment for major transportation and service entities is similar to the industry entity. However, the following entry is recorded when the service has been provided: Dr. 632 Cost of goods sold Cr. 154 Work in progress
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CONSTRUCTIONS Construction companies only apply the perpetual inventory method, not the periodic inventory method, therefore, account 154 is used to summarize production costs and track the cost of construction work and other services. The raw materials, direct labour costs which is higher than the normal level, and the unallocated fixed factory overhead costs should not be recorded in the cost of construction work but in cost of goods sold in the current period. This account in construction has four sub-accounts: : Account 1541 – Construction: to summarize costs, compute the cost of construction work and construction in progress at the end of the period; : Account 1542 – Other products: to summarize costs, compute the cost of other products and work in progress at the end of the period finished goods, building components, etc. ; building : Account 1543 – Services: to summarize costs, compute the cost of services and work in progress of services at the end of the period; Account 1544 - Maintenance: to summarize maintenance, installation expenses incurred in the period Maintenance: installation and work in progress at the end of the period. MAJOR TRANSACTIONS IN CONSTRUCTION I. Accounting treatment for production costs of construction work also applied for entities production having internal lump-sum construction contract of which a separate accounting book is used Summary of production costs of construction work must be kept track by construction project, each category in construction project and cost item regulated in setting construction budget including: Raw materials costs; Labour cost; Machine costs; Overhead.

The overhead are debited in account 154 Construction including overhead incurred in subcontracting department, or construction site. The administration expenses in construction companies are debited in account 642 General and administration expenses . Those expenses shall be transferred to debit side of account 911 Income summary assigned for the cost of completed construction work that was sold in the period. 1. The accounting treatment for construction costs the debit side of account 1541 Construction 1.1. Record raw material costs: Raw material costs include actual value of raw materials, materials, components or rotational materials that make construction products excluding secondary materials for machine, machine
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC for executing the work or material calculated into overhead . Accounting principles of direct raw materials: if raw materials are used for any construction work that must be directly computed for this construction work based on the actual used quantity and the actual cost of materials paid out average cost; first in, first out, etc . At the end of the accounting period, or when construction completed, the physical count for remaining materials if any at the production site must be taken. Based on that, the accountant shall record a decrease in raw material costs used in construction. In reality, if it is unlikely to allocate raw material costs to each construction project or construction category, the enterprise can allocate according to suitable criteria in relation with the material, fuel use , etc. Based on the list of allocated materials for each construction project and construction work: account: Dr. 154 Work in progress sub-account: raw materials 1541 Dr. 632 Cost of goods sold amount of raw material costs that is higher than the normal level material Cr. 621 Raw materials costs 1.2. Recording direct labour costs is similar to that under industry. 1.3. Record machine costs: machine Machine costs include machine costs for construction by machine. Machines constitute the consist machines directly used for construction. Those consist of machines running by steam, diesel, gas, machines electricity, etc. including machines used for installation . installation Machine costs include regular expenses and temporary costs. Regular expenses include labour costs of machine workers, raw materials, tools and supplies, depreciation, services rental small repair, electricity, water, insurance fee, etc. , other expenses in petty cash. Temporary costs include machine repair with high value overhaul repair not met criteria to increase historical cost of machine, temporary costs for machine canvas, tent, platform, rails etc. . If the temporary costs occurred ahead of time debited into account 142 or account 242 , they are then allocated in the debit side of account 623 Machine costs . If the temporary costs occurred later, they should be accrued into construction cost in the current period due to machine actually used in the period . In this case, the enterprises should accrue the expenses by credit account 335 Accruals and debit account 623 Machine costs . Summary and computation of machine costs must be separately accounted for each machine refer to accounting treatment in account 623 Machine costs . Based on the list of machine costs actual costs allocated to each project and project items: Dr. 154 Work in progress Machine costs Dr. 632 Cost of goods sold Amount of machine costs higher than the normal level Cr. 623 Machine costs 1.4. Record factory overhead costs
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Factory overhead costs constitute production costs of the team and of construction site including salary of factory manager, team leader, group leader, social insurance, health insurance and trade union fees which is calculated based on a regulated ratio of employees salary, machinery controllers and manager of workshop, group, team, depreciation allocated for team s activities and other costs. When the costs incurred in the period: Dr. 627 Factory overhead costs Dr. 133 VAT deductible if any Cr. 334, 338, 152, 153, 142, 214, 335, 111, 112,... Record the provisions for construction project warranty: Dr. 627 Factor overhead costs Cr. 352 Provisions maintenance When expenses for project repair and maintenance incurred such as raw material, direct labour, machine costs, and factor overhead, the accountant should record those expenses in the relevant accounts: Dr. 621 Raw material costs Dr. 622 Direct labour costs Dr. 623 Machine costs Dr. 627 Factor overhead costs Dr. 133 VAT deductible if any Cr. 112, 152, 153, 214, 331, 334, 338,... At the end of the period, the enterprise should transfer actual costs of raw material, direct labour, machine costs, factory overhead relating to repair and maintenance incurred in the period to summarise expenses of repair and maintenance activities: repair Dr. 154 Work in progress Cr. 621 Raw material costs Cr. 622 Direct labour costs Cr. 623 Machine costs Cr. 627 Factor overhead costs Record completed repair and maintenance of construction handed over to the customer: Dr. 352 Provisions Cr. 154 Work in progress When the warranty period is over, construction does not need to repair or warranty provisions made was higher than the actual costs, the difference should be reversed: Dr. 352 Provisions Cr. 711 Other income At the end of the period, based on the list of factory overhead cost to allocate to related construction work and construction items in ratio of labour cost : Dr. 154 Work in progress Dr. 632 Cost of goods sold unallocated factory overhead costs should not be charged into cost of construction work
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 627 Factor overhead costs Construction

2. Allocation of construction costs credit side of account 1541

2.1. Irrecoverable costs relating to the construction contract i.e. insufficient legal conditions for continuing the contract performance, or contracts when the customers cannot perform their obligations must be recognized as costs in the current period: Dr. 632 Cost of goods sold Cr. 154 Work in progress 2.2. Costs directly relating to each contract can be net off against the production cost if other incomes generated not included in the contractual revenue. For example, proceeds from the sale of unused raw materials and wastage and of construction machines and equipment upon the liquidation of contract: store a. Returned unused raw materials to the store when construction contract completed: Dr. 152 Raw materials historical cost Cr. 154 Work in progress b. Wastage is recollected and put back into warehouse: Dr. 152 Raw materials net realizable value Cr. 154 Work in progress c. If unused raw materials and wastage are recollected and directly sold, not through the recollected enterprise s warehouse, the accountant should recognize income from sales of unused raw materials and wastage by decreased costs: Dr. 111, 112, 131... total amount Cr. 3331 VAT payable 33311 Cr. 154 Work in progress price excluding VAT d. Disposals of machines, equipments used for construction contract and the fixed assets fully depreciated upon liquidation of the contract : Record income from disposal of machines, equipments: Dr. 111, 112, 131,... Cr. 3331 VAT payable 33311 Cr. 154 Work in progress selling price-exclusive VAT Record cost resulted from disposal of machines, equipments if any : Dr. 154 Work in progress Dr. 133 VAT deductible 33311 Cr. 111, 112,... Write off the cost of fixed assets fully depreciated or disposed: Dr. 214 Accumulated depreciation and amortization
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 211 Tangible assets

2.3 At the end of the period, the actual cost of the completed construction considered as sold handed over some items or all to the customer Party A, or to internally official contractor is treated as follows: a. In the case, the construction handed over to the Party A including the volume of completed construction work according to internal fixed contract for contractor : Dr. 632 Cost of goods sold Cr. 154 Work in progress 1541 b. In the case, completed construction waiting for sale building for sale or not been handed over, based on the cost of completed construction work to record: Dr. 155 Finished goods Cr. 154 Work in progress c. If the enterprise handed-over completed construction to the official contractor higher contract authorities, inter-companies having lump-sum contract of which a separate accounting book is prepared : Dr. 336 Inter-company payable 3362 Cr. 154 Work in progress 1541 II. Accounting treatment for production cost and computation cost of industrial products and services in construction companies is similar to that under industry.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 155 FINISHED GOODS This account records the current value and movement of the enterprises finished goods. Finished goods are those which have gone through all the stages of the production process and are tested for technical qualification to store. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Accounting for stock-in, stock-out and outstanding balance of finished goods in account 155 should be recorded at cost as regulated in Vietnamese Accounting Standard No. 02 Inventories . cial pr 2. Finished goods produced by official production and secondary production department must be ma valued at the production cost historical cost including raw materials, direct labour, overhead expenses and other costs directly related to the production of finished goods. Variable factory overhead costs shall be entirely allocated into the processing cost of each product all the unit according to the costs actually incurred. sts Fixed factory overhead costs shall be allocated into the processing cost of each product unit on the capacity capacity basis of the normal production capacity of machinery. Normal capacity is the average quantity of products turned out under normal production conditions. Where the quantity of actually-manufactured products is higher than the normal capacity, the products fixed factory overhead costs shall be allocated to each product unit according to actually incurred costs. Where the quantity of actually-manufactured products is lower than the no normal capacity, the fixed factory overhead costs shall be allocated into the processing cost of each product unit only according to the normal capacity. The unallocated amount of factory overhead costs shall be unallocated recognized as production and business expense to determine operation result in the period recognized in cost of goods sold . 3. Costs not permitted to be incorporated into the original price of inventories are: a. Costs of raw materials, materials, labour and other production and business costs incurred at a level higher than normal; b. Costs of inventories preservation minus the inventories preservation cost needed for subsequent production processes and the preservation cost prescribed in paragraph 06 of Vietnamese Accounting Standard No. 02 Inventories ; c. Selling expenses; d. Enterprise management costs. 4. Finished goods sent out for further processing must be valued at the actual processing cost including direct raw materials, processing cost and other costs directly related to the processing of finished goods.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 5. The value of finished goods shall be calculated according to one of four methods that are regulated in Vietnamese Accounting Standard No. 02 Inventories . 6. Where the enterprises apply the perpetual inventory method, the inventory accountant keeps track the records of daily finished goods in and out at a pre-determined cost estimated or predetermined cost . At the end of the month, the accountant shall compute the actual cost of finished goods and determine the difference between the actual cost and the pre-determined cost and also the difference resulted from the opening balance . This is a base to determine the actual cost of finished goods in and out during the period refer to the formula instructed in account 152 Raw materials . 7. Accounting for finished goods must be detailed under each store, each type and kind of products. STRUCTURE AND CONTENTS OF ACCOUNT 155 – FINISHED GOODS Debit: Value of finished goods; Surplus of finished goods detected in the physical inventory count; goods Allocation of the closing balance of finished goods at the end of the period if the company uses the periodic inventory method .

Credit: Value of finished goods out; Shortage of finished good detected in the physical inventory count; Reallocation the beginning balance of finished goods at the end of the period if the company uses the periodic inventory method .

Debit balance: Value of finished goods in stock at the end of the period. MAJOR TRANSACTIONS I. Where the company uses the perpetual inventory method 1. Finished goods produced by the company itself or sent out for further processing put into warehouse: Dr. 155 Finished goods Cr. 154 Work in progress 2. Finished goods shipped to the customers, the accountant records the cost of goods sold as follows: Dr. 632 Cost of goods sold Cr. 155 Finished goods 3. Finished goods sent on consignment, sales agents or subsidiaries if using goods dispatch note
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC cum internal transport note : Dr. 157 Goods on consignment Cr. 155 Finished goods 4. Where the finished goods are returned by the buyers: in the case, the finished goods returned are subject to VAT in subtraction method, sales returns should be recorded at VAT-exclusive selling price: Dr. 531 Sales returns VAT-exclusive selling price Dr. 3331 VAT payable 33311 Cr. 111, 112, 131 Total amount of goods returned rds At the same time, the accountant records the cost of goods returned: Dr. 155 Finished goods Cr. 632 Cost of goods sold 5. Where the finished goods used internally for production and business operation: In the case, finished goods used for production of goods and services subject to VAT in used subtraction method: When finished goods are used: Dr. 632 Cost of goods sold Cr. 155 Finished goods Record inter-company sales and VAT output: Dr. 621 Raw materials costs Dr. 627 Factory overhead costs Dr. 641 Selling expenses Dr. 642 General and administration expenses Dr. 241 Construction in progress Cr. 512 Inter-company sales production costs stment 6. Finished goods contributed as capital investment in jointly controlled entities: a. When enterprise contributed finished goods as capital investment in joint ventures: Dr. 222 Shares in joint ventures revalued price Dr. 811 Other expenses difference between lower revalued prices and the book value of finished goods Cr. 155 Finished goods Cr. 711 Other income difference between greater revalued prices and the book value of finished goods in correspondence with benefit of other parties in the joint venture Cr. 3387 Deferred income difference between greater revalued prices and the book value of finished goods in correspondence with the enterprise s benefit in the joint venture b. When jointly controlled entity sold this finished goods for third party, the venture parties should reallocate the deferred income to other income:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 3387 Deferred income Cr. 711 Other income 7. Finished goods contributed as investment in associates: Dr. 223 Investment in associates revalued price Dr. 811 Other expenses difference between lower revalued amount and the book value of finished goods Cr. 155 Finished goods Cr. 711 Other income difference between greater revalued price and the book value of finished goods 8. When the enterprise detected the surplus or shortage of finished goods during the physical inventory count, the report must be prepared and the reason and also the person in-charge must be based mi identified. The accounting treatment is made based on the counting minutes and the resolving report issued by authorized person. If surplus or shortage is made by mistake or has not yet recorded, the accountant shall make adjustment in the accounting books; If enterprise has not yet determined the reason and waiting for resolution: If surplus: Dr. 155 Finished goods Cr. 338 Other payable 3381 When the resolving report issued by authorized person: Dr. 338 Other payable Cr. Relevant accounts If shortage: Dr. 138 Other receivable 1381 Shortage of assets awaiting resolution Shortage Cr. 155 Finished goods When resolution issued by authorized person, based on the decision to record: Dr. 111, 112 if the person in-charge paid compensation in cash Dr. 334 Payable employees if the compensation deducted in employees salary Dr. 138 Other receivable 1388 the compensation to be paid by the person in-charge Dr. 632 Cost of goods sold remaining amount after deducted into compensation Cr. 138 Other receivable 1381

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC II. Where the company uses the periodic inventory method 1. At the beginning of the period, based on the inventory physical count the accountant reallocates the opening balance of finished goods to account 632 Cost of goods sold : Dr. 632 Cost of goods sold Cr. 155 - Finished goods 2. At the end of the period, based on the inventory physical count, the accountant allocates the closing balance of finished goods: Dr. 155 Finished goods Cr. 632 Cost of goods sold

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 156 MERCHANDISE GOODS This account records the current value and movement of merchandise goods including items in stock, in the store as well as property. Merchandise goods are materials, products purchased by the entity for resale either wholesale or retail . The cost of inventory includes the purchase price as well as all expenses relating to the purchase. In the case where the materials or products must be further processed, refurbished or categorized to bring higher value or saleability before they can be sold, the value of goods purchased consist of the purchase price plus + processing cost. For imported goods, such costs as import tax, special consumption tax if any , VAT if not deductible , insurance, etc. will be added to the cost of imported goods. The account 156 Merchandise goods is still used in those cases where the merchandise goods is purchased for both resale and production and the company is unable to separate the two. into The following should not be recorded into account 156: 1. Merchandise inventory held on consignment or kept for another party in this case the entity unt should use account 002 Goods held under trusts or for processing , or account 003 Goods received on consignment for sale Off balance sheet accounts . production 2. Merchandise purchased for the entity s production and business in this case, the purchase should be posted to account 152 Raw materials , or account 153 Tools and supplies . THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS merchandise 1. Accounting for stock-in or stock-out of merchandise goods in account 156 is recorded at cost as regulated in Vietnamese Accounting Standard No. 02 Inventories . Accounting The cost of merchandise goods consists of the purchase price, import tax, special consumption tax if any , VAT if not deductible and costs incurred in process of purchasing, handling required to deliver the goods from the supplier to the enterprise s stock. Goods purchased for the entity s production of goods and services subject to VAT in subtraction method, the cost of goods is recorded at the purchase price exclusive VAT. Goods are purchased for the entity s production of goods and services which are subject to VAT in direct method or not subject to VAT, the cost of goods is recorded at total amount including VAT .

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2. The cost of goods is computed according to each type of item purchased and must be separately recorded at the purchase price and additional expenses incurred to purchase that item. 3. The value of merchandise goods shall be calculated according to one of the four inventory methods as regulated in Vietnamese Accounting Standard No. 02 Inventories . 4. Purchasing cost incurred during period should be calculated for goods sold in period and goods still in stock. The method for expenses allocation should be selected in accordance with the company s features and should be consistently applied during the accounting period.
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 5. At each store, the records should be kept track of the amount and type of merchandise inventory on hand. STRUCTURE AND CONTENTS OF ACCOUNT 156 – MERCHANDISE GOODS Debit: Buying price of merchandise according to invoice including non-refundable taxes ; Purchasing expenses; Value of goods sent for further processing including the buying price and processing cost ; Cost of goods returned by buyers; Surplus of goods detected in the inventory physical count; Allocation of the year end balance of stock where the company uses the periodic inventory method ; Value of property purchased or transferred from investment property.

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Credit: Value of merchandise sold, shipped to agents and divisions on consignment, send out for further processing or to be used in production process; Purchasing expenses allocated to merchandise during the period; Purchasing discounts; turned Value of merchandise returned for suppliers; Shortage of merchandise detected in the inventory physical count; th Opening balance of merchandise in stock if the company uses the periodic inventory count ; Value of property sold or transferred to investment property, owner-occupied property or fixed assets.

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Debit balance Buying price of merchandise in stock; Purchasing expenses for merchandise in stock.

Account 156 – Merchandise goods has three sub-accounts: Account 1561 – Original costs: To record the current value and movement of goods purchased and goods on hand at the buying price . Account 1562 – Purchasing expenses: To record the purchasing expenses incurred in order to purchase merchandise goods and allocation of those expenses to cost for goods sold and
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC merchandise on hand including goods in stock and on consignment . This account will record expenses directly involved in the buying process such as merchandise insurance, store rental, transportation, handling required to deliver goods from the supplier to the enterprise s stock and losses within a reasonable limit incurred from the purchase of merchandise. Account 157 – Property: To record the current value and movement of property of the entity. Property includes land used right, a building, or a building and land used right, infrastructure purchased by the entity for resale in the normal business cycle, or investment property changed as inventory for sale purpose. STRUCTURE AND CONTENTS OF ACCOUNT 1561 – ORIGINAL COSTS Debit: Buying price of merchandise goods according to invoice; Import duty or special consumption tax of imported goods or import VAT, VAT input if not deductible for merchandise purchased; Value of goods sent for further processing and completed goods put into warehouse including completed buying price and processing cost; Value of goods received from contribution capital; from Value of goods returned then put into warehouse; Surplus of merchandise goods detected the inventory physical count; Allocation of merchandise goods at the end of period where the company uses the periodic inventory method .

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Credit: Value of merchandise goods used during period sold, exchanged, presented, shipped to an agent on consignment, divisions, used internally, contributed in a joint venture, in associates ; Purchase discounts; Allowance from reduction in price of goods purchased; Value of merchandise goods returned to suppliers; Value of good damages and losses; Opening balance of merchandise goods if the enterprise uses the periodic inventory method .

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Debit balance: Value of merchandise goods in stock at the end of the period.

STRUCTURE AND CONTENTS OF ACCOUNT 1562 – PURCHASING EXPENSES Debit: Purchasing expenses incurred to purchase merchandise during the period.

Credit: Purchasing expenses allocated to merchandise sold during the period.

Debit balance: nses The balance of purchasing expenses at the end of the period.

STRUCTURE AND CONTENTS OF ACCOUNT 1567 – PROPERTY Debit: Value of property purchased for resale; Net book value of property transferred to inventory; Cost that is added to the original price of property incurred from repairing and upgrading the property waiting for sale.

Credit: Value of the property sold during the period; ansferred Value of the property transferred to investment property or fixed assets.

Debit balance: The balance of property at the end of the period. MAJOR TRANSACTIONS I. Where the enterprise uses the perpetual inventory method: 1. Based on invoices, received notes and related documents to record merchandise goods purchased and put into the warehouse: 1.1 Goods purchased for production of goods and services subject to subtraction method VAT: Where the company purchases domestic merchandise goods: Dr. 156 Merchandise goods 1561 buying price exclusive VAT Dr. 133 VAT deductible 1331 VAT input Cr. 111, 112, 141, 331 total amount
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Where the company imports merchandise goods: Dr. 156 Merchandise goods 1561 buying price plus + import duty Cr. 111, 112, 331 Cr. 3333 Import, export tax payable taxes by details At the same time, record VAT payable of import goods to the State Budget: Dr. 133 VAT deductible 1331 Cr. 3331 VAT payable 33312 Import VAT

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In the case, the entity imports merchandise that is subject to special consumption tax: Dr. 156 Merchandise goods 1561 buying price plus + import tax and special consumption tax Cr. 111, 112, 331 Cr. 3333 Import, export taxes payable Cr. 3332 Special consumption tax

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Where the entity imports merchandise from an agent shall be followed the guidance of account agent 331 Trade payable .

1.2 Goods purchased for production of goods and services subject to subtraction method VAT or not subject to VAT: Where the company purchases domestic merchandise: Dr. 156 Merchandise goods 1561 total amount Cr. 111, 112, 141, 331 total amount Where the company imports merchandise: Dr. 156 Merchandise goods 1561 buying price plus + import tax + VAT + special consumption tax if any . Cr. 111, 112, 331 Cr. 3333 Import, export duties taxes by details Cr. 3331 VAT payable 33312 Cr. 3332 Special consumption tax if any 2. In the case where the invoice has been received but the merchandise goods has not yet arrived at the end of the period, based on the invoice to record: Dr. 151 Goods in transit Dr. 133 VAT deductible if any Cr. 111, 112, 331 In the following period once the goods has arrived: Dr. 156 Merchandise goods 1561 Cr. 151 Goods in transit 3. Where the company is entitled to a purchase discount:
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Dr. 111, 112, 331 Cr. 156 Merchandise goods 1561 Cr. 133 VAT deductible 1331 if any 4. Cost of merchandise returned to supplier because of interior quality or for not being what was ordered as stipulated in the contract that may lead to reduction in price: Dr. 111, 112 Dr. 331 Trade payable Cr. 156 Merchandise goods 1561 Cr. 133 VAT deductible 1331 if any 5. Purchasing expenses for goods used in production of goods and services subject to subtraction method VAT: Dr. 156 Merchandise goods 1562 Dr. 133 VAT deductible if any Cr. 111, 112, 141, 331 6. Property purchased for sale: Dr. 156 Merchandise goods 1567 Property buying price exclusive VAT Property Dr. 133 VAT deductible 1332 Cr. 111, 112, 331 7. Direct cost related to purchase of property: Dr. 156 Merchandise goods 1567 Property Dr. 133 VAT deductible 1332 Cr. 111, 112, 331 8. In the case where the property is transferred to inventory when owner decided to repair and upgrade the property for sale: ading Upon the decision on repairing, upgrading the property for sales issued: Dr. 156 Merchandise goods 1567 property net book value Dr. 214 Accumulated depreciation and amortization 2147 Accumulated depreciation Cr. 217 Investment property historical cost Record of costs incurred from repairing and upgrading: Dr. 154 Work in progress Dr. 133 VAT deductible Cr. 111, 112, 152, 334, 331 Allocation of all expenses incurred from repairing and upgrading to the value of property when the work is completed: Dr. 156 Merchandise goods 1567 Cr. 154 Work in progress
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 9. Based on VAT invoice and selling invoice and goods dispatch note to record the value of goods that is determined as sold: Dr. 632 Cost of goods sold Cr. 156 Merchandise goods 1561 At the same time, the sale is recognised: Where the company pays VAT in subtraction method and goods sold subject to subtraction method VAT: Dr. 111, 112, 131 Total amount Cr. 511, 512 selling price - exclusive VAT Cr. 3331 VAT payable 33311 on Where the goods subject to subtraction method VAT or not subject to VAT: Dr. 111, 112, 131 Cr. 511, 512 Total amount Total amount

10. Where the company sent goods to subcontractor for further processing: a. Delivered goods to subcontractor for further processing, : Dr. 154 Work in progress Cr. 156 Merchandise goods 1561 b. Record of processing cost: Dr. 154 Work in progress Dr. 133 VAT deductible if any Cr. 111, 112, 331 c. When the processing is completed, relocate to merchandise inventory: Dr. 156 Merchandise goods 1561 Cr. 154 Work in progress 11. Merchandises are delivered to customer or to agent on consignment: Dr. 157 Goods on consignment Cr. 156 Merchandise goods 1561 12. When merchandise delivered to divisions for sale: If the company used good dispatch note cum internal transport note: Dr. 157 Goods on consignment Cr. 156 Merchandise goods 1561 If the company used VAT invoice or selling invoice as evidence of shipment, the accountant determines cost of goods sold:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 632 Cost of goods sold Cr. 156 Merchandise goods 13. In the case goods subject to VAT used internally a. Where goods used internally for production of goods and services subject to subtraction method VAT, the accountant records inter-company sales at cost: Dr. 623, 627, 641, 642 Cost of goods delivered Cr. 512 Inter-company sales Cost of goods delivered At the same time, cost of goods used is recognized: Dr. 632 Cost of goods sold Cr. 156 Merchandise goods 156 lly ser b. Where goods used internally for production of goods and services subject to subtraction method records VAT or not subject to VAT, the accountant records inter-company sales at cost. Non-deductible VAT must be recognized to expenses: Dr. 623, 627, 641, 642 cost of goods used plus + VAT output Cr. 3331 VAT payable 33311 Cr. 512 Inter-company sales cost of goods used At the same time, cost of goods used is recorded as follows: Dr. 632 Cost of goods sold Cr. 156 Merchandise goods 1561 14. Merchandises subject to VAT used for presents or payment to employees: a. Where goods used for presents spending from bonus and welfare fund , or payment to employees spending for production of goods and services subject to subtraction method VAT, the accountant recognizes sales at selling price exclusive VAT: Dr. 431 Bonus and welfare fund if used for present Dr. 334 Payable for employees if used for payment to employees Cr. 512 Inter-company sales Cr. 3331 VAT payable 33311 At the same time, cost of goods used is recorded: Dr. 632 Cost of goods sold Cr. 156 Merchandise goods 1561 b. Where goods used for presents spending from bonus and welfare fund , or payment for employees for production of goods and services subject to subtraction method VATor not subject to VAT, the accountant records inter-company sales at total amount: Dr. 431 Bonus and welfare fund if used for present Dr. 334 Payable for employees if used for payment to employees Cr. 512 Inter-company sale
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 15. Merchandise subject to subtraction method VAT or not subject to VAT when goods used for present or internally, sale is recorded as total amount: Dr. 641, 642, 431 Cr. 512 Inter-company sale At the same time, the accountant records cost of goods used: Dr. 632 Cost of goods sold Cr. 156 Merchandise goods 1561 16. Merchandises transferred to contribute in a jointly controlled entity: a. When goods transferred to contribute: Dr. 222 Share in joint venture revalued price Dr. 811 Other expenses difference between revalued price and the lower book value Cr. 156 Merchandise goods revalued Cr. 711 Other income difference between revalued price and greater book value of goods corresponding to benefit of other parties in the joint venture between Cr. 3387 Deferred income difference between revalued price and greater book value of goods corresponding to its benefit in the joint venture b. When jointly controlled entity sold the goods for third parties, the contributor should transfer deferred income to other income of the period: Dr. 3387 Deferred income Cr. 711 Other income 17. Goods transferred to contribute in associates: Dr. 223 Investment in associates revalued price Dr. 811 Other expenses Difference between revalued price and lower book value Cr. 156 Merchandise goods Cr. 711 Other income Difference between revalued price and greater book value 18. At the end of the period, purchasing expenses are allocated to goods sold during period: Dr. 632 Cost of goods sold Cr. 156 Merchandise goods 1562 19. Surplus of merchandise detected should be investigated and recorded in the minutes. Based on the reason, an appropriate adjustment must be made: a. If the surplus is due to an error or not yet recorded, an adjustment should be made in the accounting records. b. If the surplus is owned by other entity, the surplus shall be debited to account 002 Goods held under trust or for processing Off balance sheet accounts . After returning the surplus of merchandise to the owner, account 002 is credited. c. In the case where the reason is not yet known:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 156 Merchandise goods Cr. 338 Other payable 3381 d. Upon the decision on resolution of the surplus issued by authorized person: Dr. 338 Other payable 3381 Cr. Related accounts 20. Shortage of merchandise detected should be investigated and recorded in the minutes. Based on the decision on resolution issued by the authorized person, an appropriate adjustment must be made: a. Record of the shortage where reason is not yet known and awaiting resolution: tage Dr. 138 Other receivable 1381 Shortage of assets awaiting resolution Cr. 156 Merchandise goods sued b. Upon the decision on resolution issued by the authorized person: Dr. 111, 112 If the person in charge paid the compensation in cash charge Dr. 334 Payable for employees If the compensation deducted to salary of the person in charge Dr. 138 Other receivable the compensation must be paid by the person in charge Dr. 632 Cost of goods sold the damage amount Cr. 138 Other receivable 1381 21. When the property is determined as sold in period, based on VAT invoice, or selling invoice, handover minute of property to record: Dr. 632 Cost of goods sold Cr. 156 Merchandise goods 1567 Property At the same time, sales of property should be recorded: If the company pays VAT in direct method: Dr. 111, 112, 331 Cr. 511 Sales 5117 price-exclusive VAT Cr. 3331 VAT payable 33311 If the company pays VAT in subtraction method: Dr. 111, 112, 331 Cr. 511 Sales 5117 total amount II. Where the enterprise uses the periodic inventory method 1. At the beginning of the period, the opening balance of merchandise must be reallocated into purchases: Dr. 611 Purchases Cr. 156 Merchandise goods

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 2. At the end of the period: The entity must determine the closing balance of both quantity and value of merchandise. a. Based on the closing balance of merchandise as reported in the inventory physical count to record: Dr. 156 Merchandise goods Cr. 611 Purchases b. Based on total value of goods sold: Dr. 632 Cost of goods sold Cr. 611 Purchases

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 157 GOODS ON CONSIGNMENT This account records goods on consignment or goods which have been shipped to customer, a sale agent or divisions, or services which have been rendered but customers have not yet accepted them for payment. This account is used by all types of enterprises in all types of business. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Goods on consignment recorded in account 157 should be valued at cost as regulated in rd Vietnamese Accounting Standard No. 02 Inventories . 2. Account 157 Goods on consignment is used to record the goods shipped to customer, an agent acc on consignment and divisions or services which have been rendered according to economics der contract or the purchase order but have not been considered as sold goods and services that have been shipped or provided have not been recognized as sale in period yet . 3. Goods recorded in this account still belong to the enterprise. The accountant must open a detailed still journal for each type of finished goods and merchandise delivered until they are accepted for finished delivered payment. handling 4. This account is not used to record the transportation expenses, handling expenses or advances to customer. according 5. Account 157 may be kept track in details according to each type of goods, products on consignment and services provided to customer and each agent on consignment. STRUCTURE AND CONTENTS OF ACCOUNT 157 – GOODS ON CONSIGNMENT Debit: Value of merchandise, finished goods delivered to customers, agents on consignment or divisions; which Cost of services rendered to customers which have not been determined as sold; At the end of the period, the merchandise and finished goods shipped which has been determined as sold shall be transferred if the enterprise uses the periodic inventory method .

Credit: Value of merchandise, finished goods shipped, and services provided which have been determined as sold; Value of merchandise, finished goods, and services shipped but then were returned by the customer;

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At the beginning of the period, the value of merchandise, finished goods shipped, and services provided has not been determined as sold if the enterprise uses the periodic inventory method . Debit balance:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Value of merchandise, finished goods shipped which have not been determined as sold during period. MAJOR TRANSACTIONS I. Where the enterprise uses the perpetual inventory method 1. When enterprise ships merchandise, finished goods to customer, agent on consignment according to economic contract, based on goods dispatch note and goods on consignment to record: Dr. 157 Goods on consignment Cr. 156 Merchandise goods Cr. 155 Finished goods 2. Services rendered to customer but have not been determined as sold during period: Dr. 157 Goods on consignment Cr. 154 Work in progress services 3. When goods on consignment and completed services rendered to customer have been determined to be sold during period: If merchandise, services are subject to VAT and enterprise pays VAT in subtraction method, sale goods of goods, finished goods sold, services rendered is recorded according to the sale price-exclusive VAT. Dr. 131 Accounts receivable Cr. 511 Sales sale price-exclusive VAT Cr. 3331 VAT payable 33311 If merchandise services not subject to VAT or subject to VAT in direct method: Dr. 131 Accounts receivable Cr. 511 Sales total amount At the same time, cost of goods sold in the period is recorded: Dr. 632 Cost of goods sold Cr. 157 Goods on consignment 4. When the enterprise shipped merchandise, finished goods subject to VAT in subtraction method and the enterprise pays VAT in subtraction method to its divisions, based on the goods dispatch note cum internal transport note, the accountant of the enterprise records as follows: Dr. 157 Goods on consignment prime cost Cr. 155 Finished goods Cr. 156 Merchandise goods Periodically, based on the list of selling invoices prepared by the divisions, the enterprise issues VAT invoice for goods transferred internally. Based on VAT invoice, the accountant records: Dr. 111, 112, 136 Internal sale price including VAT Cr. 3331 VAT payable 33311 Cr. 512 Inter-company sales internal sale price-exclusive VAT
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At the same time, cost of goods sold is recorded: Dr. 632 Cost of goods sold Cr. 157 Goods on consignment 5. In case, merchandise and finished goods shipped are returned by customer: a. Merchandise or finished goods can be sold or repaired: Dr. 156 Merchandise goods; or Dr. 155 Finished goods Cr. 157 Goods on consignment b. Merchandise or finished goods can not be sold or repaired: Dr. 632 Cost of goods sold Cr. 157 Goods on consignment II. Where the enterprise uses the periodic inventory method 1. At the beginning of the period, the enterprise must transfer the value of merchandise and finished consignment goods shipped to customer, an agent on consignment and the value of services rendered but have The recorded not yet determined as sold in the period. The accounting entry is recorded as follows: Dr. 611 Purchases for merchandise goods Dr. 632 Cost of goods sold for finished goods and services Cr. 157 Goods on consignment the 2. At the end of the period, based on result of the physical inventory count the enterprise determines the value of merchandise, finished goods both finished and semi-finished on consignment and services rendered have not been considered as sold at the end of the period: which The value of goods shipped to customers which have not been accepted for payment and merchandise sent out on consignment therefore is not considered to be sold at the end of the period: Dr. 157 Goods on consignment Cr. 611 Purchases At the end of the period, the enterprise must transfer the value of finished goods shipped to customer or sent out on consignment, and the value of services rendered to customer which have not been determined as sold at the end of the period: Dr. 157 Goods on consignment Cr. 632 Cost of goods sold

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 158 GOODS IN BONDED WAREHOUSE This account records current value and movement of goods in bonded warehouse. Bonded warehouse is only used for foreign invested enterprises to produce exports under special customs regulation. Imported raw materials for production, which are stored at bonded warehouse, are not subject to import duty as well as other relevant taxes. Imported raw materials and finished goods which are stored at bonded warehouse only include raw materials used in production and finished goods produced owned by the enterprises. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Bonded warehouse is only set up at enterprise that is established under the Foreign Investment Law in Viet Nam currently replaced by Investment Law for exports purpose at least export of 50% of its products . completely 2. The enterprise must record completely and timely the input and output of raw materials, materials and merchandises imported and exported and finished goods stored under current regulations of exported Viet Nam. 3. Bonded warehouse should be located in area that is convenient for management and supervision of customs. 4. Imports transferred in bonded warehouse must not be sold in Vietnam market. Under special not circumstances, the Ministry of Trade allowed to sell the imports in Vietnam market, the enterprise must pay import tax and other taxes under current regulations. 5. If goods in bonded warehouse are damaged or have poor quality not satisfying requirement of production, the customs shall require to re-export or destroy those goods as regulated by the General Custom Department under supervision of the customs, tax and environment agency. 6. The enterprise must be kept track in detail to record quantity and value of each raw material, goods according to each input and output. STRUCTURE AND CONTENTS OF ACCOUNT 158 – GOODS IN BONDED WAREHOUSE Debit: The value of raw materials, finished goods and merchandises put in bonded warehouse during the period. Credit: The value of raw materials, finished goods and merchandises in bonded warehouse used during the period.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Debit balance: The balance of raw materials, finished goods and merchandises in bonded warehouse at the end of the period. MAJOR TRANSACTIONS 1. When the raw materials imported for production of goods to export or processing export are transferred into bonded warehouse, the enterprise has not to pay import duty and VAT: Dr. 158 Goods in bonded warehouse Cr. 331 Trade payable e 2. When imported raw materials in bonded warehouse used in production, or processing exports: Dr. 621 Raw materials cost Cr. 158 Goods in bonded warehouse 3. When finished goods, exports and processing exports transfer to bonded warehouse if any : Dr. 158 Goods in bonded warehouse Cr. 155, 156 4. When goods in warehouse is exported if any : Record of cost of goods in bonded warehouse sold: Dr. 632 Cost of goods sold Cr. 158 Goods in bonded warehouse s Record of sales of goods in bonded warehouse: Dr. 111, 112, 131 Cr. 511 Sales 5. If the export ratio is lower than the bonded rate, the enterprise must pay import tax and VAT if any for difference between exports that must be done and the actual exports: When the enterprise determines import tax payable if any : Dr. 632 Cost of goods sold Cr. 333 Tax and statutory obligations 3333 import, export duties When VAT payable of imports if any is determined: Dr. 133 VAT deductible 1331 VAT deductible of merchandise and services Cr. 333 Tax and statutory obligations 33312 Import VAT When the enterprise paid import tax and VAT if any : Dr. 333 Tax and statutory obligations 3333 Import, export tax payable Dr. 333 Tax and statutory obligations 33312 Import VAT Cr. 111, 112
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6. In the case, the enterprise is allowed to sell goods in bonded warehouse in Vietnamese market by the Ministry of Trade, the enterprise must pay import tax and other taxes under current regulation. When the enterprise is allowed to use goods in bonded warehouse, the enterprise must transfer goods in bonded warehouse to the normal warehouse of the enterprise and pay tax for those goods. Dr. 155, 156 Cr. 158 Goods in bonded warehouse At the same time, the enterprise should record the import tax and VAT payable: When the enterprise determines import tax payable if any : Dr. 155, 156 Cr. 333 Tax and statutory obligations 3333 Import, export tax payable When the enterprise determines VAT payable if any : Dr. 155, 156 if not deductible deductible Dr. 133 VAT deductible 1331 VAT deductible of merchandise and services Cr. 333 Tax and statutory obligations 33312 Import VAT When enterprise paid import tax and VAT, the accountant shall record: Dr. 333 Tax and statutory obligations 33312, 3333 Cr. 111, 112 7. If the goods in bonded warehouse sold in the local market: Cost of goods in bonded warehouse sold is recorded as follows: Dr. 632 Cost of goods sold Cr. 158 Goods in bonded warehouse At the same time, the enterprise must determine import tax and VAT payable of the goods, products, raw materials in bonded warehouse and record as guided in the entry 5 . The enterprise should record sales of goods in bonded warehouse sold as follows: Dr. 111, 112, 131 Cr. 511 Sales Cr. 333 Tax and statutory obligations 33311 Output VAT 8. If goods in bonded warehouse are damaged or have poor quality not satisfying requirement of export, the enterprise must import the new ones or destroy the old ones: If the goods are re-imported: Dr. 155, 156 Cr. 158 Goods in bonded warehouse
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC At the same time, the enterprise must determine the amount of import tax and VAT payable of the goods as guided in the entry 6 . When enterprise paid taxes: Dr. 333 Tax and statutory obligations 33312, 3333 Cr. 111, 112 If enterprise re-exported returned to suppliers : Dr. 331 Trade payable Cr. 158 Goods in bonded warehouse If the goods are destroyed: handise, Dr. 632 Cost of good sold the merchandise, raw materials are destroyed Cr. 158 Goods in bonded warehouse

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 159 PROVISION FOR OBSOLETE STOCK This account records provision for obsolete stock made when there is reliable evidence that the net realizable value of the inventory declined as compared with its cost. Provision is an estimated amount that is recorded into production and business expenses the value declined below the book value of the inventory. Provision is made to compensate for losses due to a decline in the value of materials, merchandise; as well as to reflect the net realizable value of the inventory on the financial statement at the year end. Net realizable value of inventory is the estimated selling price of inventories in a normal production and business period minus - the estimated cost for completing the products and the estimated cost needed for their consumption. Provision of inventory is recorded in account 159 Provision for obsolete stock to adjust the cost value in the inventory accounts. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS: 1. Provision for obsolete stock is made when net realizable value of inventory is lower than its cost. The provision is recorded in cost of goods sold in period. cost 2. Inventory provision should only be made at the end of the accounting period when the financial statements are prepared. The inventory provision must be made under regulations of Vietnamese Accounting Standard Inventories and the current regulations of the financial regime. For Inventories enterprises that prepare and issue the interim financial statement publicly such as listed interim companies, the enterprises may consider and adjust the provision made on the balance sheet as consider complied with the value principle of inventory of below net realizable value If the net realizable value of inventory is lower than its cost . 3. Provision should be computed for each type of inventory. For services provided in progress, provision should be computed for each type of services. 4. At the end of the fiscal year, based on quality, original price, net realizable value of each material, merchandise, and service provided in progress, the accountant determines the provision for obsolete stock required for the following fiscal year: If provision for obsolete stock required in the current year is greater than the unused provision for obsolete stock made in the prior year, the additional provision shall be recorded leading to an increase in the cost of good sold. If provision for obsolete stock required in the current year is lower than the unused provision for obsolete stock made in the prior year, the difference is deducted into provision leading to a decrease in the cost of good sold.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC STRUCTURE AND CONTENTS OF ACCOUNT 159 – PROVISION FOR OBSOLETE STOCK Debit: Value of inventory provision reversed by reduction cost of goods sold in period. Credit: Provision made and recorded into cost of goods sold in period. Credit balance: Balance of inventory provision at the end of the period. MAJOR TRANSACTIONS: 1. At the end of the fiscal year or of the quarter , when enterprise made the initial provision for obsolete stock: Dr. 632 Cost of goods sold Cr. 159 Provision for obsolete stock fiscal 2. At the end of the following fiscal year or of the quarter : If provision for obsolete stock required in the current year is greater than the unused provision for obsolete stock made in the prior year, the difference shall be recorded as follows: Dr. 632 Cost of goods sold provision by details Cr. 159 Provision for obsolete stock If provision for obsolete stock required in the current year is lower than the unused provision for obsolete stock made in the prior year, the difference shall be recorded as follows: Dr. 159 Provision for obsolete stock Cr. 632 Cost of goods sold provision by details

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 161 EXPENDITURES FROM SUBSIDIES OF STAGE BUDGET This account records expenditures for activities and projects covered by State Budget serving certain economic, political and social mission assigned by the State or higher authorities from non-business activities without any profit purpose. The amount spent for non-profit activities, projects is covered by State Budget, Official Development Assistance or from higher authorities; or aided and nonrefundable. This account only applies to the entities that have not-profit operations or projects funded by the State Budget or subsidized by higher authorities or aided, not refundable. Those entities maybe use the income from not-profit activities to cover its expenses. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Enterprise must be recorded in details according to each expenditure sources, fiscal year, budget according year and classification of State Budget items. 2. Accounting for expenditures for not profit operations or projects must be in line with the budget prepared and consistent and reconciled among the accounting books, supporting documents as well as the financial statements. funds 3. This account records expenditures from subsidy funds of State Budget, annual project funds of expenditures enterprise including regular and irregular expenditures under the current financial management policies. 4. At the end of the year, if the expenditures incurred in the current year have not been approved, the balance of credit side of account 1612 Current year budget will be reallocated to debit side of account 1611 Prior year budget while waiting for approval. STRUCTURE AND CONTENTS OF ACCOUNT 161 – EXPENDITURES FROM SUBSIDIES OF STATE BUDGET Debit: Expenditures from subsidies of State Budget incurred. Credit: Expenditures not approved and therefore must be paid from another source. Expenditure approved to be covered by subsidy funds or project funds.

Debit balance: Expenditures from subsidies and from projects of State Budget which have not been finalized or the finalized report has not been approved.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Account 161 - Expenditures from subsidy of State Budget has two sub-accounts Account 1611 - Prior year budget: to record prior years expenditures from subsidies of State Budget and from projects which have not been approved. Account 1612 - Current year budget: to record the current year expenditures from subsidies of State Budget and from funded project. MAJOR TRANSACTIONS 1. Payment for not-profit activities, programs and projects covered by the subsidy fund and the project fund: Dr. 161 Expenditure from subsidies of State Budget 1612 Cr. 111, 112 2. Salary and other payable to employees or suppliers that are funded by subsidy and project fund: Dr. 161 Expenditure from subsidies of State Budget 1612 Cr. 334 Payable to employees Cr. 331 Trade payable 3. Using materials, tools and supplies for state and project activities: Dr. 161 Expenditure from subsidies of State Budget 1612 Cr. 152 Raw materials Cr. 153 Tools and supplies authorities 4. Receipt of fund from higher authorities or withdrawal of forecast to pay directly for state and project activities: Dr. 161 Expenditure from subsidies of State Budget 1612 Cr. 461 Subsidy funds from State Budget If enterprise withdrawn the forecast from State Budget to spend, at the same time must credited in account 008 Subsidies of State Budget Off balance sheet accounts . 5. When enterprise transferred completed extraordinar repair expenses to use for state and project extraordinary activities: Dr. 161 Expenditure from subsidies of State Budget 1612 Cr. 241 Construction in progress 2413 Extraordinary repair 6. If enterprise acquired fixed assets or invested construction for State and project activities from State Budget: When the enterprise acquires fixed assets or completed construction investment transferred to use: Dr. 211 Tangible assets Cr. 111, 112, 331, 241, 461 At the same time, records as follows:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 161 Expenditure from subsidies of State Budget 1612 Cr. 466 Sources for acquisition of fixed assets If the enterprise withdrawn the forecast from State Budget to acquire fixed assets, the single entry is credited in account 008 Subsidies of State Budget Off balance sheet accounts . 7. When the enterprise drawn social insurance, health insurance and trade union fees from salary of employees who participated in the state and project activities: Dr. 161 Expenditure from subsidies of State Budget 1612 Cr. 338 Other payable 3382, 3383, 3384 8. At the end of year, if the balance-sheet has not been approved, the accountant should transfer the accoun debits balance of account 1612 Current year budget to account 1611 Prior year budget : Dr. 1611 Prior year budget Cr. 1612 Current year budget 9. When the balance-sheet is approved, amount of expenditure from subsidies and from projects are covered by subsidy funds from State Budget: Dr. 461 Subsidy funds from State Budget 4611 Prior year subsidy funds from State Budget Cr. 161 Expenditure from subsidies of State Budget 1611 Prior year budget 10. Sending from the subsidy fund was not right, they will not be approved by the authorized agency and must be recovered: Dr. 138 Other receivable 1388 Cr. 161 Expenditure from subsidies of State Budget 1611 Prior year budget

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC CATEGORY 2 NON-CURRENT ASSETS A corporation s non-current assets constitute tangible assets, intangible assets, finance lease assets, investment property, investments in subsidiaries, investment in associates, shares in joint ventures, Other long term investments, construction in progress, long term prepaid expenses, deferred tax assets. THIS CATEGORY MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. When accounting for non-current assets, the historical cost principle must be followed. Furthermore, fixed assets must be presented at their net book value. are 2. The three values associated with fixed assets are as follows: cost, accumulated depreciation, and net book value. Net book value equals = cost minus - accumulated depreciation of fixed assets 3. Fixed assets should be properly classified in accordance with the accounting statistical reports accordance for the purpose of management and government authorities. 4. Long term investments include long term securities investment, investments in a joint securities venture, investments in real estate etc. The current value as well as all increases and decreases in securities must be recorded. Furthermore, real estate must be recorded at historical cost. Lastly, investments in joint ventures must be recorded at actual costs incurred with the joint recorded venture . Detailed records must be maintained to keep track of individual investments, expenses if any and income arising from long term financial activities. Non-current assets include fourteen accounts, divided into three groups: accounts, Group Account 21 - Fixed assets are composed five accounts: Account 211 - Tangible assets Account 212 - Finance lease assets Account 213 - Intangible assets preciation Account 214 - Accumulated depreciation and amortisation Account 217 - Investment property Group Account 22 - Long term investments are composed five accounts: Account 221 - Investments in subsidiaries Account 222 - Shares in joint ventures Account 223 - Investment in associates Account 228 - Other long term investments Account 229 - Provision for long term investments Group Account 24 – Other non-current assets is composed four accounts: Account 241 - Construction in progress Account 242 - Long term prepaid expenses Account 243 - Deferred tax assets Account 244 - Long term deposits
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 211 TANGIBLE ASSETS This account reflects the current value and movements of all tangible assets of the entity at historical costs. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Tangible assets mean assets in physical form which are possessed by the enterprises for use in production and business activities in conformity with the recognition criteria of tangible assets. 2. Tangible assets must have independent structures or many independent components united to be a system doing one or several certain utilities. All the system w not work if any component will of the system is lack. Tangible assets must satisfy all following four recognition criteria: a. Future economic benefits will surely be obtained; b. Their historical cost has been determined in a reliable way; c. Their useful life is estimated at more than one year; d. They meet all value criteria according to current regulations no less than 10 million VND . components A system consists of many independent components being united, in which each component components has different useful life. If one of the components is lack, the system still works on main activities. However, for the purpose of managing and using fix assets, each component is satisfies managed independently. If each component satisfies simultaneously four standards of fixed assets, each one is considered a tangible asset. Working animals and animals fed for the purpose of getting their products are considered tangible assets if they independently satisfy simultaneously four recognition criteria of tangible assets. Long live trees gardens are considered fixed assets if any part of the garden, or trees satisfies simultaneously four recognition criteria of fixed assets. 3. Tangible assets are recorded in account 211 at historical cost. The historical cost of each individual fixed asset should be recorded in detail. Historical cost of tangible assets is determined as follows: a. Historical cost of purchased tangible assets: Historical cost of purchased tangible assets consists of buying price minus - trade discounts and price reductions , taxes excluding reimbursed tax amounts and expenses directly related to the putting of the assets into the ready-for-use state, such as ground preparation expense; initial transportation, loading and unloading expense; installation and trial operation expense minus - amounts recovered from products and wastes turned out from trial operation ; expert cost and other directlyrelated expenses. For fixed assets purchased for production of goods and services subject to subtraction method VAT, the value of fixed assets is recorded at buying price excluding VAT.
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC For fixed assets purchased for production of goods and services not subject to VAT or subject to VAT in direct method, or using in State activities, projects or programs or for social welfare activities, the value of fixed assets is recorded at total amount including VAT. b. Tangible assets formed from construction investment by contractual mode: The historical costs of tangible assets formed from construction investment by contractual mode are the settled costs of the invested construction as current regulations on managing of investment and construction, other directly related expenses and registration fee if any . Fixed assets are working livestock or livestock fed for products, Long term orchard, historical cost is the actual expenses paid to these livestock, orchards from the beginning to the time of come into use as current regulations on managing of investment and construction, other related expenses. c. Tangible assets purchased in deferred payment mode: The historical cost of tangible assets purchased in deferred payment mode shall be shown at the buying price promptly paid at the purchase time. The difference between the payable total amount and the promptly-paid buying price shall be accounted as expense in the payment period. d. Self-constructed or self made tangible assets: the historical cost of self-constructed or self made tangible assets is its actual cost plus + installation and trial operation cost. Where the themselves enterprises turn the products made by themselves into fixed assets, the historical costs shall be the production costs of such products plus + the expenses directly related to the putting of the fixed assets into the ready-for-use state. In these cases, all internal profits must not be included in the historical cost of these assets. Unreasonable expenses, such as wasted assets. materials and supplies, labour or other costs in excess of the normal levels arising in the selfconstruction or self-generating process must not be included in the historical cost of tangible assets. e. Tangible assets purchased in exchange form: The historical cost of a tangible fixed asset purchased in the form of exchange for a dissimilar tangible asset or other assets shall be determined according to the reasonable value of the received tangible assets, or that of the exchanged ones, after adjusting the cash amounts or cash equivalents which are additionally paid or received. The historical cost of a tangible asset purchased in the form of exchange for similar one, or fo possibly formed through its sale in exchange for the right to own similar ones similar assets bus are those with similar utilities, in the same business field and of equivalent value . In both cases no profit or loss is recognized in the exchange process. The historical cost of the received asset shall be the residual value of the exchanged one. f. Tangible assets granted or received: Historical cost of tangible assets granted or received consists of the net book value of the fixed assets recorded on the book of the entity that sent the assets to or the actual value determined by the Handover Committee and expenses for transporting, loading, for upgrade, assemble, trial test, registration excise if any that the entity received the assets pays to put the assets into use. Historical cost of tangible assets transferred among divisions in the company is the historical cost recorded in the entity received following documents of those assets. Based on the historical cost, accumulated depreciation, the net book value in the accounting book and documents of the assets, the entity received those assets records into its accounting book. Expenses related to the transfer assets among divisions of the company is not recorded to the historical cost of assets but recorded into production, business expenses in the period.
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g. Tangible assets augmented from joint venture contribution, recollecting the capital contribution surplus, donation and present, etc.: Historical cost of assets augmented from joint ventures, recollecting the capital contribution surplus, donation and present etc., is the actual value decided by the Handover Committee and the expenses directly related to the putting of the assets into the ready-for-use state such as expenses for transporting, loading, assemble, trial test, registration excise if any . 4. The historical cost of tangible assets is changed only in the following cases: Revaluation of fixed assets following the State decision; Additional construction and equipment provided for fix assets; useful Changing parts of fixed assets to increase the useful life, or increase the power of assets; Improving parts of fixed assets to increase considerably qualities of productions; Using new producing technology progress to decrease running cost of assets; De-assembling one or some parts of fixed assets.

5. All increases and decreases of fixed assets must be recorded in the minutes and comply with accountant's the respective regulations. It is the accountant's responsibility to set-up and complete fixed assets registers. 6. Tangible assets under operating lease must be depreciated as regulations of current accounting standard and financial policies. 7. Tangible assets must be recorded in details for each asset, kinds of fixed assets and location, time started using and their status for managing fixed assets. ACCOUNT STRUCTURE & CONTENTS OF ACCOUNT 211 - TANGIBLE ASSETS Debit: Increase due to completion of construction in progress, purchases, contributions by the joint venture parties, donations, aid, etc.; Increase due to additional equipment and improvements of fixed assets; Increase of the fixed assets historical cost due to revaluation.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Credit: Decrease in the historical cost of tangible assets due to transfers to other enterprises, disposals or contribution to a joint venture; Decrease in the historical cost of fixed assets due to disassembling parts of the fixed assets; Decrease due to the devaluation of fixed assets.

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Debit balance: The current value of fixed assets at the enterprise. 211 six

Account 2111 – Architect costs, building: to record the value of construction projects such as buildings, architect costs, fences, water tower, water tanks, park, decoration, infrastructure projects such as roads, bridges and locks, railway, quay and wharf, etc. Account 2112 - Machinery equipment: to record value of machinery and equipment used in the business, production activities comprising of specialized machinery, equipment assembly lines and single machines. Account 2113 - Transportation and facilities: to record value of transportation facilities Transportation consisting of road, railway, waterway, airway, pipe lines and carrying facilities communications utilities, merchandises/material conveyor belt . merchandises/material Account 2114 - Office equipment: to record value of equipment and tools used in business and administrative management computer, ceiling fans, stand fans, tables and chairs, measuring equipment, quality testing equipment, vacuum and cleaners, etc. . Account 2115 - Long life tree, working and producing animals: to record value of all long life trees coffee, tea, rubber, orchid etc. , working animals elephant, horse, cow,.. and animals working fed for the purpose of getting their products milk cow, breeding animals etc. . Account 2118 - Other tangible assets: to record value of other tangible assets not included above art, technical manuals etc. .

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MAJOR TRANSACTIONS I. Increase in tangible assets Increase in fixed assets due to financing from parent company SOEs , contributions of fixed assets, purchasing, and completion of construction activities, donation and aid. 1. Receipt of shares in joint ventures or capital as tangible assets: Dr. 211 - Tangible assets Cr. 411- Paid-in capital 2. Acquisitions of tangible assets 2.1. Acquisitions of tangible assets new or used used in producing, selling goods, services
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC subject to subtraction method VAT, according to documents involved in purchasing fixed assets, the accountant defines historical cost of fixed assets, prepares the hand-over minute of fixed assets and records: Dr. 211 - Tangible assets price excluding VAT Dr. 133 - VAT deductible 1332 Cr. 111, 112, ... Cr. 331 - Trade payables Cr. 341 - Long term borrowings 2.2. Purchasing fixed assets for producing, selling goods, services not subject to VAT or subject to VAT in direct method: Dr. 211 - Tangible assets total amount Cr. 111, 112, ... Cr. 331 - Trade payables Cr. 341 Long term borrowings 2.3. If fixed assets are acquired by funds for construction expenditures or corporation s business construction development funds for business and production activities, the accountant must increase business activities, funds and decrease for construction expenditures or decrease business development funds when expenditures on the finalization of construction investment is approved: Dr. 414 - Business development funds Dr. 441 - Funds for construction expenditures Cr. 411 - Paid-in capital 3. Acquisition of tangible assets in deferred, instalment method: Purchasing tangible assets in deferred, instalment method and immediately used in business activities: Dr. 211 - Tangible assets historical cost at sight price Dr. 133 - VAT deductible 1332 if any Dr. 242 Long term prepaid expenses long term prepaid expenses deferred interest expenses is the total payment minus - the at sight price minus - VAT, if any Cr. 331 - Trade payables total amount Periodically, make payment to the sellers: Dr. 331 - Trade payables Cr. 111, 112 periodic payment includes both the historical cost and the periodic deferred and instalment interest expenses Periodically, record into expenses based on the deferred, instalment interest expenses in each period: Dr. 635 Financial expenses Cr. 242 - Long term prepaid expenses 4. Corporation is donated, gifted fixed assets used in business and production activities: Dr. 211 - Tangible assets
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 711 - Other incomes Other costs directly involved in the donated, gifted assets are recorded in historical cost: Dr. 211 - Tangible assets Cr. 111, 112, 331, ... 5. Self-produced fixed assets: When use products being self-produced to change into fixed assets for business and production activities: Dr. 632 Cost of goods sole Cr. 155 - Finished goods if used Cr. 154 - Work in progress if put into use, not through the company s premise Simultaneously, increase tangible assets: Dr. 211 Tangible assets revenue Cr. 512 Inter-company revenue the revenue is the actual cost of the product Record of expenses for assembling, test running involved in tangible assets: Dr. 211 - Tangible assets Cr. 111, 112, 331,... 6. Acquisition of tangible assets as bartering: 6.1. When receiving the similar tangible assets as bartering and using in production, business activities immediately: Dr. 211 - Tangible assets historical cost of the assets received based on the net book value of the assets sent as bartering asset Dr. 214 - Accumulated depreciation of fixed assets depreciated value of the assets sent as bartering Cr. 211 Tangible assets historical cost of the assets sent as bartering ing dissimila 6.2. The tangible assets purchased as bartering with the dissimilar tangible assets: When sending the tangible assets as bartering: Dr. 811 - Other expenses the net book value of the tangible assets sent as bartering Dr. 214 - Accumulated depreciation of fixed assets depreciated value Cr. 211 Tangible assets historical cost Simultaneously increase the income from exchanging fixed assets: Dr. 131 - Trade payables total amount Cr. 711 - Other incomes the fair value of fixed assets sent as bartering Cr. 3331 VAT account 33311 if any When receiving tangible assets as bartering:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 211 Tangible assets fair value of fixed assets received as bartering Dr. 133 VAT deductible 1332 if any Cr. 131 - Trade payables total amount Receipt of additional money since the value of the sent assets are higher than the value of the received assets in exchange: Dr. 111, 112 additional amount Cr. 131 - Trade payables Additional payment since the value of the sent assets are lower than the value of the received assets in exchange: Dr. 131 - Trade payables Cr. 111, 112,... 7. Acquisition of tangible assets such as buildings, architect costs attached to land used rights and put in to production and business activities: Dr. 211 Dr. 213 Dr. 133 Tangible assets historical cost - detailing in buildings, architect costs Intangible assets historical cost - detailing in land use rights VAT deductible if any Cr. 111, 112, 331,...

8. Tangible assets increases when finished construction investment: 8.1. Construction recorded in the same accounting book system of the company: When the construction is completed, finalized and put into production, business: finalized Dr. 211 Tangible assets historical cost Cr. 241 Construction in progress

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If the assets formed by the investment do not satisfy the recognition criteria of tangible assets as regulations of the accounting standard: Dr. 152, 153 materials, tools and supplies received Cr. 241 - Construction in progress

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If the construction has been funded by construction capital fund or other capital funds, the accountant will record an increase in paid in capital and a decrease in the funds as approved.

8.2. Construction investment is not recorded in the same accounting book of the entity the investor has a separate accounting book to record the investment : When the company is handed over the completed construction and the source formed the assets including the borrowings for construction projects : Dr. 211 Tangible assets historical cost Dr. 133 VAT deductible 1332 deducted amount Cr. 411 - Paid-in capital owner s equity Cr. 341 - Long term borrowings borrowed from credit institutions ; or Cr. 343 - Debt securities capital from issuing bond
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 136 Inter-company receivable capital granted from the high authority

For SOEs, if the assets invested for long-term are completed, finalized and handed over, the value to be recorded shall be the value at the time of handover value agreed by the authority : Dr. 211 Tangible assets historical cost approved Dr. 133 VAT deductible 1332 if any Cr. 411 - Paid-in capital owner s equity Cr. 341 - Long term borrowings Cr. 136 Inter-company receivable The assets completed shall be handed-over accompanying with the long term borrowings and debts formed those assets.

9. When the construction or its categories is completed and put into use but has not been completed finalized and approved yet, based on the actual expenses for construction the company records the estimated cost to increase the tangible assets a a base to calculate the as depreciation for the assets put in use . After the finalization of the investment is approved, any difference from the estimated value shall be adjusted. 10. Capital contribution to joint ventures in the form of assets shall be recorded based on the form value agreed by parties: Dr. 211 Tangible assets Cr. 411 - Paid-in capital 11. Record of fixed assets transferred within the General Corporation without payment : Dr. 211 - Tangible assets historical cost Cr. 214 - Accumulated depreciation of fixed assets depreciated value Cr. 411 - Paid-in capital net book value 12. When use subsidies of State Budget, or of funded project to invest, purchase fixed assets and then put the purchased ones into State projects or activities: Dr. 211 Tangible assets Cr. Account 111, 112 Cr. 241 - Construction in progress Cr. 331 - Trade payables Cr. 461 - Subsidy funds from State Budget 4612 Simultaneously record an increase in the sources for acquisition of fixed assets: Dr. 161 - Expenditures from subsidies of State Budget 1612 Cr. 466 - Sources for acquisition of fixed assets For budgeted assets acquisition, record a single entry to credit side of account 008 for expenditures from subsidies of State Budget. Budget

13. Acquisition of fixed assets funded by welfare funds that is completed and then used for cultural, welfare activities:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 211 Tangible assets Total amount Cr. 111, 112, 331, 341,... Simultaneously record a decrease in the welfare funds: Dr. 4312 - Welfare funds Cr. 4313 - Welfare funds to purchase fixed assets 14. Expenses created after the initial recognition involving in tangible assets such as expenses for repair, improvement and upgrade: When expenses for repair, improvement of the tangible assets incurred after the initial recognition: Dr. 241 Construction in progress Dr. 133 VAT deductible 1332 Cr. 112, 152, 331, 334,... When the repair, improvement of fixed assets is completed and put them into use: If the expenses satisfied the recognition criteria of tangible assets, then an increase to the historical cost of tangible assets is recorded: Dr. 211 Tangible assets Cr. 241 - Construction in progress If the expenses satisfied recognition criteria of tangible assets, an increase to the historical cost of tangible assets is recorded: Dr. 623, 627, 641, 642 if the value is low Dr. 242 Long term prepaid expenses in case of allocation of high value in long term Cr. 241 - Construction in progress II. Decrease in tangible assets Decrease of fixed assets may be due to many different reasons such as disposals, damage, shortage of fixed assets in physical collation, cont contributions to a joint venture, transfer to other enterprises, disassembling some parts of the fixed assets etc. For all decreases in the value of fixed assets, the accountant must complete all necessary procedures and determine any gains or losses. Based on the relevant documents, the accountant would record the following: 1. Sales of fixed assets used in business, production activities, or in State projects and activities: In most cases, fixed assets are sold because the company no longer uses them or they are ineffective. When fixed assets are sold, the necessary procedures should be followed a committee is set up to value the assets, publicly report and auction organisation, business contract and document of transferred fixed assets are prepared . Based on the sales documents or receiving vouchers from the sale of fixed assets to record the following: 1.1. Sales of fixed assets used in business, production activities:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC

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If the company subject to subtraction method VAT, proceeds from the sales of fixed assets are recorded as follows: Dr. 111, 112, 131, ... Cr. 3331 - VAT payable 33311 Cr. 711 Other incomes price not include VAT

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If the company subject to VAT in direct method, proceeds from the sales of fixed assets are recorded as follows: Dr. 111, 112, 131, ... Cr. 711 - Other incomes total amount

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Based on the sales documents of fixed assets to write off the sold assets: Dr. 214 - Accumulated depreciation of fixed assets 2141 depreciated value Dr. 811 Other costs the net book value Cr. 211 Tangible assets historical cost

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Other costs involving in selling the fixed assets are debited into account 811 "Other incomes".

1.2. Sale of tangible assets used in State projects and activities: Based on the sales documents of fixed assets to reduce the sold fixed assets: Dr. 466 - Sources for acquisition of fixed assets net book value Dr. 214 - Accumulated depreciation of fixed assets depreciated value Cr. 211 Tangible assets historical cost Income involving in the sale of tangible assets is recorded into related accounts as regulations of authorised agency.

1.3. Sales of tangible assets used in cultural, welfare activities: transferred Based on the minute of fixed assets transferred to reduce the sold assets: Dr. 431 - Bonus and welfare funds 4313 the net book value Dr. 214 - Accumulated depreciation of fixed assets depreciated value Cr. 211 Tangible assets historical cost Simultaneously record the income from the sales of fixed assets: Dr. 111, 112, Cr. 431 - Bonus and welfare funds 4312 Cr. 333 - Tax and statutory obligations 3331 If any Record the expenses from the sales of assets: Dr. 431 - Bonus and welfare funds 4312 Cr. 111, 112,
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 2. Accounting for fixed assets disposals Fixed assets are disposed of for the following reasons: they are damaged and can no longer be used, they are technically obsolete or no longer suitable for business, production demands. When it has been decided to dispose of fixed assets, the company must select a team of workers to take care of the disposal. This team is responsible for organizing the disposal in accordance with process, procedures in the financial management regulations and preparing Minute of disposal of fixed assets as regulated template. Minutes are made in duplicate in which one copy goes to the accounting department and the other copy goes to the department which used the asset. Based on the fixed asset disposal minute and relevant documents, the accountant will record the fixed assets disposal as the sale of fixed assets l 3. Contribute to jointly control entity by tangible assets: y 3.1. When contribute to jointly control entity by fixed assets: Dr. 222 - Shares in joint ventures value agreed by parties ulated Dr. 214 - Accumulated depreciation of fixed assets depreciated amount r difference Dr. 811 - Other incomes difference of revalued amount and net book value Cr. 211 - Tangible assets historical cost Cr. 3387 - Deferred income difference between revalued amount and net book value of fixed assets shall be deferred in corresponding to the company s benefit in the joint venture Cr. 711 - Other incomes difference between revalued amount and net book value of fixed assets in corresponding to the company s benefit of other parties in the venture . 3.2. Periodically, based on the useful life of fixed assets that th jointly control entity uses, the the accountant shall allocate the deferred income to other income in the period: income Dr. 3387 - Deferred income details of difference due to the revaluation of fixed assets difference contributed to jointly control entity ; Cr. 711 - Other incomes the deferred income allocated in the period 4. Accounting for the surplus or shortage of tangible assets: The surplus or shortage of fixed assets must be specified the reasons. Based on the Fixed assets physical counting report" and the conclusion of the counting committee, the accountant should accurately record the surplus or shortage and on a timely basis. 4.1. Surplus of fixed assets: The surplus in assets due to assets not being recorded, the accountant must record the increase in fixed assets for each specific case based on the related documents: Dr. 211 Tangible assets Cr. 241, 331, 338, 411, If the surplus of fixed assets are being used, besides recording the increase in fixed assets, based on the historical cost and depreciation rate, the accountant must calculate the
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC depreciation amount to provide additional charge for fixed assets or for assets used in welfare activities or State projects and activities: Dr. Production, business costs Fixed assets used in production, business activities Dr. 4313 - Welfare funds to form fixed assets Fixed assets used for welfare Dr. 466 - Sources for acquisition of fixed assets Fixed assets used for State projects, activities Cr. 214 - Accumulated depreciation of fixed assets 2141 . If the surplus of fixed assets which belong to another entity, that entity should be informed. If the owner of the surplus asset can not be determined, the situation should be reported to the higher level authorities or the financial entity for SOE to resolve the problem. While waiting for an explanation, the accountant should temporarily record the assets to account 002 Materials, merchandise goods held under tr trust or for processing" off balance sheet accounts in order to keep track of it based on the Physical counting report .

sponsible 4.2. The reasons and the person responsible for shortages in assets must be determined. The treatment should be in accordance with the current financial management regulations. If the solution is found out, based on "Report for treatment of fixed assets shortage" and the fixed assets register, the accountant must determine the historical cost and the accumulated depreciation of the fixed assets. This is the base to write off the fixed assets and its net book value. Depending on the solution, the entry is: Shortage of fixed assets used in production and business: Dr. 214 - Accumulated depreciation of fixed assets Depreciation value Dr. 111, 334, 138 1388 If the responsible person will compensate Dr. 411 Paid-in capital If decrease in capital is allowed Dr. 811 Other costs If the company bears the loss Cr. 211 Tangible assets Shortage of fixed assets used in State projects or activities: 1 Decrease in fixed assets: Dr. 214 - Accumulated depreciation of fixed assets depreciation value Dr. 466 - Sources for acquisition of fixed assets the net book value Cr. 211 Tangible assets historical cost 2 The net book value of shortage fixed assets must be collected according to the solution made: Dr. 111 - Cash on hand received in cash Dr. 334 - Payables to employees If deducted into salary of employees Cr. Related accounts depending on specific solution Shortage fixed assets being used in cultural, welfare activities: 1 Decrease in fixed assets: Dr. 214 - Accumulated depreciation of fixed assets depreciation value Dr. 4313 - Welfare funds to make the fixed assets the net book value
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 211 Tangible assets historical cost

2 The rest value of shortage fixed assets must be collected according the solution made: Dr. 111 Cash on hand If received in cash Dr. 334 - Payables to employees If deducted to the salary of employees Cr. 4312 - Welfare funds When the reason for shortage fixed assets has not been found and the solution has not been determined: If shortage fixed assets being used in production, business activities: 1 Decrease in fixed assets and write off the net book value of shortage fixed assets: Dr. 214 - Accumulated depreciation of fixed assets 2141 depreciated value Dr. 138 Other receivables 1381 the net book value Cr. 211 Tangible assets historical cost 2 When a resolution has been made for the net book value of shortage fixed assets: Dr. 111 - Cash in hand compensation received Dr. 138 - Other receivables 1388 If the responsible person will compensate Dr. 334 - Payables to employees If deducted to salary of employees Dr. 411 - Paid-in capital If a decrease in capital is allowed Dr. 811 - Other expenses If the company bears the loss Cr. 138 Other receivables 1381 Shortage of fixed assets used in State projects or activities: 1 Decrease in fixed assets: Dr. 214 - Accumulated depreciation of fixed assets depreciation value Dr. 466 - Sources for acquisition of fixed assets the net book value Cr. 211 Tangible assets historical cost Simultaneously record the net book value of shortage fixed assets into account 1381 Shortage of assets awaiting resolution : Dr. 1381 - Shortage of assets awaiting resolution Cr. 338 Accruals 2 When a resolution for the net book value of shortage fixed assets has been made: Dr. 111, 334,... Cr. 1381 - Shortage of assets awaiting resolution Simultaneously record the compensation for the net book value of shortage fixed assets into related accounts as decided by the authority: Dr. 338 - Other payable Cr. Related accounts Account 333, 461,...
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Shortage fixed assets being used in cultural, welfare activities: 1 Decrease in fixed assets: Dr. 214 - Accumulated depreciation of fixed assets Depreciated value Dr. 4313 - Welfare funds funded fixed assets Net book value Cr. 211 - Tangible assets Historical cost Simultaneously record the net book value of shortage fixed assets into account 1381 Shortage of assets awaiting resolution : Dr. 1381 - Shortage of assets awaiting resolution Cr. 4312 - Welfare funds 2 When a resolution for the net book value of shortage fixed assets has been made: Dr. 111, 334,... Cr. 1381 - Shortage of assets awaiting resolution 5. Assets used in production, business activities do not meet the recognition criteria of tangible assets must be treated as equipments: Dr. 623, 627, 641, 642 If the net book value is low Dr. 242 Long term prepaid costs If the net book value is high and must be allocated Dr. 214 - Accumulated depreciation of fixed assets Depreciated amount Cr. 211 Tangible assets Historical cost 6. Accounting for the sale and lease of tangible assets under the operating lease is referred to guidance in account 811 or 711 .

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 212 FINANCE LEASE ASSETS This account reflects the current value and movements of financial lease assets of the enterprise. A finance lease is a lease whereby the lessor transfers most of the risks and rewards associated with the ownership over an asset to the lessee. The ownership over the asset may be transferred at the end of the lease term. Classification of leases as finance leases if they meet one of five following standards: The lessor transfers the asset s ownership to the lessee at the end of the lease term; At the inception of the lease, the lessee has the right to purchase the leased asset at a price the expected to be lower than the reasonable price at the end of the lease term; e The lease term accounts for most of the economic life of the asset even if the ownership is not life transferred; At the inception of the lease, the present value of the minimum lease payment accounts for value most of the reasonable value of the leased asset; The leased asset is of a special-use type which can be used only by the lessee without major which modification or overhaul. Lease contracts will be also considered finance lease contracts if they fall into at least one of lease the following three cases: If the lessee cancels the contract and pays compensation for damage associated with the contract cancellation to the lessor; Incomes or losses from the change in the reasonable value of the residual value of the leased reasonable asset are associated with the lessee; The lessee is able to continue leasing the asset after the lease contract expires at a rent lower than market rents. The lease of assets being the land use right will be usually classified as operating lease. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. This account is used by the lessee to record the value of the finance lease assets. These assets do not belong to the enterprise but the enterprise has a legal obligation and responsibility to keep, manage and use them in the same way as the company's own assets. Historical cost of finance lease assets is recorded as the fair value of the leased assets or present value of the minimum lease payment when the reasonable value is higher than the present value of the minimum lease payment and initial direct costs created involving in finance lease activities.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC When calculate the present value of minimum lease payment, the company may use the implicit interest rate, the interest rate noted in the lease contract or marginal interest rate from borrowing of the lessee. Historical cost of finance lease assets does not include the VAT that the lessor paid when purchasing fixed assets to let others lease This amount of tax the lessee must return to the lessor, including when finance lease assets used in production of goods and services subject to subtraction method VAT and in direct method, or not subject to VAT . 2. This account is not used to record the value of fixed assets under operating leases. 3. Periodically, the lessee has responsibility to determine the depreciation of the assets and charge into production and business expenses on the consistent basis of depreciation policy among similar assets of the company. If the lessee are not certain on possession of lease assets when the leas contract is over, the assets lease shall be depreciated over lease period if the lease period is shorter than useful life of the lease period assets. lessee 4. Periodically, upon receiving the invoice the lessee must pay the VAT amount to the lessor and record as follows: Finance lease used for production, business activities of goods, services subject to subtraction activities method VAT, the amount of VAT in each period is recorded into account 133 "VAT deductible" 1332 ; Finance lease used for production, business activities of goods, services subject to VAT in direct method, the amount of VAT in each period is recorded into business expenses in the period period.

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details 5. Account 212 is recorded in details for each leased fixed assets. STRUCTURE AND CONTENTS OF ACCOUNT 212 - FINANCE LEASE ASSETS Debit: Increase of historical cost for finance lease assets. Credit: Decrease of historical cost of finance lease assets due to the asset being returned to the lessor when the lease contract is over or the asset is purchased. Debit balance: Historical cost of current financial leased assets.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC MAJOR TRANSACTIONS 1. Record of initial direct costs involving in finance lease assets before receiving the assets such as negotiation, signing contract expenses: Dr. 142 Prepayment expenses Cr. 111, 112,... 2. Record of payment in advance for or deposit to guarantee the leases: Dr. 342 Long term borrowings prepaid amount - if any Dr. 244 - Long term deposits Cr. 111, 112,... 3. When the amount payable of finance lease is determined at the price excluding VAT that the lessor paid when purchasing fixed assets. 3.1. When receiving finance lease assets, based on the lease contract and related documents the accountant records value of finance lease assets using the price excluding VAT input: assets Dr. 212 - Financial leased assets price excluding VAT Cr. 342 - Long term borrowings present value of the leased assets or current value of the minimum lease payment minus - the payable in the period Cr. 315 - Current portion of long term loan payable in the period 3.2. Record of initial direct costs involving in finance lease activities into historical cost of finance lease assets: Dr. 212 - Financial leased assets Cr. 142 - Short-term prepaid costs, or Cr. 111, 112,... direct costs involving in lease activities created when receiving lease assets 3.3. At the end of the accounting period, based on the lease contract, the accountant determines the current portion of long term loans in coming period: Dr. 342 - Long term borrowings Cr. 315 - Current portion of long term loan 3.4. Periodically, receipt of the lease bill: 3.4.1 When the finance lease asset is used in production, business activities of goods and services subject to subtraction method VAT: Record of payment of principle amount, interest expenses and VAT to the lesse: Dr. 635 Financial expenses interest expenses in this period Dr. 315 - Current portion of long term loan principle amount paid in this period Dr. 133 VAT deductible 1332 Cr. 111, 112,...

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC When receiving the invoice but the company does not pay immediately, based on the invoice the accountant record interest payable and the VAT amount into account 315 - Current portion of long term loan: Dr. 635 - Financial expenses Interest expenses Dr. 133 - VAT deductible 1332 Cr. 315 - Current portion of long term loan 3.4.2 When finance lease assets used in production of goods and services not subject to VAT or subject to VAT in direct method: Record of payment of principle amount, interest expenses and VAT to the lessor: Dr. 635 - Financial expenses Interest expenses paid in this period Dr. 315 - Current portion of long term loan Principle amount paid in this period Dr. 623, 627, 641, 642 VAT paid this period Cr. 111, 112,... When receiving the invoice but the company does not immediately pay, based on invoice the accountant records interest payable and VAT payable into account 315 "Current portion of long term loan": Dr. 635 - Financial costs Interest expenses payable in this period Dr. 623, 627, 641, 642 VAT payable in the period Cr. 315 - Current portion of long term loan determined 4. When the amount payable of finance lease is determined at the price including VAT that the lessor paid when purchasing fixed assets: assets, 4.1. When receiving finance lease assets, the lessee also bears VAT amount that the lessor paid when purchasing the assets. Based on the lease contract and related documents, the excluding accountant records value of assets using price excluding VAT that must be returned to the lessor: Dr. 212 - Finance leased assets price not include VAT Dr. 138 Other receivables VAT input of finance lease assets Cr. 315 - Current portion of long term loan Payable in this period including VAT Cr. 342 Long term borrowings Present value of minimum lease payment or reasonable value of leased assets minus - payables in this period plus + VAT amount that lessee must pay within the lease period 4.2. Record of direct initial costs into historical cost of finance lease assets: Dr. 212 - Financial leased assets Cr. 142 - Short-term prepayment Cr. 111, 112,... direct expenses created involving in finance lease activities when receiving the assets 4.3. At the end of the accounting period, based on the lease contract, the accountant determines the current portion of long term loans in coming period: Dr. 342 Long term borrowings Cr. 315 - Current portion of long term loan
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4.4. Periodically, record of the lease payment: Record payment of principle amount and interest expenses to the lessor: Dr. 635 Financial expenses Interest expenses paid in the current period Dr. 315 - Current portion of long term loan principle amount paid in the current period including VAT Cr. 111, 112,... Based on the invoice, record the VAT payable to the lessor in the period: When finance lease assets is used in production of goods and services subject to subtraction method VAT: Dr. 133 - VAT deductible 1332 Cr. 138 - Other receivables When finance lease assets is used in production of goods and services subject to VAT in production direct method or not subject to VAT: Dr. 623, 627, 641, 642,... Cr. 138 - Other receivables When receiving invoice but the company does not pay immediately, based on the invoice the company records the interest payable in the current period to account 315 Current portion of long term loan : Dr. 635 - Financial expenses Cr. 315 - Current portion of long term loan Interest payable in the period Simultaneously, based on the invoice, the company records the VAT returned to the lessee in return the period. The accounting entries are similar to record of payment when receiving the invoice.

5. Record payment of commitment fee in using capital to the lessor: Dr. 635 - Financial expenses Cr. 111, 112,... 6. When returned the assets to the lessor as agreed in the lease contract, the accountant reduces the value of assets: Dr. 214 - Accumulated depreciation and amortization 2142 Cr. 212 - Finance leased assets 7. The lease contract regulates that the leesee only leases a part of the value of the assets, then purchases those assets. When received the transfer of the own right of assets, the accountant records a decrease in the finance lease assets and and increases in the tangible assets owned by the company. When change from finance lease assets to assets owned by the company: Dr. 211 - Tangible assets
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 212 Finance leased assets net book value of finance lease assets Cr. 111, 112,... Additional payable amount Simultaneously transfer the depreciation value: Dr. 2142 Amortization of finance lease assets Cr. 2141 - Accumulated depreciation of fixed assets 8. Accounting for the sale and lease back under the finance lease assets: 8.1. Record of the sale and lease back with the price higher than the net book value of the assets: Accounting for the sale is referred to item 7.3 - Account 711. Accounting entries for recognition of leased ass assets and payables for financial lease, and periodical payment are similar to item 3 & 4 of account 212. Periodically, the accountant determines depreciation amount and charge to production and depreciation business expenses: Dr. 623, 627, 641, 642,... Cr. 2142 - Accumulated depreciation and amortization of finance leased assets. Periodically, the accountant transfers difference between the sale price and the net book value of fixed assets sold and leased back, and reduces the production, business expenses in the period following lease period: Dr. 3387 - Deferred income Cr. 623, 627, 641, 642,... lower 8.2. Record of the sale, lease back with lower price than net book value of assets: Accounting for the sale is referred to item 7.2 - Account 711. ass Accounting entries for recognition of leased assets and payables for financial lease, and periodical payment are similar to item 3 & 4 of account 212. differe Periodically, the accountant transfers the difference between lower loss the sale price and the net book value of fixed assets sold and leased back, and records an increase in production, business expenses in the period: Dr. 623, 627, 641, 642,... Cr. 242 - Long term prepaid expenses

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 213 INTANGIBLE ASSETS This account reflects the current value and the increases, decreases in intangible assets of a company. Intangible assets mean assets which have no physical form but the value of which can be determined and which are held and used by the enterprises in their production, business, service provision or leased to other subjects in conformity with the recognition criteria of intangible assets. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS the 1. Historical cost means all costs incurred by the enterprises to acquire intangible assets as of the time of putting these assets into use as expected. The historical cost of a separately-purchased intangible fixed asset consists of the buying intangible price minus - trade discounts or price reductions , taxes excl excluding reimbursed tax amounts and expenses directly related to the putting of the asset into use as planned; the Where a procured intangible asset is paid by deferred payment mode, its historical cost shall be shown at the purchasing price which should have been promptly paid at the time of amount purchase. The Difference between the total amount payable and the promptly-paid purchase price shall be accounted into the production and business expense according to the payment period, except where such difference is included in the historical cost of the intangible asset capitalization under the regulations of the accounting standard Costs of borrowing ; exchange If an intangible asset is formed from the exchange involving payment accompanied with vouchers related to the capital ownership of the establishment, its historical cost is the reasonable value of vouchers issued in relation to capital ownership; The historical cost of an intangible asset for a definite term is the right to use land when the receiving land is allocated or the payment made when receiving the land use right lawfully transferred from other persons, or the land use right value contributed to joint-venture capital; The historical cost of an intangible assets for indefinite term is the payment made when receiving the land use right lawfully transferred from other entities including payment made to individuals, organisations who transferred the right, compensation for land clearance, ground preparation, registration fee, etc. . The historical cost of intangible assets allocated by the State or presented, donated is determined according to the initial reasonable value plus + the expenses directly related to the putting of the assets into use as planned.

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2. Actual costs incurred related to development stage are recorded into production, business expenses in the period. Intangible assets created in development stage satisfied recognition criteria of intangible assets regulated in Vietnamese Accounting Standard 4 Intangible assets , are recorded into account 241 "Construction in progress" 2412 . When finishing development stage, expenses attributable to historical cost of intangible assets in development stage must be debited to account 213 Intangible assets".

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 3. Depreciation shall start from the time the intangible fixed asset is put into use. Depreciation shall be allocated into production, business expenses in the period as regulation of accounting standard of intangible assets. In the case of fixed assets is land use rights, depreciation shall be calculated for land use right for a definite term. 4. Costs related to intangible assets, which are incurred after initial recognition, must be recognized as production and business expenses in the period. If they meet simultaneously the two following conditions, they shall be included into the historical costs of intangible assets: 5. These costs can help intangible assets generate more future economic benefits than the original operation evaluation; nd 6. These costs are appraised in a certain way and associated with a specific intangible asset. 7. Those costs incurred to generate future economic benefits for the enterprises, including enterprise establishment cost, personnel-training cost and advertising cost incurred before the cost newly-set up enterprises start to operate, costs for the research stage, relocation cost, shall be recognized as production and business expenses in the period or gradually allocated into production and business expenses in the maximum period of three years. 8. Costs related to intangible assets, which have been recognized by the enterprises as costs of determining the business operation results in the previous period, shall not be re-recognized the as part of the historical cost of intangible assets. 9. Trademark, distribution right, customers name list and items of similar nature created internally are not recorded as intangible assets. 10. Intangible assets are kept and recorded in details in the Fixed assets register . STRUCTURE AND CONTENTS OF ACCOUNT 213 - INTANGIBLE ASSETS Debit: t Historical cost of increased intangible assets. Credit: Historical cost of decreased intangible assets. Debit balance: Historical cost of current intangible assets of the company. Account 213 - Intangible assets compose seven sub- accounts: Account 2131 - Land use rights: to record the value of intangible assets constituted actual costs that have been paid directly involving in the land use including money to have the land use rights, compensations for land clearance, ground preparation in the case of land use right separated from stage of building construction and architectural objects on land , registration fee if any . This account does not record expenses for constructions on the land.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC When the company receives land from the State without fee, the annual fee is recorded into expenses. In this case, the land use right is not considered as intangible assets. Therefore, it is not recorded into account 2131. Account 2132 – Trademark and distribution rights: to record the value of intangible assets including all actual costs that the company paid to have the trademark and distribution rights. Account 2133- Copy rights, patents: to record the value of intangible assets including all actual costs that the company paid to have copy rights, patents. Account 2134 - Brand names: to record the value of intangible assets including actual costs directly involving in purchasing brand names. Account 2135 - Computer software: to record the value of intangible assets including all actual costs that the company paid to have computer software. Account 2136 - Licenses and franchises: to record the value of intangible assets including all actual costs that the company paid to have the licenses or franchises, such as registration certificates, exploration licence, manufacturing of new products, etc. Account 2138 - Other intangible assets: to record value of other intangible assets that have not been recorded above.

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MAJOR TRANSACTIONS 1. Accounting for purchasing intangible assets: Purchasing intangible assets used in production of goods and services subject to Subtraction assets method VAT: Dr. 213 - Intangible assets Price excluding VAT Dr. 133 - VAT deductible 1332 k Cr. 112 - Cash in bank Cr. 141 - Advances to suppliers Cr. 331 - Trade payables Purchasing intangible assets used in producti of goods and services not subject to VAT: production Dr. 213 - Intangible assets Total amount Cr. 112, 331,... Total amount 2. Purchasing intangible assets in deferred, instalment method: Purchasing intangible assets for production of goods and services subject to subtraction method VAT: Dr. 213 - Intangible assets Historical cost- At sight price excluding VAT Dr. 242 - Long term prepaid expenses Deferred, instalment interest equals Difference between total payment minus - at sight price and VAT input if any Dr. 133 - VAT deductible 1332 Cr. 331 - Trade payables Total amount

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Purchasing intangible assets used in production of goods and services not subject to VAT or subject to VAT in direct method: Dr. 213 - Intangible assets Historical cost- At sight price including VAT Dr. 242 - Long term prepaid expenses The interest of deferred, instalment payment equals total amount minus - at sight price Cr. 331 - Trade payables Total amount Periodically, record the payable interest of purchasing intangible assets in deferred, instalment method: Dr. 635 - Financial expenses Cr. 242 - Long term prepaid expenses When make payment to the seller: Dr. 331 - Trade payables Cr. 111, 112,... 3. Intangible assets purchased by exchange 3.1. Exchange of similar intangible assets: When receive an intangible assets and use in production, business activities at once: Dr. 213 - Intangible assets Historical cost of received intangible assets recorded based on received the net book value of exchanged fixed assets Dr. 214 - Accumulated depreciation and amortization 2143 Depreciated amount of amortization exchanged fixed assets Cr. 213 - Intangible assets Historical cost of exchanged intangible assets 3.2. Exchange of dissimilar intangible assets: Reduce the exchanged intangible assets: nd Dr. 214 - Accumulated depreciation and amortization Depreciated amount Dr. 811 - Other expenses The net book value of exchanged fixed assets Cr. 213 - Intangible assets Historical cost Simultaneously record the income from the exchange of fixed assets: Dr. 131- Accounts receivable Total amount Cr. 711 - Other income Reasonable value of exchanged fixed assets Cr. 3331 VAT 33311 if any Increase the received intangible assets: Dr. 213 - Intangible assets Fair value of received fixed assets Dr. 133 - VAT deductible 1332 if any Cr. 131 - Accounts receivable Total amount 4. Value of intangible assets formed from within the enterprises in development stage:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 4.1. When expenses incurred in development stage do not satisfy recognition criteria of intangible assets, the accountant records those expenses into production, business expenses in the period or into long term prepaid expenses: Dr. 242 - Long term prepaid expenses if the value is high or Dr. 642 - General and administration expenses Cr. 111, 112, 152, 153, 331,... 4.2. When determine the expenses incurred in development stage satisfied recognition criteria of intangible assets: a. Record actual expenses created in development stage to form historical cost of intangible assets: Dr. 241 - Construction in progress Dr. 133 - VAT deductible 1332 - if any Cr. 111, 112, 152, 153, 331,... accountant b. When development stage is finished, the accountant must determine the total actual expenses created to form historical cost of intangible assets: Dr. 213 - Intangible assets Cr. 241 - Construction in progress. 5. When purchase of intangible assets as land use rights and buildings, architectural objects on land, the accountant must determine separately the value of land use rights and of buildings, architectural objects on land as intangible and tangible assets, respectively: Dr. 211 - Tangible assets Historical cost of buildings and architectural objects Dr. 213 - Intangible assets Historical cost of land use rights Dr. 133 - VAT deductible 1332 - if any Cr. 111, 112, 331,... exchange 6. If an intangible asset is formed from the exchange involving payment accompanied with vouchers related to the capital ownership of the establishment, its historical cost is the reasonable value of vouchers issued in relation to capital ownership: Dr. 213 - Intangible assets Cr. 411 - Contributed capital 4111, 4112 7. When the company is donated, presented of sponsored intangible assets and put into use for production, business activities: When receive intangible assets as presents, donations: Dr. 213 - Intangible assets Cr. 711 - Other income Expenses created involving in intangible assets from sponsorship, present and donation: Dr. 213 - Intangible assets Cr. 111, 112,...
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 8. When the company receives shares in joint ventures by land use rights, based on the document of transfer land use rights: Dr. 213 - Intangible assets Cr. 411 - Contributed capital 4111 9. When there is a decision of change the use purpose of investment property as land use rights to intangible assets: Dr. 213 - Intangible assets 2131 Cr. 217 - Investment property Simultaneously transfer the accumulated depreciation of investment property to accumulated depreciation of intangible assets: Dr. 2147 - Amortization of investment property Cr. 2143 - Amortization of intangible assets 10. When invest in associates in the form of contribution by intangible assets, based on the revaluation price of intangible assets between the company and the associate. between 10.1. When the intangible assets represented as contribution whose revaluation price is lower contribution than its net book value: Dr. 223 - Investment in associates Dr. 214 - Accumulated depreciation and amortization 2143 depreciation Dr. 811 - Other expenses Difference between the revaluation price lower than the net book the value of intangible assets Cr. 213 - Intangible assets contribution 10.2. When the intangible assets represented as contribution whose revaluation price is greater than its net book value: Dr. 223 - Investment in associates Dr. 214 - Accumulated depreciation and amortization 2143 depreciation Cr. 213 - Intangible assets Cr. 711 - Other income difference between the revalued price and the net book value of intangible assets . 11. Contributed by intangible assets to jointly control entity 11.1. When the intangible assets represented as contribution whose revaluation price is lower than its net book value: Dr. 222 - Shares in joint ventures The value agreed by the venturers Dr. 214 - Accumulated depreciation and amortization 2143 Dr. 811 - Other expenses Difference between the lower revalued price and the net book value of intangible assets Cr. 213 - Intangible assets Historical cost 11.2. When the intangible assets represented as contribution is lower than the net book value, the difference between the revaluation price and the net book value equivalent to the benefit of other parties in the venture is recorded into account 711 Other income . The difference
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC equivalent to the benefit of the company in the venture is recorded into account 3387 Deferred income : Dr. 222 - Shares in joint ventures The value agreed by the venture parties Dr. 214 - Accumulated depreciation and amortization 2143 depreciated amount Cr. 213 - Intangible assets Historical cost Cr. 711 - Other income Difference between the higher revalued price and the net book value of fixed assets equivalent to benefit of other ventures in the venture Cr. 3387 - Deferred income Difference between the higher revalued price and the net book value of fixed assets equivalent to the benefit of the company in the venture is deferred Periodically, based on the useful life of the fixed assets that the jointly control entity uses, the accountant allocates the deferred income into other income in the period: difference Dr. 3387 - Deferred income details of difference due to revaluation of fixed assets contributed to jointly control entity Cr. 711 - Other income. intangible 12. Accounting for the sale and liquidation of intangible assets is similar to accounting for the sale and liquidation of tangible assets See regulations of account 211 .

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 214 ACCUMULATED DEPRECIATION AND AMORTIZATION This account reflects the increases and decreases in depreciation value and accumulated depreciation value of fixed assets and investment property while they are in use and other increases, decreases in fixed assets, investment property. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. In principle, all the current fixed assets, investment property of the company involving in production, business activities consist of unused assets, disused assets, assets waiting for disposal must be depreciated according to current regulations. Depreciation and amortization of fixed assets and investment property used in production, business activities is recorded into production, business expenses in the period. Amortization of unused, disused and fixed assets waiting for disposal is recorded into other expenses. In disposal some special cases, fixed assets are not depreciated such as spare fixed assets, fixed assets used for social purpose, etc. , the company must follow the current financial policy. For fixed assets used in State activities, funded projects or social welfare activities, the company does not have to charge the depreciation to expenses account. The company should only calculate expenses the accumulated depreciation and amortization. 2. Based on the current financial management policy and accounting standards and based on management requirement of the company, one of three depreciation methods suitable for each fixed assets and investment property must be chosen in order to encourage the development chosen of the business and to ensure the quick and adequate capital recovery which is suitable to the adequate company. Amortization method for each fixed assets and investment property must be used consistently investment and may be changed when there are significant changes in the method of obtaining the economic benefit of fixed assets and investment property. 3. It is necessary to review the useful life and method of depreciation of fixed assets at the end of a fiscal year. If the estimated useful life of assets is much different from the previous estimates, the useful life must be changed correspondingly. The method of depreciation of fixed assets is changed when there are significant changes in the method of estimates of obtaining the economic benefit fixed assets. In this case, the depreciation expenses for the current year and following years must be adjusted and disclose in the financial statements. 4. Fixed assets which are fully depreciated capital fully recovered but still used for production, business activities will no longer be depreciated. If fixed assets are not fully depreciated capital not fully recovered but are damaged and need to be disposed of, the reason must be verified and responsibility of group and individuals must be identified to compensate. The remaining value of fixed assets which are not fully recovered should be compensated by the receipts from disposals of those fixed assets. The compensation amount should be decided by the management of the company. If the receipt from disposal of fixed assets is not enough to recover the net book value, the difference will be considered as loss on disposal of fixed assets. This loss is recorded as other
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC expenses. Especially for state owned enterprises, this issue will be resolved in accordance with the Government s current financial management regulations. 5. Amortisation of intangible assets depends on the useful life of every intangible assets from the date first put into use based on contracts, commitments or usage . For land use right, the useful life is determined as the term of using the land. In the case of undetermined useful life of land use right, no depreciation have to be calculated. 6. For finance lease assets, in the rental period, the leasee must charge the depreciation to production, business expenses to recover the capital. 7. For investment property, in the period of holding the assets for sale or in operating lease, the depreciation of investment property must be charged to production, business expenses. The company may based on similar fixed assets that the reporting enterprise use fixed assets to estimate the useful life and the method of depreciation of investment property. STRUCTURE AND CONTENTS OF DEPRECIATION AND AMORTIZATION Debit: Decrease in accumulated depreciation of investment property and fixed assets due to disposals, sales and transfer to another company or contribute to joint ventures, etc. Credit: assets Increase in accumulated depreciation of fixed assets and investment property due to depreciating fixed assets and investment property. Debit balance: assets The current accumulated depreciation of fixed assets and investment property of the company. amortization, Account 214 - Accumulated depreciation and amortization, compose four sub-accounts: Account 2141 - Accumulated depreciation on fixed assets: to record depreciation of tangible assets and other increases, decreases of tangible assets. Account 2142 - Accumulated depreciation and amortization: to record depreciation of finance lease assets and other increases, decreases of finance lease assets. Account 2143 - Amortization of intangible assets: to record amortisation of intangible assets and other Increases, Decreases of intangible assets. Account 2147 – Amortization of investment property: to record amortization of investment property held for sales or for operating lease. ACCOUNT 214 ACCUMULATED

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MAJOR TRANSACTIONS 1. A charge depreciation of fixed assets into operation and production cost and other expenses must be made periodically:
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Dr. 623 - Machine costs 6234 Dr. 627 - Factory overhead costs 6274 Dr. 641 - Selling expenses Dr. 642 - General and administration expenses Dr. 811 - Other expenses Cr. 214 - Accumulated depreciation and amortization appropriate sub-accounts 2. Receipt of fixed assets which are transferred within a General Corporation or a company: Dr. 211 Tangible assets Historical cost Cr. 411 - Contributed capital The net book value Cr. 214 - Accumulated depreciation and amortization 2141 Depreciation value 3. A charge amortisation of investment property held for sales or for operating lease must be made periodically: Dr. 632 Cost of goods sold Details in expenses for investment property depreciation Cr. 214 - Accumulated depreciation and amortization 2147 investment 4. In the case of decreasing fixed assets and investment property, as well as recording the reduction of the historical cost of fixed assets, the decrease of depreciation of fixed assets and investment property should be recorded. See regulations of accounts 211, 213, 217 . 5. For fixed assets used in State activities or funded projects, the depreciation is made at the end of the fiscal year: Dr. 466 - Sources for acquisition of fixed assets Cr. 214 - Accumulated depreciation and amortization 6. Fixed assets used in cultural, welfare activities, the depreciation is made at the end of the fiscal year: Dr. 4313 - Welfare funds to make fixed assets Cr. 214 - Accumulated depreciation and amortization s 7. At the end of the fiscal year, the company should review the useful life and method of deprecia depreciation of fixed assets. If the depreciation is changed, the accounting book should be adjusted as follows: If the depreciation of fixed assets increases higher than the charge in the year due to the changes of useful life and method of depreciation, the difference is recorded as follows: Dr. 623, 627, 641, 642 Difference between increased amount Cr. 214 - Accumulated depreciation and amortization appropriate sub-account If the depreciation of fixed assets decreases lower than the charge in the year due to the changes of useful life and method of depreciation, the difference is recorded as follows: Dr. 214 - Accumulated depreciation and amortization appropriate sub-account Cr. 623, 627, 641, 642 difference between decreased amount

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 217 INVESTMENT PROPERTY This account reflects the current value and increases, decreases in investment property of the company using historical cost. Investment property is property being land-use rights or a building - or part of a building - or both, infrastructure held by the owner or by the lessee under a finance lease to earn rentals or for capital appreciation or both, rather than for: a. use in the production or supply of goods or services or for administrative purposes; or b. sale in the ordinary course of business. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. This account reflects value of fixed assets that satisfy recognition criteria of investment property. This account is not used to record property held for sale in the ordinary course of business or in the process of construction or development for such sale in the near future, development fixed assets used by the owner, fixed assets in the progress to use in the future as investment property. Investment property should be recognized as an asset when the following conditions are met: a. it is probable that the future economic benefits associated with the investment property will flow to the enterprise; and b. the cost of the investment property can be measured reliably. 2. Investment property is recorded into this account at its cost. Cost is the amount of cash or cash equivalents paid or the fair value of other consideration given to acquire an asset at the time of its acquisition or construction. a. Depend on each cases, the cost of the investment property is calculated as follows: investment The cost of a purchased investment property comprises its purchase price and any directly attributable expenditure. Directly attributable expenditure includes, for example, professional fees for legal services, property transfer taxes and other transaction cost. If payment for an investment property is deferred, its cost is the cash price equivalent. The difference between this amount and the total payments is recognized as interest expense over the period of credit, except when the difference is charged to cost of investment property in accordance with VAS 16 Borrowing Costs ; The cost of a self-constructed investment property is the actual costs and other directly attributable expenditure at the date when the construction or development is complete. If the finance lease assets held to be leased out for operating leases meet the recognition criteria of investment property, the historical cost of the investment property shall be recorded in compliance with VAS 6 Leases when leases start.

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b. The cost of an investment property is not increased by:
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start-up costs unless they are necessary to bring the property to its working condition ; initial operating losses incurred before the investment property achieves the planned level of occupancy; abnormal amounts of wasted material, labour or other resources incurred in constructing or developing the property.

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3. Subsequent expenditure relating to an investment property must be recorded as production, business expenses in the period except for when it is probable that future economic benefits, in excess of the originally assessed standard of performance of the existing investment property, will flow to the enterprise. 4. During the time of holding property for capital appreciation or for rentals, the depreciation must be charged for investment property. Depreciation of investment property is recorded Depreciation into production, business expenses in the period. The company may based on similar fixed assets that the company is using to determine the useful life and depreciation method of investment property, 5. For purchased investment property must be constructed, repaired, upgraded before use, the constructed, expenses arising from purchase, construction or development of investment property or for repairs, maintenance or enhancements are recorded into account 241 Construction in progress . When the construction and development finishes, the cost of investment property is determined to transfer into account 217 Investment property . 6. Transfers to, or from, investment property should be made when, and only when, there is a should change in use, evidenced by: a. commencement of owner-occupation, for a transfer from investment property to ownertransfer occupied property; b. commencement of development with a view to sale, for a transfer from investment property to inventories; c. end of owner-occupation, for a transfer from owner-occupied property to investment property; d. commencement of an operating lease to another party, for a transfer from inventories to investment property; or e. end of construction or development, for a transfer from property in the course of construction or development regulated in VAS 3 Tangible assets to investment property. Transferring from or to the investment property and owner occupied property or inventories does not change the book value of transferred assets and the historical cost of assets in determining its value or for preparation of the financial statements. 7. When a company sells an investment property without repair and maintenance, the company shall not transfer it to inventory account but retain the assets into account 217 "Investment property" until that assets are sold.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 8. Income from sale of investment property is recorded as total price price excluding VAT when the company paying VAT in subtraction method . If sale of an investment property in deferred payment method, the consideration received is recognised initially at the cash price equivalent. The difference between the nominal amount of the consideration and the cash price equivalent is recognized as deferred interest income in VAS 14 Revenue and other income . 9. Decrease in investment property occurred in followings cases: Transfer to and from inventories and owner-occupied property; Sale of investment property; Disposal of investment property; Return property to the lessor at the end of the lease period. investment

10. Investment property is recorded in details by each investment property in property register similar to fixed assets.

STRUCTURE AND CONTENTS OF ACCOUNT 217 – INVESTMENT PROPERTY ACCOUNT Debit: Historical cost of increased investment property in the period. Credit: Historical cost of decreased investment property in the period. Debit balance: Historical cost of current investment property. MAJOR TRANSACTIONS 1. Purchase of investment property in at sight payment method: The company paying VAT in subtraction method: Dr. 217 - Investment property Dr. 133 - VAT deductible 1332 Cr. 111, 112, 331,... The company paying VAT in direct method: Dr. 217 - Investment property Cr. 111, 112, 331,... 2. Purchase of investment property in deferred payment method: 2.1. The company paying VAT in subtraction method:
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Dr. 217 - Investment property Historical cost - at sight price excluding VAT Dr. 242 - Long term prepaid expenses Interest of deferred payment equals total payment minus - at sight price and input VAT Dr. 133 - VAT deductible 1332 Cr. 331 - Trade payables 2.2. The company paying VAT in direct method: Dr. 217 - Investment property Historical cost - at sight price including VAT Dr. 242 - Long term prepaid expenses Interest of deferred payment equals total payment minus - at sight price including VAT Cr. 331 - Trade payables 2.3. Periodically, calculate and allocate the interest payable of purchasing investment property in deferred method: Dr. 635 - Financial expenses Cr. 242 - Long term prepaid expenses 2.4. Record the payment to the seller: Dr. 331 - Trade payables Cr. 515 - Financial income discount from making payment before the credit limit Cr. 111, 112, 3. Investment property when construction was completed: 3.1. When it is created the investment property expenses, based on the related documents, the accountant records expenses into account 241 Construction in progress Similar to construction of tangible assets, see account 211 Tangible assets . 3.2. When finishing construction and transfer it to investment property, the accountant based on the transfer document to record: Dr. 217 - Investment property Cr. 241 - Construction in progress 4. When changing from owner occupation to investment property, based on documents of change the use purpose: Dr. 217 - Investment property Cr. 211 - Tangible assets, or Cr. 213 - Intangible assets

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Simultaneously transfer the accumulated amortization: Dr. 2141, or 2143 Cr. 2147 - Amortization of investment property 5. Transfer the stock-balance to investment property, based on the document of transfer the use purpose: Dr. 217 - Investment property Cr. 156 - Merchandise goods 1567 - Property/real estate 6. When finance lease asset held to be leased out under one or more operating leases meets the recognition criteria of investment property, based on the finance lease contract and relating documents, the leasee records as follows: Dr. 217 - Investment property Cr. 111, 112, 315, 342 leasor The accountant records the payment to leasor when receiving invoice followed the regulations of account 212 Finance lease assets . 7. If subsequent expenditure created after initial recognition of investment property satisfies company conditions for capitalization or includes the company s obligations to incur expenditure that bring condition, is necessary in the future to bring the asset to its working condition, it is added to net book value of investment property: recognition 7.1. Actual expenses created after the initial recognition repair & maintenance or enhancement of investment property : Dr. 241 - Construction in progress Dr. 133 - VAT deductible 1332 Cr. 111, 112, 152, 331,... enhancement 7.2. When finished repair & maintenance or enhancement of the asset, the company transfers and increases the historical cost of investment property: Dr. 217 - Investment property Cr. 241 - Construction in progress 8. At the end of the finance lease period: 8.1. If return the finance lease assets classified as investment property: Dr. 2147 - Amortization of investment property Dr. 632 - Cost of goods sold difference between the historical cost of finance lease assets and accumulated depreciation amount Cr. 217 - Investment property historical cost 8.2. When repurchase of the finance lease assets classified as investment property for further investment, the accountant records the additional charge to the historical cost investment property: Dr. 217 - Investment property
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 111, 112, 8.3. When repurchase of the finance lease assets classified as investment property for production of goods and services or management activities of the company, the accountant reclassifies the assets to owner-occupied property: Dr. 211 - Tangible assets, or Dr. 213 - Intangible assets Cr. 217 - Investment property Cr. 111, 112 additional amount Simultaneously transfer the accumulated amortization: Dr. 2147 - Amortization of investment property Cr. 2141 or 2143 9. Accounting for the sale, disposal of investment property 9.1. Record the sale, disposal of investment property: The company paying VAT in subtraction method: Dr. 111, 112, 131 Total amount Cr. 511 Sales 5117 - Sale of investment property price excluding VAT Cr. 3331 VAT payables 33311 The company paying VAT in direct method: Dr. 111, 112, 131 total amount Cr. 511 Sales 5117 - Sale of investment property total amount 9.2. Reduce the historical cost and the net book value of investment property that have been sold or disposed of: Dr. 214 - Accumulated depreciation and amortiz amortization 2147 - Amortization of investment property Dr. 632 - Cost of goods sold net book value of investment property Cr. 217 - Investment property historical cost of investment property 10. Accounting for investment property transferred to inventories or to owner occupied property: 10.1. When transfer from investment property to inventories, the owner decides to repair, upgrade for sale: When there is decision of repair, upgrade investment property for sale, the accountant transfers the net book value of investment property into account 156 Merchandise goods : Dr. 156 - Merchandise goods Account 1567 - net book value Dr. 214 - Accumulated depreciation and amortization 2147 depreciated amount Cr. 217 - Investment property historical cost When expenses incurred from repair, upgrade for sale:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 154 - Work in progress Dr. 133 - VAT deductible If any Cr. 111, 112, 152, 334, 331, When finished the repair and maintenance the property for sale, the company transfers all actual expenses incurred to merchandise goods of fixed assets waiting for sale: Dr. 156 - Merchandise goods 1567 Cr. 154 - Work in progress 10.2. Transfer investment property to owner-occupied fixed assets:

Dr. 211, 213 Cr. 217 - Investment property Simultaneously record: Dr. 2147 - Amortization of investment property Cr. 2141, 2143

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 221 INVESTMENT IN SUBSIDIARIES This account reflects the current value and increases, decreases in investment in subsidiaries. A subsidiary is an enterprise that is controlled by another enterprise known as the parent . Investment in subsidiaries consists of: 1. Shares: Shares are documents or accounting entries or electronic data acknowledged the right and legal benefit of the mother company in its subsidiaries. Shares include common shares and preference shares. The parent company holds common shares of subsidiaries, has the right to attend Share holders Assembly Meeting, has right to dominate and nominate members of the Board of management, has the vote right of important problems of repair, add the Charter of the Company, business strategy, divide profit as regulation in the Charter of the company. The regulation parent company holds equity securities receives dividend based on the result of business receives activities of subsidiary, but the owners of equity securities are also in risk of loss or bankruptcy of subsidiary, as the Charter of the Company and the Law on Bankruptcy. 2. Capital investment as contribution in money, other assets to subsidiary operated under form of State owned company, limited liability company with one member, State Joint Stock Company and other types of company. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Account 221 "Investment in subsidiaries" is only recorded investment when the investor holds more than 50 % owner s equity more than 50% vote right and has the right to control financial policies and business activities of the company in order to obtain economic benefits company from that company. When the investor loses the right to control the company, the investor shall reduce the investment in subsidiaries. 2. The investment of the investor held less than 50% owner s equity less than 50% vote right in an entity are still recorded into account 221 "Investment in subsidiaries" when it obtains: a. Power over more than 50% of the voting rights of the other entity by virtue of an agreement with other investors; or b. Power to govern the financial and operating policies of the other entity under a statute or an agreement; or c. Power to appoint or remove the majority of the members of the board of management or equivalent governing body of the other entity; or d. Power to cast the majority of votes at meetings of the board of management or equivalent governing body of the other entity. 3. Investment in subsidiaries must be recorded at cost. Cost means purchase price plus + purchase expenses if any , such as intermediary expenses, transaction expenses, bank fee, taxation, etc. 4. Accounting for transactions created in the progress of business combination of the company considered as the purchaser in the business combination leading to the parent-subsidiary
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC relationship is implemented as the Circular of guidance for applying the Vietnamese Accounting Standard No. 11 "Business combination". 5. The accountant must record in details of investments in each subsidiary in par value, actual price of securities, actual costs of investment in subsidiaries. 6. It is essential to record correctly, timely incomes from subsidiaries distributed dividends and profits of the fiscal year into the separated financial statements of the parent. Distributed dividends and profit from subsidiaries are recorded into financial income of the parent companies. STRUCTURE AND CONTENTS OF ACCOUNT 221 - INVESTMENT IN SUBSIDIARIES Debit: Actual value of increased investment in subsidiaries. Credit: Actual value of decreased investment in subsidiaries. Debit balance: Actual current value of investment in subsidiaries of the parent companies. MAJOR TRANSACTIONS 1. When the parent buys shares or makes investment in subsidiaries in money as committed in investment the agreement of contribution, or purchase the investment in subsidiaries, based on the actual amount of investment in subsidiaries: Dr. 221 - Investment in subsidiaries Cr. 111, 112, 341,... Simultaneously the accountant records in details of each share at its par value If investment in subsidiaries through acquiring shares of the subsidiary . 2. If any expense created in the progress of buyi securities, or investing in subsidiaries: buying Dr. 221 - Investment in subsidiaries Cr. 111, 112,... 3. Transfer investment in associates, joint venture, financial instruments to investment in subsidiaries in order to gain the control: Dr. 221 - Investment in subsidiaries Cr. 222 - Shares in joint ventures Cr. 223 - Investment in associates Cr. 228 - Other long term investments Cr. 121 - Short term investment Cr. 111, 112 additional investment in cash

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 4. When received the acknowledgement of distributed dividend and profit or money from subsidiary: Dr. 111, 112 If received money Dr. 138 - Other receivables 1388 Dr. 221 - Investment in subsidiaries distributed dividend, profit are added to investment in subsidiaries - If any Cr. 515 - Financial income 5. When transfer from investment in subsidiaries into investment in associates, or in jointly control entity, or in financial instruments due to sales a part of investment in subsidiaries leading to lose the control: 5.1. If make profit: Dr. 111, 112 received amount Dr. 222 - Shares in joint ventures Dr. 223 - Investment in associates Dr. 228 - Other long term investments Cr. 221 - Investment in subsidiaries Cr. 515 - Financial income if gained 5.2. If make loss: Dr. 111, 112,... received amount Dr. 222 - Shares in joint ventures Dr. 223 - Investment in associates Dr. 635 - Financial expenses if lost Cr. 221 - Investment in subsidiaries 6. When collect, dispose of or sell the investment in subsidiaries that made loss: investment Dr. 111, 112, 131,... Dr. 635 - Financial expenses for loss investment that can not collected investment Cr. 221 - Investment in subsidiaries 7. When collect, dispose of or sell the investment in subsidiaries that made profit: Dr. 111, 112, 131,... Cr. 221 - Investment in subsidiaries Cr. 515 - Financial income profit 8. Accounting for of cost of business combination of the acquirer in a business combination leading to the parent-subsidiary relationship. On the acquisition date, the acquirer measures and records the cost of a business combination as the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the acquirer, in exchange for control of the acquiree plus + any costs directly attributable to the business combination. Simultaneously the acquirer, the parent, records its shares in the subsidiary as an investment in subsidiaries. If the acquirer paid in cash or cash equivalent for its acquisition in the business combination:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 221 - Investment in subsidiaries Cr. 111, 112, 121,... If the acquirer paid for its acquisition in the business combination by issuing shares whose price fair value at the date of exchange is higher than the par value: Dr. 221 - Investment in subsidiaries the fair value Cr. 4111 - Share capital par value Cr. 4112 - Capital surplus difference between the fair value and par value of shares If the acquirer paid for its acquisition in the business combination by issuing shares whose price fair value at the date of exchange is lower than the par value: Dr. 221 - Investment in subsidiaries fair value Dr. 4112 - Capital surplus difference between the fair value and par value of shares Cr. 4111 - Share capital par value Actual costs incurred from issuing shares: Dr. 4112- Capital surplus Cr. 111, 112,... If the acquirer paid for its acquisition in the business combination by exchanging its assets: When send the exchanged assets, the accountant reduces the exchanged assets: accountant Dr. 811 - Other expenses net book value of tangible assets sent for exchange Dr. 214 - Accumulated depreciation and amortization depreciated amount and Cr. 211 - Tangible assets historical cost investment Simultaneously, increase other income and investment in subsidiaries due to exchange of fixed assets: Dr. 221 - Investment in subsidiaries total amount Cr. 711 - Other income fair value of fixed assets sent for exchange Cr. 3331 VAT payable account 33311 if any When deliver merchandise goods for exchange, the accountant records: Dr. 632 - Cost of goods sold Cr. 155, 156,... Simultaneously record the sales and increase investment in subsidiaries: Dr. 221 - Investment in subsidiaries Cr. 511 - Sales Cr. 333 - Tax and statutory obligations 33311 if any If the acquirer paid for its acquisition in the business combination by issuing bonds: If bonds are issued at par value:

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 221 - Investment in subsidiaries fair value Cr. 343 - Debt securities 3431 par value If bonds are issued with a surplus: Dr. 221 - Investment in subsidiaries fair value Cr. 3431 - Bond cost par value Cr. 3433 - Bond premium the surplus If bonds are issued with discount: Dr. 221 - Investment in subsidiaries fair value Dr. 3432 - Discounted bond discount amount Cr. 3431 - Bond cost par value Expenses directly involves in the business combination such as expenses for legal consulting, combination due diligence, etc., the accountant at the acquirer shall record as follows: Dr. 221 - Investment in subsidiaries Cr. 111, 112, 331,...

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 222 SHARES IN JOINT VENTURES This account reflects all the shares in joint ventures in the establishment of a jointly control entity and the progress of taking back shares in joint ventures when the joint contract is over. A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity which is subject to joint control. Jointly controlled activities referred to herein include Business cooperation contract involvement in the form of jointly controlled operations; Business cooperation contract involvement in the form of jointly controlled assets; Joint venture contract involvement in the establishment of jointly controlled entities.

A jointly control entity is established by the contribution of venture parties. A jointly control operates entity is a business entity newly established, operates independently like a company. However, it venture is controlled by venture parties in the joint venture contract. A jointly control entity must organize current the accounting activity independently as current regulations on accounting just like other responsible companies. The jointly control entity is responsible for control assets, payable loans, income, other income and expenses created in the entity. Each contributors receive the income from the jointly control entity in accordance with agreement of the venture contract. consist Capital contributions to jointly control entity consist of all kinds of property, materials, capital owned by the company, including Long term borrowings for contribution. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Capital contributions to jointly control entity is recorded into account 222 when the investor policies has the jointly control right over financial policies and activities of invested entity. When the en investor loses the control right, the share in the jointly control entity shall be recorded into account of investment in associates. shar 2. The principles and accounting treatment for shares in joint ventures are categorised in three c forms of jointly controlled operations, jointly controlled assets and jointly control entity. The "Finan company must follow regulations in VAS 8 "Financial reporting of interests in joint ventures" Decem Decision No 234/2003/QD-BTC dated 30 December 2003 . Account 222 Shares in joint ventures is used only for companies contributing to jointly control entity but not recording the contribution to the business entity in form of jointly controlled operations and jointly controlled assets. 3. The value of the contribution to the jointly control entity recorded in this account must be agreed by venturers in the capital contribution minute. 4. Contribution to joint venture by materials, goods: If the revalued amount of materials, goods is higher than the book value at the time of contribution, the difference is recorded as follows:

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC The difference between the higher revalued amount of materials, goods contributed and the book value should be recorded into other income in the current period in corresponding to the benefit of others parties in the venture. The difference between the higher revalued amount of materials, goods contributed and the book value should be recorded as deferred income in corresponding to the benefit of the company in the venture. When the jointly control entity sells those materials, goods to the independent third party, the deferred income shall be transferred into other income. If the revalued amount of materials, goods is lower than the book value at the time of contribution, the difference is recorded into other expenses in the current period.

5. Contribution to jointly venture by fixed assets: If the revalued amount of fixed assets is higher than the net book value at the time of contribution, the difference is recorded as follows: The difference between the revalued amount and the net book value of fixed assets should be and recorded into other income in corresponding to the benefit of other venture parties in the venture. The difference between the revalued amount of fixed assets and the net book value fixed assets should be recorded as deferred income in corresponding to the company s benefit in the venture. Annually, this deferred income benefit from revaluation of fixed assets income contributed to the venture shall be allocated to other income based on the useful life of the asset that the jointly control entity uses. If the revalued amount of fixed assets is lower than the net book value at the time of contribution, the difference is recorded into other expenses in the period.

6. When collection of shares in joint ventures, the company reduces the contribution based on the value of materials, assets and money that the jointly control entity returns. The losses due entit to uncollectible of the full contribution are recorded as financial expenses. If the collection recorded generated value is higher than the contribution, the generated income is recorded to financial income. jointl 7. Interest income from contribution to the jointly control entity is recorded as the financial inco income and credited to account 515 Financial income . The income that is shared to venture parties can be paid all in one time or partly in each period or be kept to add to shares in joint ventures if venture parties agreed. Expenses from the venture activities incurred in contributors if any are debited into account 635 Financial expenses . 8. Contributors in the jointly control entity have right to transfer the contribution in the venture. If the transfer value is higher than the contribution to the jointly control entity, the difference is credited into account 515 Financial income . In contrast, if the transfer value is lower than the contribution to the venture, the difference is debited into account 635 Financial expenses . 9. For jointly control entity, when venture parties transfer the contribution to each others, expenses involving in the transfer of venture parties are not recorded in the accounting book of the jointly control entity. The jointly control entity shall record in details of contribution
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC and make procedures to change the owner on the Business License or Investment License. 10. Venture parties or other partners acquires contribution of other venture parties in the venture, the contribution to the venture shall be recorded at actual acquired value The acquired value may be higher or lower than the book value of the transferred contribution at the time of transfer . 11. The accountant must account in details of shares in joint ventures to the jointly control entity in each partner, each instalment and collection as well as transfer. STRUCTURE AND CONTENTS OF ACCOUNT 222 - SHARES IN JOINT VENTURES Debit: ributed Increase of shares in joint ventures contributed to the jointly control entity. Credit: Decrease of shares in joint ventures to jointly control entity due to collection, transfer or no control longer be jointly control. Debit balance: Shares in joint ventures to jointly control entity at the end of the period. MAJOR TRANSACTIONS I. Accounting for contribution in jointly control entity: 1. Record of contribution to jointly control entity in cash: jointly Dr. 222 - Shares in joint ventures Cr. 111, 112,... 2. Record of contribution to jointly control entity by materials, goods in which the joint parties agreed in valuing the materials, goods contributed. 2.1. When the revalued amount is lower than the book value of materials, goods: Dr. 222 - Shares in joint ventures revalued amount Dr. 811 - Other expenses difference between the book value and the revalued amount Cr. 152, 153, 155, 156, 611 book value 2.2. When the revalued amount is higher than the book value of materials, goods: When contribute materials, goods to jointly control entity: Dr. 222 - Shares in joint ventures revalued amount Cr. 152, 153, 155, 156, 611 book value Cr. 3387 - Deferred income difference between the revalued amount and the book value in corresponding to the benefit of the entity in the venture details of difference due to revaluation of materials, merchandise goods contributed to the jointly control entity Cr. 711 - Other income difference between the revalued amount and the book value in
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC corresponding to the benefit of other entities in the venture When the jointly control entity sells the materials, goods to an independent third party, the contributor transfers the deferred income to other income in the period: Dr. 3387 - Deferred income Cr. 711 - Other income 3. Record of contribution to jointly control entity by fixed assets in which the joint parties agreed in revaluing the fixed assets contributed: 3.1. When the revalued amount is lower than the net book value of the fixed assets: Dr. 222 - Shares in joint ventures revalued amount ation Dr. 214 - Accumulated depreciation and amortization Dr. 811 - Other expenses difference between the net book value and the revalued amount of the fixed assets Cr. 211 - Tangible assets historical cost Cr. 213 - Intangible assets historical cost 3.2. When the revalued amount is higher than the net book value of the fixed assets: Dr. 222 - Shares in joint ventures revalued amount Dr. 214 - Accumulated depreciation and amortization depreciation Cr. 3387 - Deferred income difference between the revalued amount and the net book between value in corresponding to the benefit of the entity in the venture Cr. 711 - Other income difference between the revalued amount and the net book value in corresponding to the benefit of other entities in the venture Cr. 211 - Tangible assets historical cost Cr. 213 - Intangible assets historical cost Annually, based on the useful life of fixed assets that the jointly control entity uses, the assets accountant allocates the deferred income into other income in the period: Dr. 3387 - Deferred income details in difference due to revaluation of fixed assets difference contributed Cr. 711 - Other income deferred income allocated in a year When the joint ventures contract is over, or the contributor transfers the shares in joint ventures to another partner, remaining differences resulted from revaluation of the fixed assets contributed are transferred to other incomes: Dr. 3387 - Deferred income details in difference due to revaluation of fixed assets contributed Cr. 711 - Other income 4. A Vietnamese company is authorized by the State to contribute the land used right, sea surface to foreign invested companies. After the State s decision is released and procedures to contribute to the joint venture are finished, the accountant records: Dr. 222 - Shares in joint ventures Cr. 411 - Contributed capital details in the State s contribution
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 5. When the contributor is shared the joint venture profit and uses this profit to add up the contribution in the venture: Dr. 222 - Shares in joint ventures Cr. 515 - Financial income 6. Record of expenses involving in contribution to the joint venture incurred in the period such as interest expenses from borrowings for contribution and other expenses: Dr. 635 - Financial expenses Dr. 133 - VAT deductible If any Cr. 111, 112, 152, 7. Record profit from the shares in the venture in the period: 7.1. When receipt of the acknowledgement of shared profit from jointly control entity: Dr. 138 - Other receivables 1388 Cr. 515 - Financial income 7.2. When receipt of money: Dr. 111, 112 Received amount Cr. 138 - Other receivables 1388 8. Accounting for collection of shares in the jointly control entity when the venture contract is jointly over or the jointly control entity stops working: 8.1. When collect shares in the jointly control entity, based on the reporting minutes of venture jointly parties to record: Dr. 111, 112, 152, 153, 156, 211, 213,... Cr. 222 - Shares in joint ventures th mu 8.2. The contribution that is uncollectible due to the loss of the business must be recorded into financial expenses: Dr. 635 - Financial expenses Cr. 222 - Shares in joint ventures 8.3. If the collection amount is higher than the contribution, the difference is considered as income and recorded into financial income: Dr. 111, 112, 152, 153, 156, 211, 213,... Cr. 515 - Financial income 9. Accounting for the sales of the contribution to the jointly control entity: 9.1. The company sells the shares in the jointly control entity, based on fair value of assets transferred from the acquirer: Dr. 111, 112, 152, 153, 156, 211, 213,... Dr. 635 - Financial expenses difference between fair value of received assets and the shares
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 222 - Shares in joint ventures Cr. 515 - Financial income difference between fair value of received assets and the shares 9.2. A Vietnamese company is authorized by the State to contribute the land used right to the venture. When transfer the shares in the jointly control entity to the foreign venture parties and return the land use right to the State: Dr. 411 - Contributed capital Cr. 222 - Shares in joint ventures If the foreign venture parties pay the Vietnamese partner an amount of money as compensation to the transfer where the jointly control entity leases the land : Dr. 111, 112,... Cr. 515 - Financial income 9.3. In the case, the acquirer is a venture parties in the joint venture, after increase its shares in combine the jointly control entity, the acquirer must combine the shares and based on the vote right to determine whether this contribution is investment in subsidiaries or investment in associates: Dr. 221 - Investment in subsidiaries Dr. 223 - Investment in associates Cr. 111, 112 amount paid to the seller to obtain the shares Cr. 222 - Shares in joint ventures parties 9.4. In the case, the acquirer is the new venture parties in the joint venture, the contribution shall be recorded as shares in joint ventures at the cost basis: Dr. 222 - Shares in joint ventures Cr. 111, 112 amount paid to the seller to obtain the shares Cr. Other related 9.5. In the case, the Vietnamese partner transfers the shares in jointly contro entity to the foreign control partners, then returns the land used right to the State and the land is rented by the venture, the jointly control entity shall reduce land used rights and the contributed capital in corresponding to the land used rights. Retain or increase the capital depends on the coming investment of the owners. The land rent shall not be recorded into owner s equity but into production and business expenses in the correspondent periods. 10. When the venture parties in the venture contributes more to the jointly control entity by assets, the accounting entry is similar to the one for the first contribution. 11. Accounting for transactions between contributor in the venture and the jointly control entity: 11.1. When the contributor sells assets to the jointly control entity:

When sold products, merchandise goods to the jointly control entity and delivered finished goods and merchandises: Dr. 632 - Cost of goods sold Cr. 155 - Finished goods; or Cr. 156 - Merchandise goods.
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Based on the actual price of goods sold to record the sales: Dr. 111, 112, 131,... total amount of finished goods and merchandise sold to jointly control entity Cr. 511 Sales price excluding VAT Cr. 3331 VAT payable VAT amount When sold fixed assets to the jointly control entity, the accountant reduces fixed assets: Dr. 811 - Other expenses net book value Dr. 214 - Accumulated depreciation and amortization accumulated depreciation and amortization Cr. 211, 213 historical cost Simultaneously record other income from sales of fixed assets using the actual price sold to the jointly control entity: Dr. 111, 112, 131,... Cr. 711 - Other income Cr. 333 - Tax and statutory obligations 33311 At the end of an accounting period, if the fixed assets, finished goods, merchandise goods finished the sold to the jointly control entity with profit but in the period the jointly control entity has not yet sold those assets to another independent third party, the venture parties shall defer the income from sales of finished goods and merchandises equivalent to the venture parties merchandises benefit in the venture: Sales of finished goods and merchandises: Dr. 511 Sales deferred income from sale of finished goods, merchandises equivalent to the venture parties benefit in the venture Cr. 3387 - Deferred income Sales of fixed assets: Dr. 711 - Other income deferred income from sale of finished goods, merchandises equivalent to the venture parties benefit in the venture Cr. 3387 - Deferred income In the next accounting period, when the jointly control entity sells finished goods, merchandises to an independent third party, the venture records: Dr. 3387 - Deferred income deferred amount from sale of finished goods, merchandises equivalent to the venture parties benefit in the venture Cr. 511 - Sales For the fixed assets sold, periodically, the venture parties transfers gradually the deferred amount equivalent to the venture parties benefit in the venture to other income based on the useful life of the fixed assets that the jointly control entity uses: Dr. 3387 - Deferred income
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 711 - Other income When the jointly control entity sells assets acquired from the venture parties in the venture to an independent third party, the venture parties record: Dr. 3387 - Deferred income remaining amount of income in corresponding to the benefit of the venture parties in the venture not been transferred to other income Cr. 711 - Other income 11.2. When the venture parties purchases assets from the jointly control entity:

When purchase assets from jointly control entity, based on related invoice and documents, the accounting entries for assets, goods purchased from the jointly control entity are similar to the ones from other suppliers. II. Accounting for jointly control entity A. Basic regulations 1. A joint venture contract in the form of jointly control entity is a venture not setting up a new business entity. Venture parties have the obligations and rights according to regulations in the contract. The activity of the joint venture contract is organized by venture parties with other contract business activities of venture parties. expenses 2. The joint venture contract provides that expenses created independently at each venture parties for the jointly control entity, that venture parties must cover those costs. Common venture expenses if any are shared among venture parties based on regulations in the contract. 3. Venture parties must open accounting books to record and reflect in their financial reports these contents: Assets contributed to the venture and kept under control of the venture parties in the venture; Borrowings; Income from sale of goods or provision of services of the venture; Expenses. 4. All common expenses incurred in the venture parties must be recorded. Based on agreements in the venture contract of common expenses allocation, periodically the venture parties prepare the List of allocation of common expenses confirmed by venture parties and then send to each parties one copy original copy . The List of allocation of common expenses together with legal original documents is the basis for parties to account for common expenses allocated as agreed in the contract. 5. If the venture regulates about sharing the products, periodically as agreements in venture contract, the venture parties prepare the List of products to share which is confirmed by the venture parties on the quantity, characteristics. Then each party keeps one copy original copy . The goods received notes or delivery notes must be prepared in two copies when the products are delivered. Each party holds one copy. The goods received notes shall be the base for parties to record, keep track of and for liquidation of the contract.
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B. Major transactions 1. Accounting for expenses incurred independently in each venture parties 1.1. Based on related invoices and documents to record expenses created independently that venture parties have to cover when involved in jointly controlled operations: Dr. 621, 622, 627, 641, 642 details in joint ventures contract Dr. 133 - VAT deductible if any Cr. 111, 112, 331, 1.2. At the end of the period, transfer the expenses created independently to summarise the production and business expenses of the joint venture contract: Dr. 154 - Work in progress details in joint ventures contract Cr. 621, 622, 627 details in joint ventures contract 2. Accounting for common expenses incurred that are charged to all venture parties: 2.1. Accounting in the venture parties creating common expenses: a When creating common expenses, based on related invoices and documents all venture parties record: Dr. 621, 622, 627, 641, 642 details in joint ventures contract Dr. 133 - VAT deductible if any Cr. 111, 112, 331,... b If the venture contract regulates the share of common expenses, at the end of accounting period, based on the regulations of the contract, the accountant prepares the List of allocation of common expenses agreed by venture parties. Based on allocated expenses to venture other venture parties to record: Dr. 138 - Other receivables details for each venture party Cr. 133 - VAT deductible if any Cr. 621, 622, 627, 641, 642 2.2. Accounting for the venture parties not creating common expenses for venture contract: Based on the List of allocation of common expenses that was agreed by venture parties following the acknowledgement of the venture parties created common expenses : Dr. 621, 622, 623, 641, 642 details in joint ventures contract Dr. 133 - VAT deductible if any Cr. 338 - Other payables details for venture parties creates common expenses 3. Accounting for shared products: 3.1. When received shared products from venture contract, based on the received note and related documents: Dr. 152 - Raw materials If the shared product is not finished goods
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 155 - Finished goods If the shared product is finished goods Dr. 157 - Goods on consignment If the shared products sent for consignment, not through the company s premise Cr. 154 - Work in progress Including independent expenses and common expenses that venture parties have to cover Details in joint ventures contract . 3.2. When received shared products from the contract and put into use for production of other products, based on the received notes and related documents: Dr. 621 Raw material costs Cr. 154 - Work in progress including independent expenses and common expenses that venture parties have to cover details in joint ventures contract . 3.3. When the venture contract regulates of not sharing products but giving to an entity to sell to outside, after issuing to the seller of the products, transfer independent expenses and common expenses that venture parties have to cover to cost of goods sold: Dr. 632 - Cost of goods sold Cr. 154 - Work in progress including independent expenses and common expenses that venture parties have to cover details in joint ventures contract . 4. Accounting for sales that a venture parties sells products for other parties and shares income to other venture parties: 4.1. Accounting at the seller: When sell products as regulation of contract, the seller must issue invoice for all products sold, simultaneously records sales generated: Dr. 111, 112, 131,... Cr. 338 - Other payables details in joint ventures contract Cr. 3331 VAT payable if any and Based on the regulation of venture contract and Report of Revenue Allocation to record income equivalent to benefit of the venture parties: Dr. 338 - Other payables details in joint ventures contract Cr. 511 Sales benefit that the seller receives as agreements in contract When receive invoice issued by venture parties who do not sell products based on income that those venture parties receive from the contract: Dr. 338 - Other payables details in joint ventures contract Dr. 3331 VAT 33311 if share VAT output Cr. 338 - Other payables details for each venture parties When send sales to venture parties who do not sell products: Dr. 338 - Other payables details for each venture parties Cr. 111, 112,... 4.2. Accounting at the venture parties who do not sell products:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC The venture parties do not sell products of venture. Based on the Report of revenue allocation confirmed by venture parties and related documents, the venture parties shall issue invoice for the seller based on income that the company receives: Dr. 138 - Other receivables including VAT if share VAT output, details for venture parties selling products Cr. 511 Sales details for contract and shared amount Cr. 3331 VAT if the VAT input amount is shared also When the venture parties pay for the sales, based on the actual receipt: Dr. 111, 112,... amount sent by venture parties Cr. 138 - Other receivables details for venture parties selling product III. Accounting for venture in form of jointly controlled assets A. General regulations 1. Jointly controlled assets contributed by venture parties are assets contributed or purchased by venture parties, used in venture s purpose and makes profit for venture parties as regulation of venture contract. 2. Each venture party receives products from using of jointly controlled assets, therefore must cover a part of the expenses created as agreements in contract. the 3. Venture parties must record in details in the same accounting book system of each one to record and reflect in the financial statements as follows: Contribution to jointly controlled assets, classified by the nature of assets; Loans independently created of each contributor to the venture; Borrowings, the common loan that have to bear with other contributor to the venture from the operation of venture; Income from sale or use of products shared from the venture and created expenses are shared from activities of venture; Expenses created involving in business contribution. 4. When it is created common expenses, income that venture parties must suffer or receive, venture parties must account as the case of jointly controlled operations. B. Accounting for some activities involving in the venture in the form of jointly controlled assets 1. When the venture parties use their fixed assets to contribute to the venture contract in the form of jointly controlled assets, the accountant records those fixed assets in account 211 and only records the changes of purpose, location of use of fixed assets. 2. When the venture parties purchase or use other assets to contribute to the venture contract in the form of jointly controlled assets, the accountant records the assets based on actual
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC expenses paid to obtain the assets: Dr. 211, 213 details of jointly controlled assets in venture contract Dr. 133 - VAT deductible if any Cr. 111, 112,... Cr. 331 - Trade payables 3. When the venture parties, by themselves or in cooperation with other parties, invest in construction to have the jointly controlled assets: Based on actual expenses to record: Dr. 241 - Construction in progress details of venture contract of jointly controlled assets Dr. 133 - VAT deductible if any Cr. 111, 112, 152, 153, 155, 156,... Cr. 331, 341, into When the construction is completed and put into use and the finalization of construction determines investment is approved, the accountant determines the value of jointly controlled assets construction formed from investment in construction and expenses not approved if any : Dr. 211 - Tangible assets details in jointly controlled assets Dr. 213 - Intangible assets details in jointly controlled assets Dr. 138 - Other receivables 1388 expenses not approved and to be collected, if any Dr. 152 - Raw materials Cr. 241 - Construction in progress Based on capital, fund for investment, construction of jointly controlled assets, the accountant construction increases the contributed capital and decreases capital, fund according to current regulations. involving The method of record business operations involving in accounting for expenses, income that venture parties in jointly controlled assets must suffer or receive is done as regulation for jointly controlled operations.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 223 INVESTMENT IN ASSOCIATES This account reflects the value of the direct investment of investor in associates and the increases and decreases of investment in associates. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. The investment is considered investment in associates when the investor hold directly from 20% to less than 50% owner s equity from 20% to less than 50% vote right of the invested entity without any other regulations. e When the vote right rate of the investor in the associate equals the contribution rate of the investor in that associate: Vote right rate of the direct investor in the associate = Total owner s equity of the associate Total contribution of the investor in the associate X 100%

When the vote right rate is different from the contribution rate due to other agreements investor between the investor and the associate, the investor s vote right is determined based on the agreement document between the investor and the associate.

2. Accounting for investment in associates when make up and explain the own finance report of the investor in cost basis method. When account the investment in associates in cost basis change method, the value of the investment does not change during the time of investment progress, exempt from the investor purchases more or liquidates all or a part of that investment or get benefits out of the shared profit. 3. The cost basis of the investment is determined as follows: investment Cost basis of investment in associates consists of the contribution or real value of the investment adds + purchasing expenses if any , such as expenses for intermediary, transaction... When contribute to the associate by fixed assets, materials, merchandise goods, the cost basis of the investment is recorded based on the value agreed by contributors. The difference between the noted value of fixed assets, materials, merchandise goods and the revalued amount is recorded as follows: The difference between the higher revalued amount than the net book value of materials, merchandise goods is recorded into other income; the difference between the lower revalued amount than the noted value of materials, merchandise goods is recorded into other expenses; The difference higher between the revalued amount and the net book value of fixed assets is recorded all into other income; the difference lower between the revalued amount and the net book value of fixed assets is recorded into other expenses; 4. The accountant must record in details of the value of investment to associates. Record the
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC value of investment in associates as follows: The amount of investment in joint stock companies listed on the stock market of an investor should be recorded according to the actual payment to buy the securities, including direct expenses involving in purchasing of securities and official report of the securities trading centre on the ownership of the investor for those securities. The amount of investments in joint stock companies that have not been listed on the stock market should be recorded according to the document of ownership for those securities and receipt documents of selling securities of the invested entities or purchasing documents of those securities; For investments in others kinds of company, the record is based on document of contribution, profit or loss sharing report agreed by the parties or purchasing, selling documents of those investments; Investors are only allowed to record the dividend, income shared from the associate when dividend, receive official notice of the associate about the dividend for the investor or the shared income in the period on accrual principle.

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STRUCTURE AND CONTENTS OF ACCOUNT 223 - INVESTMENT IN ASSOCIATES Debit: Increase of cost of the investment. Credit: Cost of the investment reduces owing to getting back the capital invested or get other benefit out of shared profit; Cost of the investment reduces owing to sale, liquidation of all or a part of the investment.

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Debit balance: Historical cost of the investment in associates at the end of the period. MAJOR TRANSACTIONS 1. When invest in associates in the method of buying equity securities or contribute by money, based on the real payment, the investor records: Dr. 223 - Investment in associates Cr. 111, 112,... 2. When the investor holds the investment less than 20% vote right in a specific company, when the investor buys more equity securities or contributes more to the company to become the investor having considerable influence on the invested entity, the investor notes: Dr. 223 - Investment in associates Cr. 228 - Other long term investments investment is less than 20% Cr. 111, 112 additional amount
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 3. When invest in associates by contributing by materials, goods, fixed assets, based on the revalued amount of materials, merchandise goods, fixed assets agreed by the investor and the associate: Dr. 223 - Investment in associates Dr. 214 - Accumulated depreciation and amortization Dr. 811 - Other expenses if the revalued amount of materials, merchandise goods, fixed assets is lower than the noted value of materials, merchandise goods, the net book value of fixed assets Cr. 152, 153, 156, 211, 213,... Cr. 711 - Other income if the revalued amount of materials, merchandise goods, fixed assets is higher than the noted value of materials, merchandise goods, net book value of fixed assets 4. When receive the official notices of the associ associate about the dividend, shared profit, the investor records: Dr. 138 - Other receivables When receive the official notices of the associate Dr. 223 - Investment in associates If receive the dividend by equity securities Cr. 515 - Financial income When truly receive money: Dr. 111, 112,... Cr. 138 - Other receivables 5. When receive other benefit from the associate out of dividend, shared profit, the investor reduces the cost basis of the investment: Dr. 111, 112, 152,... Cr. 223 - Investment in associates 6. When the investor buy more the capital or the associate and has the right of control the associate, the investor transfer the cost basis of the investment to account 221 "Investment in subsidiaries": Dr. 221 - Investment in subsidiaries if the investor becomes the parent company Cr. 223 - Investment in associates Cr. 111, 112,... if buy more capital to become the parent company 7. When the investor liquidates a part of investment in associates, so that does not have the considerable influence on the invested entity, the investor transfers the cost basis of the investment to other related account: Liquidation, sale of profitable investment: Dr. 228 - Other long term investments Dr. 111, 112,... income from liquidation, sale of a part of the investment Cr. 223 - Investment in associates Cr. 515 - Financial income difference between the noted value of the investment and the sales of that investment

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Liquidation, sale of a part of the investment that made loss: Dr. 635 - Financial expenses difference between net book value of the investment and the sales of that investment Dr. 228 - Other long term investments Dr. 111, 112,... proceeds from liquidation, sale a part of the investment Cr. 223 - Investment in associates When liquidate, sell all the investment in a associate, the investor reduces the investment and records income profit or loss from the liquidation, sale of the investment: Accounting for sale, liquidation of the investment that made loss: Dr. 111, 112, 131,... Dr. 635 - Financial expenses difference of the proceeds and the book value of investment the Cr. 223 - Investment in associates Sale, liquidation of profitable investment: Dr. 111, 112, 131,... Cr. 515 - Financial income difference between the proceeds and the book value of between investment Cr. 223 - Investment in associates Expenses for liquidation, sale of investments: Dr. 635 - Financial expenses Dr. 133 - VAT deductible if any Cr. 111, 112,...

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 228 OTHER LONG TERM INVESTMENTS This account records the current value and the increases, decreases of Other long term investments except for investment in subsidiaries, shares in jointly control entity, investment in associates such as debt securities, equity securities, or investment in other companies that has less than 20% owner s equity 20% vote right , etc and collection period over one year. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. When lending, the accountant must record in details of each amount of money to each borrower, borrowing method, borrowing period and interest rate. 2. When the company invests by buying bonds, the accountant must record in details of each entity issuing debt securities, time and bond interest rate. another 3. When the investor buys equity securities of another company and only has less than 20% vote right, the accountant must record the investment into this account and must record in details of each par value of equity securities, the entity issuing equity securities. 4. When the investor contributes to the jointly control entity but has not the jointly control right control and has less than 20% vote right in the venture, record the contribution into account 228 venture, Other long term investments using the cost basis. STRUCTURE AND CONTENTS OF ACCOUNT 228 - OTHER LONG TERM ACCOUNT INVESTMENTS Debit: her Increase in the value of other long term investments. Credit: Decrease in the value of other long term investments. Debit balance: Current value of other long term investments. Account 228 "Other long term investments" composes three sub- accounts: Account 2281 - Equity securities: to record long term investment by equity securities of the investor. Account 2282- Debt securities: to record long term investment by bond of the investor. Account 2288 - Other long term investments: to record other long term investments such as lends, contribution by money or assets.

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MAJOR TRANSACTIONS
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 1. When lend other companies for more than a year: Dr. 228 - Other long term investments 2288 Cr. 111, 112, 2. Periodically, record interest income generated according to the loan contract: Dr. 111, 112, if collection in cash at sight Dr. 138 - Other receivables if cash has not received at once Cr. 515 - Financial income interest expenses created from borrowings for obtaining capital 3. Record of interest income in the current period: Dr. 111, 112,... if collection in cash at sight Cr. 515 - Financial income 4. Record of collection of the principal and interest income: Dr. 111, 112, principal and interest income Cr. 228 - Other long term investments principle amount 2288 Cr. 515 - Financial income interest income 5. Record of bond acquisition in another company in the period of more than one year: company Dr. 228 - Other long term investments 2282 Cr. 111, 112, 6. Record of interest income received in advance: 6.1. When make payment to acquire bond and received interest income in advance: Dr. 228 - Other long term investments 2282 Cr. 111, 112, Actual payment Cr. 3387 - Deferred income interest income received in advance 6.2. Periodically, calculate and allocate the income in the proper period: Dr. 3387 - Deferred income Cr. 515 - Financial income 7. Record of interest income periodically received: 7.1. When pay to acquire the bond: Dr. 228 - Other long term investments 2282 Cr. 111, 112,... 7.2. Periodically record interest income: Dr. 111, 112 if cash received Dr. 138- Other receivables if cash not yet collected Cr. 515 - Financial income
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8. Record of bond acquisition with interest income received later: When pay to buy the bond, accounting entry is similar to the one guided in item 7.1. Periodically, calculate and record the interest income in each period: Dr. 138 - Other receivables 1388 Cr. 515 - Financial income When the bond is due, the interest income is collected: Dr. 111, 112,... Cr. 228 - Other long term investments 2282 Cr. 138 - Other receivables 1388 accumulated interest income in prior periods Cr. 515 - Financial income interest income of the current period 9. Record of principal collected when the bond is due: Dr. 111, 112,... Cr. 228 - Other long term investments 2282 cont ributes 10. When the company buys equity securities or contributes in another company but only has less than 20% of vote right: Dr. 228 - Other long term investments equal to cost of the investment adds + expenses directly involving in investment activities such as intermediary expenses 2281, 2288 Cr. 111, 112, 331,... 11. When the company contributes to another company by assets but only has less than 20% of vote right and has not the jointly control right, based on the revalued amount of materials, merchandise goods, fixed assets to record: Dr. 228 - Other long term investments 2288 ation Dr. 214 - Accumulated depreciation and amortization reva Dr. 811 - Other expenses difference of the revalued amount and the book value of materials, merchandise goods, the net book value of fixed assets Cr. 152, 153, 156, 211, 213,... Cr. 711 - Other income difference of the revalued amount and the book value of materials, merchandise goods, the net book value of fixed assets 12. When the company increases the investment from dividend or distributed profit: Dr. 228 - Other long term investments 2281, 2288 Cr. 515 - Financial income 13. When the investor sells a part of the investment in subsidiaries, joint venture, associate and lose the right of control or the right of jointly control or lose the considerable influence: Dr. 228 - Other long term investments 2281, 2288 Cr. 221 - Investment in subsidiaries Cr. 222 - Shares in joint ventures Cr. 223 - Investment in associates
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14. Sale of equity securities, or liquidation of contribution in other long term investments: If profit made: Dr. 111, 112,... Cr. 228 - Other long term investments 2281, 2288 Cr. 515 - Financial income difference between the cost of goods sold and historical cost . If loss incurred: Dr. 111, 112,... Dr. 635 - Financial expenses difference between the cost of goods sold and historical cost Cr. 228 - Other long term investments 2281, 2288 15. When the investor contributes more to the venture and become a contributor having the jointly control right in the jointly control entity: Dr. 222 - Shares in joint ventures Cr. 111, 112, additional contribution Cr. 228 - Other long term investments 2288 16. When the investors contribute more and become the parent company or have considerable influence: Dr. 221- Investment in subsidiaries, or Dr. 223 - Investment in associates Cr. 111, 112 additional contribution Cr. 228 - Other long term investments 2281, 2288

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 229 PROVISION FOR LONG TERM INVESTMENTS This account reflects the current value and the increases and decreases in provision for long term investments and loss of other long term investments. Provision for long term investments consists of: Provision for decrease of stock in financial investment activities is the provision for the loss value due to possible decrease of stocks that the company holds; Provision for loss due to decrease of long term investments or loss of the entity receiving investment and need more capital.

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THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Provision and reverse for long term investments are often made at the end of the accounting period. If the company is accepted by the Ministry of Finance to use the fiscal year different from solar calendar year not from 1 January to 31 December , provisions should be made on the last day of the financial year. statements, For companies preparing the interim financial statements, if there are any great changes of provision, the provisions or reverses shall be revised increased or decreased at the end of interim period quarterly report . 2. Provision for long term investments must be done as regulation of each kind of long term investment. Provision is determined by the difference between the net realisable value and market price or the collectible investment and historical cost recorded in the accounting book. If the provision required in the current year is higher than the provision balance in the into prior year, the difference shall be recorded into business and production expenses in the year. If the provisions required in the current year are lower than the provision not yet used in the prior year, the difference shall be reduced to business and production expenses in the year. 3. Provision for long term investments is done at the end of a fiscal year if the market price of us stocks long term investment of the company usually declines as compared to the historical conditi cost recorded in the accounting book. The conditions to make the provision for decline in the long term securities are as follows: The stocks of the company are invested legally; The securities are tradable in the market. At the balance sheet date, the market value of the securities declines as compared to its historical cost recorded in accounting book.

4. The company must provide the provision for each kind of long term securities when there is a decline in price at the balance sheet date in the following formula: Provision for decrease of long term securities for the next year Quantity of decreased securities at the time of preparing annual financial statements Original cost of securities recorded on the accounting book

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Market value of securities

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC The company must determine the provision required for each kind of long term securities whose prices decline and combine those provisions in the list of provisions for decline in long term securities investment. This list should show the comparative figure of prior year that has not been used up yet in order to determine the additional provision or the reverse into financial expenses. 5. The provision must be made for the capital of the General Corporation contributed in its members or of the General Corporation or holding company invested in State limited liabilities company with one member, limited liabilities companies with more than two members, joint stock company, partnership, joint venture, associates or other long term investments. If the investee makes loss, then requires more investment except for the loss is planned ahead of time in the business plan , the provision for each investment is made in the following formula: Provision for Actual contribution of parties in the company Actual Investment of the company X Total contribution of parties to the company

from long term investment

owners equity

The provision for each long term investment shall be made up to the amount invested. At the balance sheet date of the following year, if there is profit gained from the investment, year, the investee makes gain or less loss, the reverse entry must be made for part of or total amount of provision made to reduce the financial expenses. 6. The provision for financial investment is also used to compensate loss of long term also investments since the investee is bankrupt or suffers natural disaster, etc., leading to investments uncollectible or collected at amount lower then its historical cost. This provision is not used to compensate for loss due to liquidation of investments. STRUCTURE AND CONTENTS OF ACCOUNT 229 - PROVISION FOR LONG TERM INVESTMENTS Debit: Reverse of provision for long term investments th year when the provision required is lower this than the unused one provided in prior year; Compensate value of loss of long term investment when there is decision to use the provision already made to compensate for the loss.

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Credit: Increase of provision for long term investments provision for the first time and additional provision for the difference .

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Credit balance: Current provision for long term investments at the end of the period. MAJOR TRANSACTIONS 1. At the end of the accounting period, based on the decline in the current long term investments to provide the first provision: Dr. 635 - Financial expenses Cr. 229 - Provision for long term investments 2. At the end of next accounting period: If the provision required this year is higher than provision for long term investments made in prior year that has not been used up yet, an addition provision must be made for that difference: Dr. 635 - Financial expenses Cr. 229 - Provision for long term investments If provision required in this year is lower than the provision for long term investments made in prior year that has not been used up yet, a reverse must be made for that difference: Dr. 229 - Provision for long term investments Cr. 635 - Financial expenses 3. Actual loss occurred for instance, the investee is bankrupt, or suffers natural disaster, fire, etc . The investments are uncollectible or the collected amount is lower than the amount the initially invested. The company decides to use the provision for long term investments already made to compensate loss: Dr. 111, 112 If any Dr. 229 - Provision for long term investments provision amount already made Dr. 635 - Financial expenses provision amount not yet provided Cr. 222, 223, 228 historical cost of investments being loss

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 241 CONSTRUCTION IN PROGRESS This account reflects construction expenses including costs of purchasing fixed assets, construct or reconstruct, repair, widen, re-equip the construction and the status of finalization of construction in companies purchasing fixed assets, construction and renovation of fixed assets. Fixed asset renovation and construction projects can be performed by the company itself or by another company. This account is also used for companies performing themselves to records expenses created in the progress of construction and renovation. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Construction expenses are expenses needed to construct or reconstruct, repair, improve, widen or re-equip the construction. Construction expenses is calculated based on the amount of work, norms system, economic-technical norms and policies of the State, suitable with objective elements of the market in each period, regulation on managing of construction ma period, investment. Construction expenses consist of: Construction expenses; Equipment expenses; Other expenses. Account 241 is recorded in details in each construction, construction categories. Each category of construction must be recorded in details for each type of expenses of construction details and is controlled in accumulate from the inception until the construction or categories of inception construction are complete and put into use. 2. In construction, constructing expenses and equipment are often recorded for each assets, equipment expenses for project management and other expenses that are often commonly paid. The investor must account for and allocate expenses for project management and other expenses for each asset in the principle: Expenses for project management and other expenses directly involving in a specific asset, account for that asset; Expenses project management and other common expenses directly involving in many assets, account in suitable method.

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3. When construction is completed and has put into use but the finalization of the construction has not been approved, the company increases the historical cost of assets using the estimated price Estimated price is used based on the actual expenses paid to have the fixed assets . The company calculates the depreciation amount based on this estimated cost until the cost is adjusted upon the approved value. 4. Actual expenses for renovation fixed assets could be recorded directly into production, business expenses in the period of the company. If expenses for renovation fixed assets in the period has high value and involves in many periods of production, and business, it is acceptable to allocate gradually into production, business expenses.
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Account 241 - Construction in progress, composes three sub-accounts: Account 2411 - Acquisition of fixed assets: to record expenses for purchasing fixed assets and the finalization status of expenses from purchasing fixed assets if assembly, testing is needed before put into use including both purchase of new or used fixed assets . If fixed assets purchased needs more investment, equipment to put into use, all the expenses for more purchase, equipment are also recorded into this account. Account 2412 - Construction in progress: to record expenses for investment in construction and the finalization status of construction. This account is recorded in details for each construction, construction categories For each assets formed from the investment and each assets must be recorded in details of each expenses of construction. : Account 2413 - Extraordinary repairs: to record expenses and the finalization status of fixed assets renovation. General repairs of fixed asset are not recorded into this account but assets recorded directly into expenses for production and business.

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STRUCTURE AND CONTENTS OF ACCOUNT 241 - CONSTRUCTION IN PROGRESS Debit: Expenses for construction, purchasing and renovation of fixed assets tangible and intangible assets Costs for upgrading and improving fixed assets Expenses for purchasing investment property If the construction investment is needed ; Expenses for construction of investment property; Expenses created after initial recognition of fixed assets, investment property.

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Credit: Value of fixed assets created by completed c construction projects, purchasing and have put into use; Value of construction removed and other construction expenses that were not approved when finalized the construction; Value of renovation of completed fixed assets transferred when finalization of the construction was approved; Value of investment property formed from construction completed; Transfer expenses created after initial recognition of fixed assets, investment property to related accounts.

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Debit balance: Costs of construction and renovation of fixed assets in progress.
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Value of construction projects and renovations of fixed asset completed but not come into use or the fixed asset has not been approved. Value of investment property in progress.

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MAJOR TRANSACTIONS A. Accounting for investment and construction expenditures at consignor I. Accounting for construction 1. When the consignee handovers the construction works and fixed assets completed and put them into production of goods and services that are subject to subtraction method VAT, based nutes on the consignment contract, finalization minutes of completed construction projects and invoices, the accountant records the followings: Dr. 241 - Construction in progress 2412, 2413 Dr. 133 - VAT deductible 1332 if any Cr. 331 - Trade payables 2. When purchasing equipments for construction, if the fixed assets formed are used in subtraction production of goods and services subject to subtraction method VAT, based on invoices and goods received notes: Dr. 152 - Raw materials Price excluding VAT Dr. 133 - VAT deductible 1332 Cr. 331 - Trade payables Total amount When send the non-assembled equipments directly to the construction site and transfer to the consignee: Dr. 241 - Construction in progress Dr. 133 - VAT deductible 1332 Cr. 331 - Trade payables Cr. 151 - Goods in transit 3. Record of payment to the consignee or the supplier of materials, goods, services involving in construction: Dr. 331 - Trade payables Cr. 111, 112 4. Record of equipments for construction sent to the consignee: a For equipments not need assembled: Dr. 241 - Construction in progress Cr. 152 - Raw materials details of equipments in warehouse b For equipments need assembled: When sent equipments to the consignee:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 152 - Raw materials details of equipment to be assembled Cr. 152 - Raw materials details of equipments in warehouse When the completed construction transferred by the consignee is checked and taken over and approved for payment, the value of equipments is recorded into construction: Dr. 241- Construction in progress 2412 Cr. 152 - Raw materials details of equipment to be assembled 5. When other expenses created: Dr. 241 - Construction in progress 2412 Dr. 133 - VAT deductible 1332 If any Cr. 111, 112, 331, 341 6. When an investor using foreign currencies in investment construction activities, based on whether that investment is in pre-operating stage not yet running the production, business stage activities or the course of business: pre-operating 6.1. Expenses incurred from construction in pre-operating stage (The company has not yet do business, production activities): The expenses for construction in foreign currencies: Dr. 241 - Construction in progress Using the exchange rate of the date of transaction exchange Cr. 111, 112 Using the book exchange rate Cr. 331 - Trade payables Using the exchange rate of the date of transaction Cr. 152, 153 Cr. 413 Foreign exchange differences 4132 Difference between book and the date of transaction exchange rate gain from foreign exchange differences . If the noted exchange rate is higher than the exchange rate at the date of transaction, the exchange difference is debited into account 413 - Foreign exchange differences loss from foreign exchange differences . When the construction completed and put into u and the finalization of the investment is use, approved, the accountant transfers the outstanding balance of account 413 4132 the foreign exchange differences arisen in construction to financial expenses or financial income, or to account 242 "Long term prepaid expenses" if the loss is substantial , or account 3387 "Deferred income" if the gain is substantial and then allocate it in the maximum period of five years for accounting entries, please refer to the guidance in account 413 "Foreign exchange differences" .

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6.2. Expenses created for construction in the course of business: The expenses created for construction in foreign currencies: Dr. 241- Construction in progress Using the exchange rate of the date of transaction Cr. 111, 112 Using the book exchange rate Cr. 331 - Trade payables Using the exchange rate of the date of transaction Cr. 515 - Financial income Difference between the book and the date of transaction exchange rate - gain from foreign exchange differences . If the book exchange rate is higher than the one in the transaction day, the difference is debited into account 635 "Financial expenses" loss from foreign exchange differences . II. Accounting for construction completed and put into use 1. When the construction is completed, the progress of check and take over is finished, assets progress are transferred and put into use: If the construction finalization report is approved, based on construction the value of assets formed from investment approved to record into the accounting book. If approved the draw has not been approved, Increases the value of assets formed from investment using provisional price Provisional price is real expenses paid to have the assets, based on account expenses 241 to specify the provisional price . Both cases are recorded as follows: Dr. 211 - Tangible assets Dr. 213 - Intangible assets Dr. 152, 153 Cr. 241 - Construction in progress approved price or provisional price 2. If the finalization of construction investment is approved, the accountant must adjust the estimation to the approved value: If the approved value is higher than the estimation: Dr. 211 - Tangible assets Dr. 213 - Intangible assets Dr. 152, 153 Dr. 138 - Other receivables receivables of the expenses submitted for approval that were not approved Cr. 241- Construction in progress difference between the approved value and the estimation If the approved value is lower than the estimation, the reverse entry is made for the above entry. If fixed assets formed from investment in capital construction or investment and development fund, simultaneously the accountant records: Dr. 441- Investment in capital construction Dr. 414- Investment and development fund Cr. 241- Construction in progress unapproved amount if any Cr. 411- Contributed capital Approved value of assets formed from investment in construction
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC In the case, the construction is funded by the contributed capital, the accountant should not simultaneously record this entry . 3. When the construction is finished but has not yet been put into use, waiting for set up or approve, the accountant must record in details for Account 241 "Construction in progress" for the completed construction waiting for transfer and approve. III. Accounting for construction of investment property 1. Expenses to make the property ready for work after purchasing: Dr. 241 - Construction in progress Dr. 133 - VAT deductible 1332 If any Cr. 111, 112, 331 truction 2. Record of expenses created from construction of investment property: Dr. 241 - Construction in progress Dr. 133 - VAT deductible 1332 Cr. 111, 112, 152, 153, 142, 141, 242, 331 3. Transfer the completed property construction: Dr. 217 - Investment property if the property meets the recognition criteria of investment property Dr. 156 - Goods 1567 - Property/real estate if the fixed assets are held for sale Cr. 241 - Construction in progress 4. When expenses created from upgrade, improvement that 1 surely make the investment property more economically value than initial 2 being the company s ob obligation to make the investment property ready for work, the accountant increases the historical cost of the accountant investment property: Record actual expenses for upgrade, improvement of investment property: Dr. 241 - Construction in progress Dr. 133 - VAT deductible 1332 Cr. 111, 112, 152, 153, 331,... When the upgrade, improvement of investment property completed, the accountant transfers and increases the historical cost of investment property: Dr. 217 - Investment property Cr. 241 - Construction in progress B. Accounting for construction conducted by the company itself 1. Accounting for construction is recorded into the same accounting book system of the company: 1.1. Record the actual expenses incurred in construction investment:

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC If the construction used for production of goods and services subject to subtraction method VAT, the expenses incurred shall be recorded as follows: Dr. 241 - Construction in progress Price excluding VAT Dr. 133 - VAT deductible 1332 Cr. 111, 112 Total amount If the construction used for production of goods and services subject to VAT in direct method or not subject to VAT, the expenses incurred shall be recorded as follows: Dr. 241 - Construction in progress Total amount Cr. 111, 112, 152 Total amount 1.2. When the construction is completed and the finalization of construction investment is approved, the accountant records accounting entri that are similar to the ones guided in entries Sections II and III. 1.3. When the finalization of construction is approved, based on invest approved, investment source and purposes to record: a Fixed assets used in production, business activities are funded by construction investment activities fund (the State Budget) or investment and development fund, when the finalization of construction investment is approved, the accountant records the followings followings: Dr. 441 - Investment in capital construction Dr. 414 - Investment and development fund Cr. 411 - Contributed capital b) Fixed assets are made from welfare funds and are used in welfare activities, when the finalization of construction investment is approved; the accountant increases the welfare funds that make fixed assets: Dr. 431 - Bonus and welfare funds 4312 - Welfare funds Cr. 431 - Bonus and welfare funds 4313 - Welfare funds to make fixed assets C. Accounting for renovation of fixed assets th Accounting for renovation of fixed assets of the company can be similar to accounting for constructions performed itself or on consignment procedure. 1. Renovation of fixed assets by the Company itself: 1.1. Expenses for renovation incurred are debited into account 241 "Construction in progress" 2413 and recorded in details for each construction, each renovation of fixed assets. Based on documents of expenses incurred, the company records: If renovation of fixed assets used in production of goods and services subject to subtraction method VAT: Dr. 241 - Construction in progress 2413 Price excluding VAT Dr. 133 - VAT deductible 1332 Cr. 111, 112, 152, 214 Total amount
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC If renovation of fixed assets used in production of goods and services subject to VAT in direct method or not subject to VAT: Dr. 241 - Construction in progress 2413 Total amount Cr. 111, 112, 152, 214, 334 Total amount 1.2. When the renovation completes, the accountant must determine the actual cost of each renovated construction to record these expenses as following cases: If expenses for renovation of fixed assets are low value, the accountant transfers all the expenses to production, business expenses in the period: Dr. 623 - Machine costs Dr. 627 - Factory overhead costs Dr. 641 - Selling expenses Dr. 642 - General and administration expenses Cr. 241 - Construction in progress 2413 If expenses for renovation of fixed assets are high value and involve in many production, assets business periods, when the renovation of fixed assets completes, the accountant transfers to prepaid expenses account allocated or accruals in the case accruals for renovation expenses were provided : Dr. 142 - Prepaid expenses Dr. 242 - Long term prepaid expenses Dr. 335 - Accruals Cr. 241 - Construction in progress 2413 If repair or improvement of fixed assets met recognition criteria, the accountant increases the historical cost of fixed assets: Dr. 211- Tangible assets Cr. 241 - Construction in progress 2413 2. Renovation of fixed assets conducted by consignment: When the consignee handovers the renovation volume: Dr. 241 - Construction in progress 2413 Cr. 331- Trade payables The accounting entries for transferring renovation expenses are similar to the ones in renovation of fixed assets conducted by the Company itself.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 242 LONG TERM PREPAID EXPENSES This account reflects actual expenses created involving in business results of many accounting periods and the transfer of these expenses to production, business expenses of the next accounting periods. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Long term prepaid expenses are: Prepaid expenses for fixed assets under operating lease Land use rights, buildings, stocks, offices, showrooms and other fixed assets for production, business activities in many fiscal years. When prepayment for land rent in long term periods are granted the certificate of land used rights, these expenses are recorded into account 213 instead of account 242; The prepayment for leases of long term infrastructure used in busin business activities for several periods that was not granted the certificate of used right; The prepayment for business activities in many fiscal years; The expenses for the company establishment, training, advertising incurred in pre-operation training, stage that are allocated in not more than three years; High-value research expenses are allocated in years; Expenses in development stage that do not satisfy recognition criteria of intangible assets; Training expenses for managing staff and technical workers; Expenses for relocation or restructuring of the company with high value that are allocated in restructuring several years if the provision for restructuring has not been provided yet; expl Expenses for insurance insurance for fire, explosion, civil responsibility of the owner of transporting vehicle, insurance for vehicle, property, etc and fees that the company purchases and pays one time for many fiscal years; Tools and supplies with high value put in production and business activities one time and used for more than one year that must be allocated in years; The repayment for interest expenses from borrowings for long term periods or from issuing bonds; Interest expenses from instalment, deferred payment; Expenses incurred from issuing the company bonds with high value that should be gradually allocated; Expenses for renovation of fixed assets incurred once with high value that the company did not make provisions for and must be allocated in many years;

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC The transfer of foreign exchange differences incurred and resulted from revaluation of monetary items in foreign currencies if loss in construction investment period preoperating when completed; The difference between the selling price and the net book value of fixed assets sold and lease back under financial lease the selling price is lower ; The difference between the selling price and the net book value of fixed assets sold or lease back under financial lease the selling price is lower ; Expenses with high value involving in investment property after the initial recognition that does not satisfy the recognition criteria to increase the historical cost of the assets that should be allocated in years; When the business combination not leading to the parent-subsidiary relationship generated goodwill or when equitizing the SOEs leading to the business advantage; Other expenses.

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2. Account 242 should only record expenses incurred in production, business activities for more than one year; 3. The calculation and allocation of Long term prepayment into production, business expenses prepayment in each accounting period should be based on the nature and amount of each kind of expenses the to choose the appropriate method; 4. The accountant should record each Long term prepayment in details of amount incurred, amount allocated into appropriate periods and the remaining that has not been allocated into the expenses; 5. The company must record in details of foreign exchange differences loss on foreign foreign exchange differences for the investment construction incurred in pre-operating period that construction have not been allocated into expenses. STRUCTURE AND CONTENTS OF ACCOUNT 242 – LONG TERM PREPAID EXPENSES Debit: Long term prepaid expenses incurred in a period; Transfer of foreign exchange differences incurred and resulted from revaluation of monetary items in foreign currencies if loss in investment construction investment period preoperating when completed, then shall be allocated into financial expenses.

Credit: Long term prepaid expenses recorded into production, business expenses; Record the allocation of foreign exchange differences incurred and resulted from revaluation of monetary items in foreign currencies if loss in construction investment pre-operating when completed into financial expenses in the period.
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Debit balance: Long term prepaid expenses have not been recorded into production, business expenses in the period; Foreign exchange differences incurred and resulted from revaluation of monetary items in foreign currencies if loss in construction investment pre-operating when completed, that have not been allocated at the year end.

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MAJOR TRANSACTIONS 1. Record of the high-value long term prepaid expenses incurred that must be gradually allocated into production, business expenses in many fiscal years such as establishment expenses, expenses for training for employees, adve advertising in pre-operating stage of the newly established company, research and reallocation expenses: Dr. 242 - Long term prepaid expenses Dr. 133 - VAT deductible If any Cr. 111, 112, 152, 331, 334, 338 Periodically, the long term prepaid expenses must be allocated into production, business expenses: production, Dr. 623, 627, 635, 641, 642 Cr. 242 - Long term prepaid expenses 2. Record of prepayment for lease of fixed assets, infrastructure under operating lease in many assets, years: If fixed assets leased are used for production of goods and services subject to Subtraction method VAT: Dr. 242 - Long term prepaid expenses Dr. 133 - VAT deductible If any Cr. 111, 112 If fixed assets leased are used for production of goods and services subject to VAT in direct method or not subject to VAT: Dr. 242 - Long term prepaid expenses Cr. 111, 112 3. Record of tools and supplies with high value put in production, business activities one time and used for more than a year that must be allocated in years: When the tools and supplies put in use, based on the goods dispatch notes to record: Dr. 242 - Long term prepaid expenses Cr. 153 - Tools and supplies Periodically the tools and supplies shall be allocated in suitable method. The allocation can be determined based on their useful life or the volume of products, services that those tools and supplies produced in each period:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 623, 627, 641, 642,... Cr. 242 - Long term prepaid expenses 4. Record the acquisition of fixed assets and investment property in deferred, instalment method: When acquired tangible assets, intangible assets or investment property in deferred, instalment method and used them for production, business, or held for capital appreciation or for operating lease: Dr. 211, 213, 217 Historical cost - at sight price Dr. 133 - VAT deductible If any Dr. 242 - Long term prepaid expenses The interest expense from deferred payment is the Difference between the total payment minus - the at sight payment price minus - VAT If any Cr. 331 - Trade payables Total amount . Periodically, when pay to the sellers, the accountant records: Dr. 331 - Trade payables Cr. 111, 112 The periodic payment including the principal amount and interest expenses created from the deferred, instalment method . Periodically, the payment of interest expenses created from the deferred and instalment method are allocated to expenses: Dr. 635 - Financial expenses Cr. 242 - Long term prepaid expenses fixed 5. Record of the expenses for renovation of fixed assets incurred once with high value that the company has not provided the provisions for, then allocated in years when the renovation completed: 5.1. Transfer the renovation expenses to account long term prepaid: Dr. 242 - Long term prepaid expenses. Cr. 241 - Construction in progress 2413 5.2. Periodically, the renovation expenses for fixed assets are allocated to production, business expenses in the fiscal year: Dr. 623, 627, 641, 642,... Cr. 242 - Long term prepaid expenses 6. Record of initial direct expenses with high value involving in fixed assets under operating lease that should be allocated in years: Dr. 242 - Long term prepaid expenses Cr. 111, 112, 331,... Periodically, the initial direct expenses involving in the operating lease of fixed assets are allocated matching with the recognition of revenue:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 627 - Factory overhead costs Cr. 242 - Long term prepaid expenses 7. When foreign exchange differences incurred and resulted from revaluation of monetary items in foreign currencies if loss on foreign exchange differences is substantial in construction investment pre-operating period when completed, are transferred to long term prepayment for gradual allocation into financial expenses: Dr. 242 - Long term prepaid expenses Cr. 413 - Foreign exchange differences 4132 8. Periodically, record the allocation into financial expenses of foreign exchange differences incurred and resulted from revaluation of monetary items in foreign currencies in construction investment pre-operating when completed: Dr. 635 - Financial expenses the loss Cr. 242 - Long term prepaid expenses 9. Record of the payment in advance to the lender for interest expenses on long term loans: lender Dr. 242 - Long term prepaid expenses Cr. 111, 112,... Periodically, record the allocation of the interest expenses for the current period to financial expenses or capitalize into construction in progress: Dr. 635 - Financial expenses If the interest expenses are recorded into production, business expenses in the period Dr. 241 - Construction in progress If the interest expenses are capitalized into construction in progress Dr. 627 - Factory overhead costs If the interest expenses are capitalized into construction in progress Cr. 242 - Long term prepaid expenses 10. When the company issues bonds at the face valu to obtain capital and pays the interest on value bonds in advance at the issuance date, the inte interest expenses shall be debited to account 242 details by prepayment of interest on each bond and then allocated into expenses. each At the time of issue of bonds: Dr. 111, 112 Actual amount Dr. 242 - Long term prepaid expenses details by prepayment of interest on each bond Cr. 3431 - Value of securities Periodically, record the allocation of the prepayment of interest on bond into financial expenses for the current period: Dr. 635 - Financial expenses If recorded into financial expenses in the current period Dr. 241 - Construction in progress If capitalized into construction in progress Dr. 627 - Factory overhead costs If capitalized into value of work in progress Cr. 242 - Long term prepaid expenses details by prepayment of interest on each bond the allocation amount of interest expense in the current period
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 11. Record of expenses incurred when issuing the Company bonds: If expenses for issuing bond are low value, the accountant records into expenses in the period: Dr. 635 - Financial expenses Cr. 111, 112,... If expenses for issuing bond are highly value, the accountant record for allocation gradually: Dr. 242 - Long term prepaid expenses details for expenses of issuing bonds Cr. 111, 112,... nds Periodically, the expenses for issuing bonds shall be allocated to expenses: Dr. 635, 241, 627 The allocation amount in the current period Details Cr. 242 - Long term prepaid expenses Details of expenses for issuing bonds . investment 12. Accounting for expenses involving in investment property after the initial recognition: Record of expenses with high value involving in investment property after the initial recognition that does not satisfy the recognition criteria to increase the historical cost of the assets that should be allocated in years: Dr. 632 - Cost of goods sold Details in expenses created from investment property Dr. 242 - Long term prepaid expenses If expenses with high value Cr. 111, 112, 152, 153, 334, investment Periodically, the expenses involving in investment property after initial recognition shall be allocated into business expenses in the current period: Dr. 632 Allocation of expenses involving in the investment property after initial recognition in the current period Cr. 242 - Long term prepaid expenses 13. When the business combination does not lead to the parent-subsidiary relationship net asset acquisition but creates the goodwill at the date of transaction: If the acquirer makes the payment in cash or cash equivalents for the acquisition: Dr. 131, 138, 152, 153, 155, 156, 211, 213, 217 Fair value of acquired assets Dr. 242 - Long term prepaid expenses Details of goodwill Cr. 311, 331, 341, 342 Fair value of payables and contingent liabilities Cr. 111, 112, 121 Amount of cash and cash equivalents that the acquirer paid If the acquirer issues shares for the acquisition: Dr. 131, 138, 152, 153, 155, 156, 211, 213, 217, Fair value of acquired assets Dr. 242 - Long term prepaid expenses Details of goodwill Dr. 4112 - Capital surplus Difference between the lower fair value and par value of shares if the fair value of shares is lower than their par value Cr. 4111 - Share capital Par value
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 311, 315, 331, 341, 342, Fair value of payables and contingent liabilities Cr. 4112 - Capital surplus Difference between the fair value and the par value of the shares if the fair value of shares is higher than their par value

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 243 DEFERRED TAX ASSETS This account records current value and the increases, decreases of deferred tax assets. Deferred tax assets are calculated as following: Deferred tax assets = Differences temporarily deductible + The carry forward of unused tax losses and unused tax credits X Current EIT rate %

THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. A deferred tax asset should be recognized for the carry forward of unused tax losses and for probable unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilized. 2. At the end of a year, the accountant prepares a Details of differences temporarily deductible , the Details of unused differences temporarily deductible . The carry forward of for unused tax losses and unused tax credits as a base for preparation of the Details of deferred deferred tax assets in order to record the value of deferred tax assets or reversed amount in the current year. 3. The value of deferred tax assets in the year is calculated according to offset of deferred tax assets incurred in the year and the income tax that has been recorded in previous years but is returned in the year as follows: higher If the deferred tax assets created in a year is higher than the deferred tax assets reversed in the year, the difference is recorded as deferred tax assets and reduced the deferred income tax expenses. lower If the deferred tax assets created in a year is lower than the deferred tax assets reversed in the year, the difference is reduced the deferred tax assets and increased the deferred income tax expenses.

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rred deductib 4. The accountant must reverse deferred tax assets when deductible temporary differences do not influence on the taxable income when the assets are taken back or the liabilities are paid partly or all . 5. At the end of a fiscal year, the company has to revalue deferred tax assets that have not yet been recorded in previous years to the extend that it is probable that future taxable profit will be available to record additions into the current year. 6. Deferred tax assets are created in major cases: Deferred tax assets created from differences temporarily deductible since depreciation of fixed assets in accounting purpose is faster than in tax purpose. Deferred tax assets created from differences temporarily deductible because of recording an amount of cost in the current year that is only deducted from taxable income in the next year.
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC For example, the provision for repairing of fixed assets recorded in the current year shall be only deducted into taxable income of the year that those expenses actually occurred. Deferred tax assets are calculated based on the deducted value of the carry forward of tax loss and unused tax credits.

STRUCTURE AND CONTENTS OF ACCOUNT 243 - DEFERRED TAX ASSETS Debit: Increase of deferred tax assets. Credit: Decrease of deferred tax assets. Debit balance: Remain of deferred tax assets at the end of the period. MAJOR TRANSACTIONS At the end of the year, based on the Details of deferred tax assets prepared, the accountant records or reverses deferred tax assets created from transactions recorded into deferred tax assets: 1. If the deferred tax assets created in a year is higher than the deferred tax assets returned in the higher year, the accountant records the additional amount of deferred tax assets being the difference of the deferred tax assets created and the amount returned in the year: Dr. 243 - Deferred tax assets Cr. 8212 - Deferred income tax 2. If the deferred tax assets created in a year is lower than the deferred tax assets returned in the lower year, the accountant reduces the deferred tax assets as the difference between the deferred tax assets assets created and the amount returned in the year: Dr. 8212 - Deferred income tax Cr. 243 - Deferred tax assets

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 244 LONG TERM DEPOSITS This account reflects the money or assets which an entity deposits at other entities or economic organizations in the term of over one year or one normal production, business cycle. The money or assets deposited should be kept track of and collected when the term expired. STRUCTURE AND CONTENTS OF ACCOUNT 244 - LONG TERM DEPOSITS Debit: The money or assets used for long term deposits. Credit: The amount being deducted from long term deposits and recorded into other expenses; deposits The value of money or assets used as long term deposits being reduced when being collected;

Debit balance: Assets or money are reflected on the balance sheet as long term deposits. MAJOR TRANSACTIONS 1. Use of money, valuable metal, gemstone for long term deposits: Dr. 244 - Long term deposits Details in each kind Cr. 111 Cash on hand 1111, 1112, 1113 Cr. 112 Cash in bank 1121, 1122, 1123 2. Collection of money or assets as long term deposits: Dr. 111 - Cash on hand 1111, 1112, 1113 Dr. 112 - Cash in bank 1121, 1122, 1123 Cr. 244 - Long term deposits 3. When the company is fined and deducted from the value of long term deposits: Dr. 811 Other expenses Cr. 244 - Long term deposits

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC CATEGORY 3 LIABILITIES This account records liabilities which occur in the course of doing business. The company must pay the amount of the liability to its creditors. Liabilities consist of loans and borrowings, trade payables, taxes payable, payables to employees and other payables. Liabilities include current liabilities and non-current liabilities. 1. Current liabilities: liabilities which the company must settle within one year or within a business operation cycle. Current liabilities include: Short term loan; Current portion of long term loans; Trade payables; Taxes payable to the State; Salaries and allowances payable to employees; Accruals; Receipts of short term deposits; and Other payables.

2. Non-current liabilities: liabilities that are not due for at least one year. Non-current liabilities include: Long term loans for investment and development:; Long term notes payable: Bonds payable; Long term deposits which the company has received; Deferred tax liabilities; Provision for severance allowance; and Provisions.

THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS REGULATIONS: 1. Companies must keep detailed records with respect to their liabilities. Companies must keep track of the amounts payable to each individual creditor. 2. Liabilities must be classified as current or non-current depending on their terms. 3. Liabilities in gold, silver, precious metals or gemstones must be accounted for in detail. Records must include the individual creditor and such information as the quantity and value. 4. At the end of the fiscal year the balance of the liabilities in foreign currencies must be revalued using the exchange rate as regulated. 5. With respect to creditors who the company permanently transacts with or have large balances, the accountant must control and reconcile the liabilities incurred with the individual creditors and must periodically get written confirmation from the creditors.
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 6. Usually liability accounts have credit balances. However there may be cases where the individual creditor balances in the accounts 331, 333, 334, 338 are debits indicating that the paid amount greater than the payable amount. At the end of the accounting period in order to prepare the financial statements, it is permitted to report the debit balance as an asset and the credit balance as a liability in the balance sheet. Liabilities have been split into four major accounts with sixteen sub-accounts: Accounts 31- Short term loans have two sub-accounts: Account 311- Short term loan Account 315- Current portion of long term loan Account 33- Current account payables have seven sub-accounts: Account 331- Trade payable Account 333- Tax and statutory obligations Account 334- Payable to employees Account 335- Accruals Account 336- Inter-company payable Account 337- Construction contract payables based on agreed progress billing Account 338- Other payables Account 34 - Non-current liabilities have five sub-accounts: Account 341- Long-term loans Account 342- Long-term payable Account 343- Debt securities Account 344- Receipts of long-term deposits Account 347-Deferred tax liabilities Account 35 - Provisions have two accounts: Account 351- Provision for severance allowance Account 352- Provisions

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 311 SHORT TERM LOANS This account records the amount of the short term borrowings and repayments by a company. Short term borrowings include: borrowings from the bank; borrowings from entities or individuals both inside and outside the company. Short term borrowings are liabilities which are due within one year or within a normal business operation cycle or within a fiscal year. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS: 1. The accountant must keep detailed records with respect to amounts borrowed amounts repaid principal and interest and the outstanding balance which must be repaid to each creditor or balance to each borrowing contract. 2. If the funds borrowed are in a foreign currency, the accountant must keep track details of the original currency. Loan or repayment in foreign currency should be converted into Vietnam foreign Dong using either the actual exchange rate or average inter-bank exchange rate on foreign currency market announced by the SBV at the date of transaction or the exchange rate of date accounting book debit balance of account 331 is converted into VND using the exchange rate of accounting book while credit balance of account 331 is converted into VND using the average inter-bank exchange rate . Foreign exchange difference resulted from difference of resulted exchange rates when loans occurred and when loan payment and foreign exchange difference resulted from revaluation of loans in foreign currency at the end of the fiscal year in the currency course of doing business are recorded into financial expenses or financial income of the financial reporting period. STRUCTURE AND CONTENTS OF ACCOUNT 311 - SHORT TERM LOAN Debit: The amount of short term loan repaid. Decrease in short term loans due to a decrease in exchange rates loan is in a foreign currency

Credit: The amount of short term loans; Increase in short term borrowings due to the increase in exchange rates loan is in a foreign currency .

Credit balance: The amount of short term loans that have not been paid.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC MAJOR TRANSACTIONS 1. To record the loan to buy raw materials, supplies and merchandise goods: a. Raw materials, supplies and merchandise goods purchased are used in production of goods and services subject to VAT in subtraction method: Dr. 152 - Raw materials purchased price not including VAT Dr. 153 - Tools and supplies purchased price not including VAT Dr. 156 - Merchandise inventory purchased price not including VAT Dr. 133 - VAT deductible 1331 Cr. 311 - Short term borrowings total payment b. If raw materials, supplies and merchandise inventory purchased are used in production of goods and services not subject to VAT or subject to VAT in direct method, value of raw materials, supplies merchandise inventory includes VAT total payment : Dr. 152 - Raw materials total payment Dr .153 - Tools and supplies total payment Dr. 156 - Merchandise goods total payment Cr. 311 - Short-term loans total payment 2. The company has buying or selling contracts in which payment term is made by Letter of Credit. Enterprise borrows money from the bank to open Letter of Credit: Dr. 144 Short-term deposits, mortgages and collateral deposits, Cr. 311 Short-term loans 3. To record borrowings to repay suppliers, paid long-term loans, paid long-term payable: Dr. 331 - Trade payables Dr. 315 - Current portion of long-term loan Dr. 341 - Long-term loans Dr. 342 - Long-term payable Cr. 311 Short-term loans 4. Borrowings in foreign currency to pay supplie suppliers, customers, long-term loans, long-term payable must be converted into VND using the actual exchange rate or average inter-bank exchange rate at the date of transaction. a. When actual exchange rate or average inter-bank exchange rate is less than exchange rate of accounting book: Dr. 331 Trade payables using the exchange rate of accounting book Dr. 315 - Current portion of long-term loan using the exchange rate of accounting book Dr. 341 - Long-term loans using the exchange rate of accounting book Dr. 342 - Long-term payable using the exchange rate of accounting book Cr. 311 - Short-term loan using the actual exchange rate or average inter-bank exchange rate Cr. 515 - Financial income Difference of actual exchange rate or average inter-bank exchange rate and the exchange rate of accounting book

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC b. When actual exchange rate or average inter-bank exchange rate is greater than exchange rate of accounting book: Dr. 331 - Trade payables using the exchange rate of accounting book Dr. 315 - Current portion of long-term loan using the exchange rate of accounting book Dr. 341 - Long-term loans using the exchange rate of accounting book Dr. 342 - Long-term payable using the exchange rate of accounting book Dr. 635 - Financial expenses difference of the actual exchange rate or average inter-bank exchange rate and the exchange rate of accounting book Cr. 311 - Short-term loan current exchange rate or inter-bank average exchange rate 5. Borrowing money for cash on hand or put in bank: Dr. Accounts - 111, 112... Cr. 311 - Short-term loan 6. When borrowing foreign currency in short - term to buy raw materials, merchandise goods to go warehouse or using or payment for lease services, record: Dr. Accounts - 152, 156, 627, 641, 642 using the actual exchange rate or average inter-bank exchange rate Cr. 311 - Short-term loan using the actual exchange rate or average inter-bank exchange exchange rate loan 7. When enterprise pay short-term loan by cash on hand, cash in bank: Dr. 311 - Short-term loan Cr. 111, 112 8. To record the repayment of borrowings in cash on hand or cash in bank in local or foreign currencies in the course of business: a. Loss of foreign exchange difference: Dr. 311 Short-term loan using exchange rate of accounting book in the account 311 Dr. 635 Financial expenses loss of foreign exchange difference Cr. 111 1112 , 112 1122 using exchange rate of accounting book in the accounts 1112, 1122 b. Gain of foreign exchange difference: Dr. 311 Short-term loan using exchange rate of accounting book in the account 311 Cr. 515 Financial income gain of foreign exchange difference Cr. Accounts 111 1112 , 112 1122 using exchange rate of accounting books in the accounts 1112, 1122 9. To record the repayment of short-term loan in cash on hand or cash in bank in local or foreign currencies in construction stage pre-operating a. Loss of foreign exchange difference: Dr. 311 Dr. 413 Short-term loan using the exchange rate of accounting book in the account 311 Foreign exchange differences 4131 Loss of foreign exchange difference
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 111 1112 , 112 1122 1112, 1122 . using the exchange rate of accounting book in the accounts

b. Gain of foreign exchange difference: Dr. 311 Short-term loan using the exchange rate of accounting book in the account 311 Cr. 413 Foreign exchange differences 4131 gain of foreign exchange difference Cr. 111 1112 , 112 1122 using the exchange rate of accounting book in the accounts 1112, 1122 . 10. At the end of the fiscal year, the balance of the loan in foreign currency can be revalued using the average inter-bank exchange rate announced by SBV at end of the fiscal year: a. Gain of foreign exchange difference: Dr. 311 Short-tem loan Cr. 413 - Foreign exchange differences b. Loss of foreign exchange difference: Dr. 413 Foreign exchange differences Cr. 311 Short-term loan

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 315 CURRENT PORTION OF LONG-TERM LOAN This account records the current-portion of long-term loans that is due in the accounting period but have not paid yet; and portion of long-term loan that must be paid in the next fiscal year and the repayment of these loans. The current portion of a long tem loan is the amount of the loan that must be paid within the current accounting period. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS ack 1. At the end of the fiscal year, based on pay-back schedules, the company must determine the portion of long term liability that will be due in the next accounting period and reclassify it into Current portion of long term loan. 2. The accountant must keep track of the Current portion of long term loan in detail by Current individual creditor, including the amounts which have been paid and the balance remaining. They must also keep track of each foreign currency loan by creditor and convert these loans currency into VND based on the exchange rate at the date of transaction using the actual exchange date rate or average inter-bank exchange rate in the foreign currencies market announced by the SBV at the transaction date . The credit balance of the account 315 should be converted into balance VND using the exchange rate of accounting book. The realized foreign exchange difference in the course of business and unrealized foreign exchange differences resulted from foreign revaluation of the balances in foreign currencies at the end of the fiscal year applying to both entities in construction stage and entities operating in construction are recorded to the operating financial expenses or financial income of the income statement. STRUCTURE AND CONTENTS OF ACCOUNT 315 – LONG-TERM LOAN Debit: Current portion of long term loan which have been paid; Loss of foreign exchange difference resulted from revaluation of balance of long-term loan in foreign currency at the end of the fiscal year.

Credit: Current portion of the long term loan which is due; Gain of foreign exchange difference resulted from revaluation of balance of long term loan in foreign currency at the end of the fiscal year.

Credit balance: The remaining balance of the current portion long term loan that must be paid or is past due.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC MAJOR TRANSACTIONS 1. At the end of the fiscal year, the accountant determines the Current portion of long term loan which will be due in the next year: Dr. 342 - Long term payable Cr. 315 - Current portion of long term loan 2. To record payment of the current portion of long term loans in cash on hand or cash in bank: Dr. 315 Current portion of long term loans Cr. 111, 112, ... 3. To record the repayment of the current portion of long term loan by foreign currency in the course of doing business: If the exchange rate recorded in account 315 is lower than the exchange rate recorded in accounts 111, 112: Dr. 315 Current portion of long term loan using the exchange rate of accounting book Dr. 635 Financial expenses loss of foreign exchange difference Cr. 111 1112 , 112 1122 using the exchange rate of accounting book If the exchange rate recorded in account 315 is greater than the exchange rate recorded in accounts 111, 112: Dr. 315 Current portion of long term loan using the exchange rate of accounting book Cr. 515 Financial income gain of foreign exchange difference Cr. 111 1112 , 112 1122 using the exchange rate of accounting book 4. To record repayment of the current portion of long term loan for capital construction in foreign currencies in pre-operating stage: If the exchange rate recorded in account 315 is lower than the exchange rate recorded in the accounts 111,112: Dr. 315 Current portion of long term loan using the exchange rate of accounting book l Dr. 413 Foreign exchange differences loss of foreign exchange difference Cr. 111 1112 , 112 1122 using the exchange rate of accounting book If the exchange rate recorded in account 315 is greater than the foreign exchange rate recorded in accounts 111, 112: Dr. 315 Current portion of long term loans using the exchange rate of accounting book Cr. 413 - Foreign exchange differences gain of foreign exchange difference Cr. 111 1112 , 112 1122 using the exchange rate of accounting book 5. To record the repayment of the current portion of long term loan by cash collected from receivables, or new short term borrowings: Dr. 315 Current portion of long term loans Cr. 131, 138 Cr. 311 Short-term loans
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6. At the end of the fiscal year, the balance of the current portion of long term loan in foreign currency can be revalued based on the average inter-bank exchange rate announced by the SBV at the end of the fiscal year: Gain of foreign exchange differences: Dr. 315 Current portion of long term loans Cr. 413 Foreign exchange differences Loss of foreign exchange differences: Dr. 413 Foreign exchange differences Cr. 315 Current portion of long-term loans

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 331 TRADE PAYABLES This account records the settlement of the amounts payable by the company to suppliers of raw materials and merchandises and services according to the economic contracts signed. This account also records the settlement of amounts payable to construction contractors and subcontractors. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Payables to suppliers of raw materials, goods, services or construction contractors and subcontractors must be recorded in detail by individuals. The records must show the amount due to each individual supplier and also show the amounts paid in advance to the sellers, suppliers ounts or contractors but for which the company has not received the goods, services, or completed construction work. 2. The accountant would not record the purchase of raw materials, merchandise goods and services that were paid in cash e.g. cash on hand, cheque or paid through the bank . 3. In the case, the raw materials, merchandise goods and services were received but the company has not received the official invoice at the end of the month, the accountant should record the cost of the purchase in its books at an estimated cost and make adjustment according to the invoice or official notice from the seller when received. 4. When recording this account, the accountant must keep track of and classify the transactions into proper accounts such as payment discounts, sales discounts, sales allowances that are discounts, offered by the suppliers or sellers. STRUCTURE AND CONTENTS OF ACCOUNT 331 - TRADE PAYABLES ACCOUNT Debit: Amount paid to sellers of goods and raw materials and suppliers of services and construction materials contractors; Amount paid in advance to the sellers, suppliers or contractors but for which the company has not received the goods, services, or completed construction work; Amount of purchase allowances offered by the supplier according to the contract; The amount of purchase discounts that seller agreed to deduct for credit; Value of raw materials and goods that was lost or poor in quality then were returned to the sellers.

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Credit: Amount must be paid to sellers, suppliers and contractors for raw materials, goods and services; The adjustments from temporary cost to current cost of raw materials, merchandise and services when the official invoice or notice has been received.
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Credit balance: The amounts payable to suppliers, sellers and contractors.

This account can have a debit balance. A debit balance if any shows the amount of advances to creditors or the overpayment by details of individuals. When preparing the balance sheet, the accountant must reclassify these debit balances to an asset account and credit balance to the liabilities account. MAJOR TRANSACTIONS 1. To record the receipt of purchased raw materials and goods that have not been paid or gnment purchased goods that are transferred for consignment and not through the company's premise under perpetual inventory method. 1.1. The enterprise paid VAT in subtraction method Raw materials and goods purchased are used for production of goods and services subject to VAT in subtraction method: Dr. 152 Raw materials purchased price not including VAT Dr. 153 Tools and supplies purchased price not including VAT Dr. 156 Merchandises good purchased price not including VAT Dr. 157 Goods on consignment purchased price not including VAT Dr. 133 - VAT deductible 1331 Cr. 331 Trade payables Total amount If raw materials and goods purchased are used for production of goods and services not subject to VAT or subject to VAT in direct method, the value of raw materials and goods includes VAT total amount : Dr. 152 Raw materials Dr. 153 Tools and supplies Dr. 156 Merchandise goods Cr. 331 Trade payables 1.2. When the enterprise paid VAT in direct method, the value of raw materials and goods includes VAT total amount : Dr. 152 Raw materials Dr. 153 Tools and supplies Dr. 156 Merchandise goods Cr. 331 Trade payables 2. To record the receipt of purchased raw materials and goods that have not been paid or purchased goods that are transferred for consignment and not through the company's premise under periodic inventory method. 2.1. The enterprise paid VAT in subtraction method: Raw materials and goods purchased are used for production of goods and services subject to VAT in subtraction method:
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Dr. 611 - Purchase Purchased price not including VAT Dr. 133 VAT deductible 1331 Cr. 331 Trade payables Total amount If raw materials and goods purchased are used for production of goods and services not subject to VAT or subject to VAT in direct method, the value of raw materials and goods includes VAT total amount : Dr. 611 - Purchase Total amount Cr. 331 Trade payables Total amount 2.2. The enterprise paid VAT in direct method. The value of raw materials and goods purchased is the total amount: Dr. 611 - Purchases Total amount Cr. 331 Trade payables Total amount 3. For acquisition of fixed assets which have not been paid to sellers and are used for production payables of goods and services, the accountant records payables based on invoice issued by the sellers, handover minute of the fixed assets and other related documents. In the case, the enterprise paid VAT in subtraction method: If fixed asset acquired are used for production of goods and services subject to VAT in subtraction method: Dr. 211 Tangible assets Purchased price not including VAT Dr. 213 - Intangible assets Purchased price not including VAT Dr. 133 VAT deductible 1332 Cr. 331 Trade payables Total amount If fixed asset acquired are used for production of goods and services not subject to VAT or value subject to VAT in direct method, the value of raw materials and goods purchased includes VAT total amount : Dr. 211 Tangible assets Dr. 213 - Intangible assets Cr. 331 Trade payables 4. The enterprise has construction in progress and has sub-contractors working in the project. When the sub-contracted work is completed and the sub-contractor handover the work to the contractor, the accountant records payables based on the contract, handover minute and the invoice received. If the construction will be used for production of goods and services subject to VAT in subtraction method, the accountant records as follows: Dr. 241 Construction in progress Price not including VAT Dr. 133 VAT deductible Cr. 331 Trade payables Total amount If the construction will be used for production of goods and services not subject to VAT or subject to VAT in direct method, the value of construction includes VAT total amount :
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Dr. 241 Construction in progress Cr. 331 Trade payables When the enterprise paid VAT in direct method, the value of construction includes VAT total amount : Dr. 241 Construction in progress Cr. 331 Trade payables 5. The enterprise employs services e.g. transportation, electricity, water, telephone, audit, consulting, advertisement, other services expenses . The value of these services could include or not include VAT depending on VAT method that the enterprise applied: Dr. 156 Merchandise goods 1562 Dr. 241 Construction in progress Dr. 142 Prepaid expenses Dr. 242 Long-term prepaid expenses Dr. 623, 627, 641, 642, 635, 811 Dr. 133 VAT deductible 1331 if any Cr. 331 Trade payables Total amount 6. To record the payment to the sellers, suppliers, constructors: Dr. 331 Trade payables Cr. 111, 112, 311, 341,... sellers, 7. To record the advances made to sellers, suppliers and contractors: Dr. 331 Trade payables Cr. 111, 112,... 8. To record the collection of an advance from the supplier who could not deliver the goods: Dr. 111, 112,... Cr. 331 Trade payables 9. To record purchase discounts that the enterpri enjoyed due to payment before due and enterprise deducted into payable amount: Dr. 331 Trade payables Cr. 515 Financial income 10. To record the received raw materials and merchandises that then were returned due to poor quality and deducted into payable amount: Dr. 331 Trade payables Cr. 133 VAT deductible 1331 if any Cr. 152, 153, 156, 611,... 11. The seller agreed to reduce the price for of the purchased raw materials and merchandise that were poor in quality and still in the stock:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 331 Trade payables Cr. 152, 153, 156,... reduced amount Cr. 133 VAT deductible 1331 if any 12. This would be used to record those trade payables in which the creditors do not want to be paid or could not be addressed. The accountant should record to other income: Dr. 331 Trade payables Cr. 711 Other income 13. The accountant has to determine the completed construction volume that must be paid to subconstructor according to the sub-contracting contract that were signed by both parties that the VAT amount on the completed construction volume is credited or not credited. Based on invoice, payment request, finalization report of completed construction work and the subcontracting contract, the accountant records as follows: Dr. 632 Cost of good sold price not including VAT Dr. 133 VAT deductible 1331 Cr. 331 Trade payables Total amounts including VAT that must be paid to subcontractors 14. The enterprise is an agent that sells goods at nominated price for commission When receiving goods for consignment, the accountant debits the account 003 - Goods received on consignment for sale Off balance sheet accounts at the nominated price given by the supplier . When selling goods: Dr. 111, 112, 131,... Cr. 331 Trade payables at the nominated price Simultaneously, a credit is recorded to account 003 Goods received on consignment for sale Off balance sheet accounts at the nominated price . When commission is determined, the sales of goods on consignment is recognized as follows: Dr. 331 Trade payables Cr. 511 - Sales Cr. 3331 - Tax and statutory obligations if any When payment was made to the agent: Dr. 331 Trade payables Amount less commission Cr. 111, 112,... 15. Accounting for trade payables at the import consignor: 15.1. To record advances made to the import consignee to open Letter of Credit complying with the consigment contract: Dr. 331 Trade payables Details by consignees Cr. 111, 112,...
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15.2. When receiving goods that were returned by import consignee, the accountant records cost of imported goods, import duties, import VAT, special consumption tax, if any based on invoices of the consignee and relevant documents. There are two cases as follows: a. In the case, imported goods used for production of goods and services are subject to VAT in subtraction method, the VAT import will be deducted. If the import consignee paid taxes to the State Treasury on behalf of the consignor i.e. import duties, VAT, special consumption tax : Dr. 151, 152, 156, 211, 611 Cost of imported goods not including import VAT Dr. 133 VAT dedutible Cr. 331 Trade payables detail by consignees If the import consignee performed tax declaration while the consignor paid taxes to the State itself, the value of imported goods are determined as similar to the case in which the import determined consignee paid taxes on behalf of the consignor as similar to above entry . When payment is made to the State, the accountant records: Dr. 331 Trade payables Details by the consignees Cr. 111, 112,... b. In the case, the imported goods used for production of goods and services are not subject to production VAT or subject to VAT in direct method or used for State activities or projects that were funded by State Budget, the VAT import should not be deducted. - If the import consignee pays taxes to the State Treasury on behalf of the consignor. Dr.151, 152, 156, 211 Cost of imported goods including taxes that must be paid Cr. 331 Trade payables Details by consignees If the import consignee performed tax declaration while the consignor paid taxes to the State itself, the value of imported goods are determined as similar to the case in which the import determined consignee paid taxes on behalf of the consignor as similar to above entry . When payment is made to the State, the accountant records: Trade payables Details by import consignees Cr. 111, 112,...

Dr. 331

15.3. To record consignment fee that must be paid to the import consignee: Dr. 151, 152, 156, 211,... Dr. 133 VAT deductible Cr. 331 Trade payable Details by import consignees 15.4. To record amount of money that must be paid to the import consignee for its payment relating to consignment activities on behalf of the consignor. Dr. 151, 152, 156, 211,... Dr. 133 VAT deductible if any Cr. 331 Trade payables Details by import consignees
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 15.5. To record payment made to the import consignee for the remaining balance, import duties, special consumption tax if the import consignee paid to the State Treasury on behalf of the consignor , consignment fee and other amounts that was paid by the consignee on behalf of the consignor: Dr. 331 Trade payables Details by the import consignees Cr. 111, 112,... 15.6. The import consignee returns the goods on consigment of which VAT haven t been paid. a. When received goods, based on goods dipatch note cum internal transport note of the import consignee, the accountant shall record cost of goods on consigment at the prices including VAT of import goods: Dr. 152, 156, 211 Cost of import goods including tax that must be paid to State Cr. 331 Trade payables Details by import consignees b. When received VAT invoice of goods on consignment of the import consignee, the accountant consignment should reflect VAT dedutible. - In the case, imported goods on consignment was still in the stock: consignment Dr. 133 VAT dedutible Cr. 152, 156, 211,... - In the case, goods on consigment were sold: sold Dr.133 VAT dedutible Cr. 632 Cost of goods sold

16. Recording account trade receivable at export consignee 16.1. When receipt goods of consigner on exporting, based on relevant documents to debit exporting, account 003 - Goods received on consignment for sale. 16.2. When goods was exported, based on relevant documents to record: a. Record receivable that will be collected on behalf of the consignor: Dr. 131 Account receivable - trade Detail of each of foreign costumers Cr. 331 Trade payables Detail of each of consigner on exporting At the same time cost of exported goods are credited to account 003 consignment for sale Off balance sheet accounts b. Export, import duties that was paid on behalf of consigner on exporting: Dr. 331 Trade payables Detail of each of consigner on exporting Cr. 338 Other payables 3388 Detail of payables to the State c. Special consumption tax that was paid on behalf of consigner on exporting: Dr. 331 Trade payables Detail each of consigner on exporting
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 338 Other payable Detail of payables to the Sate 17. At the end of the fiscal year, the balance of the trade purchases in foreign currency can be revalued based on the inter-bank average exchange rate that SBV issued at this time: - To record foreign exchange difference because inter-bank average exchange rate that SBV issued at this time is lower than the exchange rate used in accounting book of account 331: Dr. 331 Trade payables Cr. 413 Foreign exchange difference 4131, 4132 - To record foreign exchange difference because inter-bank average exchange rate that SBV issued at this time is greater than exchange rate used in accounting book of account 331: Dr. 413 Foreign exchange differences 4131, 4132 Cr. 331 Trade payables - Foreign exchange difference because of purchases in foreign currency are revalued based on purchases exchange rate at the end of period as guided account 413.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 333 FEES, DUTIES AND OTHER OBLIGATIONS This account is used to reflect the relation between the company and the State relating to the taxes, fees, duties and other payables. It also reflects the obligation and its fulfilment by the company for an accounting period. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. The company actively calculates and determines taxes and payables to the State based on the regulations of the current laws and records the amount of the taxes payable into its general ledger based on the notice of the tax department. Taxes payable are an obligation to the company. 2. The company must pay its taxes fees, duties to the State in full and on time. Any questions and claims if any about tax rates or taxes stated on the notice of the tax department must be solved on a timely bases. The State will accept no excuses for delayed payment. will 3. The accountant must maintain detailed sub-ledgers in order to keep track of taxes paid and taxes payable to the State. foreign 4. Companies who pay taxes to the State in foreign currencies must convert to VND in order to record the transaction into their accounting books if the books are recorded in VND . STRUCTURE AND CONTENTS OF ACCOUNT 333 - TAX AND STATUTORY OBLIGATIONS Debit: The amount of deducted VAT in the period; The amount paid to the State for taxes, fees, duties; The amount of tax deducted into tax payable; VAT on sales returns, sales with reduced price.

Credit: The amount of VAT output and VAT on imported goods; The taxes and payables owed to the State.

Credit balance: The tax, fees, duties and other payables to the State. In special cases, account 333 can have a debit balance. A debit balance if any shows that taxes have been overpaid or reflects the fact that the taxes have been exempted by the government and they will be refunded but they have not been refunded. is composed nine sub-accounts as follows:
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Account

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Account 3331 – VAT payables: to record VAT output, VAT payable on the imported goods, deducted VAT, paid VAT and VAT payable to the State. Account 3331 is composed two sub- accounts: Account 33311 – VAT output: to record the deducted VAT output, deducted VAT input, VAT on sales returned, VAT on sales with reduced price, VAT payment and VAT payable of goods, services in the period. Account 33312 – VAT on imported goods: to record the determined obligation and the payment for imported goods to the State.

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Account 3332 - Special consumption tax: to record the determin determined obligation and the payment for excise tax to the State. Account 3333 Import, export duties: to record the determined obligation and the payment for import and export duties to the State. Account 3334 to the State. Profit tax: to record the determined obligation and the payment for profit tax

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Account 3335 Personal income tax: to record the determined obligation and the payment for personal income tax to the State. Account 3336 - Natural resource tax: to record the determined obligation and the payment for natural resources tax to the State. tax: Account 3337 - Land and housing tax: to record the determined obligation and the payment for land and housing tax to the State. Account 3338 - Other taxes payable: to record the determined obligation and the payment for other taxes payable which are not recorded into these accounts above such as: business tax, tax payment on behalf of foreign organizations, indi gn individuals doing business in Vietnam. This account must have sub-ledgers to record in detail. Account 3339 - Fees, duties and other obligations: to record the determined obligation and the payment for fees, duties and other obligations to the State which are not recorded into accounts 3331 to 3338. This account also records the amounts that the State grants to the company if any such as compensation for prices.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC MAJOR TRANSACTIONS I. VAT payable (3331) A. Accounting for VAT output (Account 33311) 1. Determine the VAT output when selling products and services: When selling products and services subject to VAT in subtraction method, the company must pay the VAT as subtraction method and issue VAT invoice. On the invoice, it must be noted the price has not yet included VAT, charges and surcharges if any , VAT amount and total value. The accountant records revenue from selling goods and services at the price not including VAT and VAT amount: Dr. 111, 112, 131... Total amount Cr. 3331 - VAT payable 33311 Cr. 511 Sales price not including VAT Cr. 512 - Inter-company revenue price not including VAT 2. The entity has operating lease of tangible, intangible assets or investment property the operating lease assets . The entity receives lease fee in advance for several periods. The lease revenue of the current period shall be recognized at the total amount divided by lease terms that the entity received money in advance. Revenue from operating lease of tangible, intangible assets is credited to account 5113 Sales from services . Revenue from operating lease of investment services property is credited to account 5117 Sales from property investment . 2.1. When the company paid VAT in subtraction method: - When received the payment for lease of long-term assets: Dr. 111, 112 Total amount received Cr. 3387 - Deferred income price not including VAT Cr. 333 - Fees, duties and other obligations 3331 - At the end of the accounting period, the accountant transfers deferred income from assets lease accountant to income for the current period: Dr. 3387 - Deferred income Cr. 511 - Sales 5113 Revenue from operating lease of tangible and intangible assets, 5117 - Sales from property investment . - In the next accounting period, the accountant transfers deferred income from assets leased to income for that period: Dr. 3387 - Deferred income Cr. 511 - Sales 5113, 5117 - The money that must be returned to the customers because of cancelling the contract if any : Dr. 3387 - Deferred income Price not including VAT Dr. 3331 - VAT VAT amount of deferred income Cr. 111, 112, Total amount returned .
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 2.2. The enterprise paid VAT in direct method: - When receiving the customers pre-paid for the activities of long-term assets lease: Dr. 111, 112,... Total amount received Cr. 3387 - Deferred income Total amount received . - At the end of the accounting period, the accountant allocates income from assets leased for the current period: Dr. 3387 - Deferred income Cr. 511 - Sales 5113 Income from operating lease of intangible and tangible assets; 5117 - Sales from property investment e record - At the balance sheet date, the accountant computes and records the VAT payable in direct method: Dr. 511 - Sales 5113, 5117 Cr. 3331 VAT payable - In the next accounting period, the accountant allocates income from assets leased for that a period: Dr. 3387 - Deferred income Cr. 511 - Sales 5113, 5117 - The money that must be returned to the customers because of cancelling the leasing contract of tangible, intangible assets or investment property if any : Dr. 3387 - Deferred income Cr. 111, 112, Total amount returned 3. For sales of goods on instalment plan or in deferred payment goods subject to VAT in subtraction method and the entity pays VAT in subtraction method , the accountant determines the revenue at the price of payment at sight excluding VAT and records the VAT amount as follows: Dr. 111, 112, 131,... Total amount Cr. 3331 - VAT payable 33311 Cr. 511 - Sales Price of payment at sight excluding VAT Cr. 3387 - Deferred income Interest income on outstanding instalment 4. For barter contract, the goods shall be recorded as similar to as the ones in a normal business contract the goods and services provided are recorded as sold while goods and services received are recorded as purchased . Parties shall issue invoices when sending out the goods and services for barter. Declaration and payment for tax obligations must be implemented as current regulations. 4.1. When bartering goods and services subject to VAT in subtraction method for other goods and services that shall be used in production of goods and services subject to VAT in subtraction method: - Based on VAT invoices when bartering goods, services, the accountant records the income from
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC goods, services and the VAT as follows: Dr. 131 - Accounts receivable Cr. 511 - Sales Price not including VAT Cr. 3331 - VAT payable 33311 VAT on goods, services received as barter - Based on VAT invoices when receiving materials, goods as barter, the accountant records the value of materials, goods and the deductible VAT input: Dr. 152, 153, 156,... Price not including VAT Dr. 133 VAT deductible VAT on materials, goods received as barter Cr. 131 - Accounts receivable. - In the case, the materials and goods received as barter are used for the production of goods and services not subject to VAT or subject to VAT in direct method, the VAT input of the goods mputed received received as barter will not be deducted but computed into the value of goods received: Dr. 152, 153, 156,... Total amount Cr. 131 - Accounts receivable Total amount .

5. Accounting for sales, liquidation of investment property: 5.1. Enterprise pays VAT in subtraction method: method Dr. 111, 112, 131 Total amount Cr. 5117 - Sales from property investment Price not including VAT Cr. 3331 - VAT payables 33311 5.2. Sales of investment property in deferred or late payment: payment a. Enterprise pays VAT in subtraction method: method: - When sell investment property on instalment, record the sales from property investment according to the at sight price, the difference between the instalment price and at sight price and between the VAT are recorded into account 3387 Deferred income : Dr. 131 Accounts receivable Cr. 5117 - Sales from property investment Cash sale not including VAT Cr. 3387 - Deferred income Difference between the instalment price and at sight price excluding VAT Cr. 3331 - VAT payables VAT output b. In case of selling investment property which are not subject to VAT or subject to VAT in direct method on instalment: - When selling investment property on instalment, recorded the sales from property investment of the period according to the at sight price, the difference between the instalment price and at sight price including VAT is recorded deferred income: Dr. 111, 112, 131 Cr. 5117 - Sales from property investment Cash sale including VAT Cr. 3387 - Deferred income Difference between the instalment price and the at sight
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC price including VAT . - At the balance sheet date, records the VAT payable in direct method: Dr. 5117 - Sales from property investment Cr. 333 - Tax and statutory obligations 3331 . 6. Selling at listed price through sale agents for enjoying commission: 6.1. Accounting at the entity sending goods to sale agent. When finalizing with the sale agents, the accountant records the sales and VAT payable as follows: Dr. Accounts 111, 112, 131 Total amount Cr. 3331 - VAT 33311 Cr. 511 - Sales Price not including VAT 6.2. Accounting at the sale agent: - Record receipts when goods sold: Dr. 111 , 112, 131 Total amount Cr. 331 Trade payable Total amount - Record the commission: Dr. 331 Trade payable commission received Cr. 511 - Sales the commission according to the price not including VAT Cr. 3331 VAT payables 7. Enterprise pays VAT in subtraction method and sold goods to its divisions and subsidiaries. 7.1. Where shipped the goods subject to VAT in subtraction method to its divisions and subsidiaries with the Goods dispatch note cum internal delivery note : - When shipped goods to its divisions and subsidiaries: Dr. 157 - Goods on consignment Cost of goods sold Cr. 155 - Finished goods Cr. 156 - Merchandise goods - When its divisions and subsidiaries sold the goods, the enterprise issues the VAT invoice and record sales and VAT amount based on the list of goods sold prepared by its divisions and subsidiaries: Dr. 111, 112, 136 Internal selling price including VAT Cr. 3331 - VAT payables 33311 Cr. 512 - Inter-company revenue Internal selling price not including VAT . 7.2. Selling goods subject to subtraction method VATto accounting dependent entities using VAT invoice. The accountant bases on the VAT invoice to record the sales and VAT payable: Dr. 111, 136 Internal sale price including VAT Cr. 3331 VAT payables 33311
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 512 - Inter-company revenue Internal sale price not including VAT 8. In case of sending out products, goods subject to subtraction method VAT for internal use, promotion, advertising or for production of goods, services subject to subtraction method VAT, the enterprise must prepare VAT invoices with clear explanation of goods used for internal purpose of production, promotion, advertising. The VAT invoice is used as accounting document. The enterprise gets VAT exemption for those transactions. - When send products, goods for internal purpose, promotion, advertising activities: Dr. 632 - Cost of goods sold Cr. 155 - Finished goods Cr. 156 - Merchandise goods. - Simultaneously, record inter-company revenue: Dr. 621, 623, 627, 641, 642,... Dr. 211 - Tangible assets If the finished products are used as fixed assets used in production, business operation Cr. 512 - Inter-company revenue according to production cost or cost of goods sold . 9. When sending out goods and merchandise subject to subtraction method VAT for internal use, promotion, advertising or for production of goods, services not subject to VAT or subject to VAT in direct method, the enterprise prepares the VAT invoice with clear explanation. The enterprise is still subject to VAT and record those amount in the production expenses. - When send out products, goods for internal spending: Dr. 632 - Cost of goods sold Cr. 155 - Finished goods Cr. 156 Merchandises goods. - Simultaneously, record inter-company revenue: Dr. 623, 627, 641, 642,... Cost of production or cost of goods sold plus + the VAT on goods for internal use ; or Dr. 211 Tangible assets if finished products used as fixed assets for production, trading activities Cost of production plus + the VAT on goods for internal use Cr. 333 - Tax and statutory obligations 33311 Cr. 512 - Inter-company revenue Cost of production or cost of goods sold 10. In case of using goods, products subject to subtraction method VAT for grant, donation purposes which using the bonus and welfare funds, the enterprise must prepare the VAT invoice with sufficient information of goods, products and VAT amount. In this case, the enterprise must pay VAT and does not get VAT deduction. - When send out products, goods to send as gifts, donation: Dr. 632 - Cost of goods sold Cr. 155 - Finished goods Cr. 156 Merchandises goods - Simultaneously record inter-company revenue:
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Dr. 431 - Bonus and welfare funds Total amount Cr. 3331 VAT 33311 VAT output Cr. 512 - Inter-company revenue Price not including VAT . 11. When use goods, products subject to subtraction method VAT for bonus or payment instead of salary for employees and other workforce, the enterprise must prepare VAT invoice or sales invoice with full information of contents and VAT calculation as normal VAT invoice. The enterprise must pay VAT and does not get VAT deduction. - When send out products, goods to pay to employees as bonus or replacement of salary: Dr. 632 - Cost of goods sold Cr. 155 - Finished goods Cr. 156 - Merchandise goods. - Simultaneously, record inter-company revenue: Dr. 334 Payable to the employees Cr. 512 - Inter-company revenue Cr. 333 - Tax and statutory obligations 33311 12. Sales returns: If the enterprise pays VAT in subtraction method and the goods returned subject to VAT in method subtraction method, the accountant shall record the payable to the customer, sales and VAT on sales returns: Dr. 531 - Sales returns Price not including VAT Dr. 3331 - VAT payable 33311 VAT on sales returns Cr. 111, 112, 131 Total amount - Simultaneously record the cost of goods returned: Dr. 155 Finished goods Dr. 156 - Merchandise goods Cr. 632 Cost of goods sold 13. The company pays VAT in subtraction method. When having income from financial activities and other income proceeds from disposal or sales of fixed assets subject to VAT in subtraction method, the accountant shall record the financial income and other income using price not including VAT: Dr. 111, 112, 138,... Total amount Cr. 3331 - VAT payable 33311 Cr. 515 - Financial income Price not including VAT Cr. 711 - Other income Price not including VAT 14. The company pays VAT in direct method and records the payable amount at the end of the period: - For production and business activities:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 511 - Sales Cr. 3331 VAT payable - For financial activities and other activities: Dr. 515 - Financial income Dr. 711 - Other income Cr. 3331 VAT payable 15. When pay the VAT to the State Budget: Dr. 3331 - VAT Cr. 111, 112,... B. Accounting for import VAT (Account 33312) 1. When importing materials, goods, fixed assets, the accountant records the payable import duties, total payables and the value of imported materials, goods, fixed assets not including import VAT : Dr. 152, 153, 156, 211, 611,... Cr. 333 Tax and statutory obligations 3333 Cr. 111, 112, 331,... Simultaneously recording the VAT on imported goods: - When materials, goods, fixed assets are imported for producing, selling goods, services subject to subtraction method VAT, the deductible import VAT: Dr. 133 VAT deductible Cr. 3331 - VAT payable 33312 - When materials, goods, fixed assets are imported for production of goods and services not subject to VAT or subject to VAT in direct method, or used in project, welfare activities, the amount of non-deductible import VAT will be recorded into the value of imported materials, record goods, fixed assets: Dr. 152, 153, 156, 211, 611,... Cr. 3331 - VAT payable 33312 2. When pay the VAT on imported goods to the State Budget: Dr. 3331 - VAT payable 33312 Cr 111, 112,... C. Accounting for deductible VAT At the end of the period, the accountant determines the VAT deductible by offsetting VAT output and input in that period: - VAT deductible in the period is the amount netting off VAT output and input: Dr. 3331 - VAT payable 33311
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 133 VAT Deductible

- The actual VAT paid to the State Budget: Dr. 3331 - VAT payable 33311 Cr. 111, 112,... D. Accounting for reduced VAT: 1. If the VAT is reduced and is deducted from VAT payables in that period: Dr. 3331 - VAT payable 33311 Cr. 711 - Other income 2. If the VAT is reduced and is refunded in cash: Dr. 111, 112 Cr. 711 Other income II. Special consumption tax (Account 3332) 1. When selling goods, services which are subject to both special consumption tax and subtraction method VAT, the accountant records the income from the goods, services at the selling price from including special consumption tax but excluding VAT: Dr. 111, 112, 131 Total amount Cr. 511 - Sales Price including special consumption goods and excluding VAT Cr. 512 - Inter-company revenue Price including special consumption goods and including excluding VAT Cr. 3331 VAT payables 33311 2. When selling goods, services which are subject to both Special Consumption Tax and VAT in direct method, the accountant must record the income from the goods, services including both special consumption tax and VAT Total amount : Dr. 111, 112, 131,... Cr. 511 - Sales Cr. 512 - Inter-company revenue 3. When determining the special consumption tax on goods, services sold in the period: Dr. 511 - Sales Dr. 512 - Inter-company revenue Cr. 3332 - Special consumption tax 4. When importing goods which are subject to special consumption tax, the accountant determines special consumption tax payable on imported goods based on the importing goods invoices and the tax noticement of special consumption tax payable: Dr. 152, 156, 211, 611,... Cr. 3332 - Special consumption tax 5. When paying the special consumption tax to the State Budget:
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Dr. 3332 Special consumption tax Cr. 111, 112,... III. Export duties (Account 3333) 1. When selling goods, services which are subject to import duties, the accountant records sales including the import duties total amount : Dr. 111, 112, 131,... Cr. 511 - Sales 2. When determining the import duties payable: Dr. 511 Sales ties Cr. 3333 - Import and export duties Detailing export duties 3. When paying the export duties to the State Budget: Dr. 3333 - Import and export duties Detailing export duties duties Cr. 111, 112,... IV. Import duties (Account 3333) 1. When importing materials, goods, fixed assets, the accountant records import duties payable, total payables, or paid to the sellers and the purchase of materials, imported goods, fixed assets the Price including import duties : Dr. 152, 156, 211, 611,... Price including import duties Cr. 3333 - Import and export duties Detailing import duties duties Cr. 111, 112, 331,... 2. When pay the import duties to the State Budget: Dr. 3333 - Import and export duties Detailing import duties Cr. 111, 112,... V. Profit tax (Account 3334) 1. Based on the amount of Profit tax payable to the State Budget quarterly: Dr. 821 - Current income tax 8211 Cr. 3334 - Profit tax payable 2. When pay the profit tax to the State Budget: Dr. 3334 - Profit tax Cr. 111, 112,... 3. At the end of the year, determine the profit tax to the State Budget of the fiscal year: - If the actual amount of profit tax that the company must pay is lower than the amount that the company has quarterly paid in advance, the difference is recorded as follows:
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Dr. 3334 - Profit tax Cr. 821 - Current income tax 8211 - If the actual amount of profit tax that the company must pay is greater than the amount that the company has quarterly paid in advance, the difference is recorded as follows: Dr. 821 - Current income tax 8211 Cr. 3334 - Profit tax payable - When pay the difference of the profit tax to the State Budget: Dr. 3334 Profit tax payable Cr. 111, 112,... VI. Personal income tax (Account 3335) 1. Rules for declaring, paying and finalizing the personal income tax for highly-income people the Personal Income Tax or PIT : authorized - The entity is responsible for paying or authorized to pay the PIT the paying entity must method declare and pay the PIT to the tax office in withholding method. The paying entity must withhold the tax and pay it to the State on behalf of the taxable people before paying to them. - The paying entity must calculate the commission to be enjoyed from tax payment, PIT amount commission and withhold that PIT to pay to the State. When withholding PIT, the company must issue PIT withholding bill to the taxable person. The paying entity is responsible for controlling and paying finalizing the tax bill as regulated by laws. 2. Major transactions: 2.1. Monthly, when determine the PIT based on the taxable income of employees: determine Dr. 334 Payable to the employees Cr. 333 - Fees, duties and other obligations 3335 2.2. When make payment to individuals outside the entity, the entity must determine the PIT payable based on the taxable irregular income whenever occurred: ar - Where Record payment in cash to the individuals outside the company: Dr. 623, 627, 641, 642, 635 Total payables ; or Dr. 161 - Expenditures from subsidies of State Budget Total payables ; or Dr. 431 - Bonus and welfare funds Total payables 4311 Cr. 333 - Fees, duties and other obligations 3335 The amount of withheld PIT Cr. 111, 112 Actual payment - Where payment was made for payables to individuals outside the company who have highlyincome: Dr. 331 Trade payable Total payables Cr. 333 Fees, duties and other obligations amount of withheld PIT Cr. 111, 112 Actual payment
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2.3. The paying entity withheld PIT will enjoy commission from tax payment services which is calculated by a percentage % on PIT payable on the regular and irregular incomes declared. When determining the commission: Dr. 333 - Fees, duties and other obligations 3335 Cr. 711 Other income 2.4. When paying PIT to the State Budget on behalf of the taxable person: Dr. 333 - Fees, duties and other obligations 3335 Cr. 111, 112,... VII. Natural resource tax (Account 3336) 1. Determining the natural resource tax recorded into production costs: Dr. 627 - Factory overhead costs 6278 Cr. 3336 Natural resource tax 2. When pay the natural resource tax to the State Budget: Dr. 3336 - Natural resource tax Cr. 111, 112,... VIII. Land and housing tax (Account 3337) tax 1. Determining the land and housing tax recorded in management costs: Dr. 642 General and administration expenses 6425 Cr. 3337 - Land and housing tax 2. When pay the land and housing tax to the State Budget: Dr. 3337 - Land and housing tax Cr. 111, 112,... IX. Other taxes payable (Account 3338), fees, duties and other obligation (Account 3339) 1. When determining registration fee for purchase of assets when obtaining the owner certificate or use right on the assets bought : Dr. 211 Tangible assets Cr. 333 - Fees, duties and other obligations 3339 2. When pay other taxes, fees, duties and payables: Dr. 333 - Fees, duties and other obligations 3338, 3339 Cr. 111, 112,... X. Subsidy from the State (Account 3339) 1. When the entity supplies goods and services following the State s requirement or receives the
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC subsidy from the State, the accountant records the subsidy from the State as follows: Dr. 333 - Fees, duties and other obligations 3339 Cr. 511 Sales 5114 2. Record receipt of subsidy from the State: Dr. 111, 112,... Cr. 333 - Fees, duties and other obligations 3339

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 334 PAYABLES TO EMPLOYEES This account records salaries, wages, social insurance and other payables that are due to the employee, as well as the payment of these liabilities. STRUCTURE AND CONTENTS OF ACCOUNT 334 - PAYABLES TO EMPLOYEES Debit: - Record salaries, wages, bonuses, social insurance and other amounts which have been paid or advanced to the employees. - Record deductions of salaries and wages from the employees salary. Credit: - Record amounts payable to employees such as salaries, wages, bonuses, social insurance, and other amounts. Credit balance: Shows amounts payable to employees for salaries, wages, bonuses and other payable to employees. The account 334 can have a debit balance. The debit balance of account 334 is very special debit showing that the amount paid to employees was greater than what was payable. The account 334 should be kept track of under two headings: salaries payable and other payables.

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Accounts 334 – Payables to employees have two sub-accounts: Account 3341 - Payable to staff: to record salaries, wages, bonuses, social insurance and other payables that are due to the employee of the entity, as well as the payment of these liabilities. - Account 3348 - Other payable to employees: to record wages, bonuses if any that are due to the other employee, as well as the payment of these liabilities. MAJOR TRANSACTIONS 1. To record salaries and allowance which are payable to employees. Dr. 241 - Construction in progress Dr. 622 - Direct labour costs Dr. 623 - Machine costs 6231 Dr. 627 - Factory overhead costs 6271 Dr. 641 Selling expenses 6411 Dr. 642 - General and administration expenses 6421 Cr. 334 Payables to employees 3341, 3348 .
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 2. To record bonuses payable to employees: - Determining bonuses payables that are covered by the bonus and welfare funds: Dr. 431 Bonus and welfare funds 4311 Cr. 334 Payables to employees 3341 . - Payment bonuses to employees: Dr. 334 Payables to employees 3341 Cr. 111, 112,... 3. To record social insurance e.g. sick leave, maternity leave, accidents, etc which must be paid to employees: Dr. 338 Other payables 3383 Cr. 334 Payables to employees 3341 4. To record annual leave which must be paid to the employees: Dr. 623, 627, 641, 642 Dr. 335 - Accruals the entity has already made provisions for annual leave Cr. 334 Payables to employees 3341 5. To record deductions from salaries and employees income such as advances, health insurance, employees advances, social insurance, indemnity etc.: Dr. 334 Payables to employees 3341, 3348 Cr. 141 - Advances to staff Cr. 338 Other payables Cr. 138 Other receivables 6. To record the personal income taxes which must been paid to the State: Dr. 334 Payables to employees 3341, 3348 Cr. 333 - 3335 7. To record advances or payment to the employees: Dr. 334 Payables to the employees 3341, 3348 Cr. 111, 112,... 8. To record the payment to the employees: Dr. 334 Payables to employees 3341, 3348 Cr. 111, 112,... 9. To record the payment to the employees by goods: - For goods subject to subtraction method VAT, the accountant records inter-company revenue at the price not including VAT: Dr. 334 Payables to employees 3341, 3348
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 3331 VAT payable 33311 Cr. 512 - Inter-company revenue price not including VAT - For goods subject to VAT in direct method, the accountant records inter-company revenue at total amount: Dr. 334 Payables to employees 3341, 3348 Cr. 512 Inter-company revenue total amount 10. Determining and making payment the shift meals that must be paid to employees: - To record the shift meals expenses that must be paid to employees: Dr. 622, 623, 627, 641, 642 Cr. 334 Payables to employees 3341, 3348 . - To record the payment of shift meals to employees: Dr. 334 Payables to employees 3341, 3348 Cr. 111, 112,

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 335 ACCRUALS This account records expenses which were incurred during the period but have not been paid. Recorded in this account are expenses that have not yet occurred. However, they are recognized in this period to ensure that when they do occur in the future they will not cause large fluctuations to business expenses. Recording these expenses to production and business cost in the period must be complied with matching principle of revenue and expenses incurred during the period. Items belonging to this account include: 1. Salary expenses payable to employees for annual level. 2. Repairing for special fixed asset with high value which occurs periodically, the enterprise can value estimate the repair expenses in the years ahead. 3. Expenses during the period in which the company interrupts its business operations due to the company season, and the company can plan for the interruption. The accountant will calculate and record the expenses which will be paid during the interruption period. 4. Interest expenses on loans. THIS ACCOUNT MUST COMPLY WITH FOLLOWING REGULATIONS 1. This account should record only those expenses which have been specified above. However, if expenses other than those stated above arc to be accrued, the company must explain why to the financial authorities. 2. Accounting for expenses which have not yet been incurred must be strictly controlled. The been company must prepare an estimate of accrued expenses and have reasonable evidence to prove that the amount recorded is in the actual expenses. It is prohibited to record into this account expenses. expenses which are not related to doing business. 3. In principle at the end of the fiscal year accrued expenses must be reconciled with the expenses accrued which have actually occurred. This procedure ill will reduce the carry forward balance in this account. 4. If this account has a balance at the end of the fiscal year, the company must give an explanation in the notes to the financial statements. STRUCTURE AND CONTENTS OF ACCOUNT 335 – ACCRUALS Debit: The expenses have actually been incurred; If the amount set up as an accrued expense turns out to be higher than the actual expense, then the difference should be debited to reduce expenses.

Credit:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Accruals have been recorded. Credit balance: Accruals which are recognized as expenses in the current period but not yet occurred. MAJOR TRANSACTIONS 1. To recognize in advance salary expenses payable for workers' annual leave. Dr. 622 Direct labour cost Cr. 335 Accruals

2. To record actual salary for worker s annual leave. Dr. 622- Direct labour cost if amount payable exceeds accrued amount Dr. 335 Accruals accrued amount Cr. 334 Payables to employees actual salary payable amount Cr. 622- Direct labour cost if amount payables are less than accrued amount . 3. To record estimated repairs and maintenance expenses for fixed assets with high value into maintenance operating expenses. Dr. 623 Dr. 627 Dr. 641 Dr. 642 Machine costs Factory overhead costs Selling expenses General and administration expenses Cr. 335 Accruals

4. When the repairing for fixed assets is complete and the assets are put in use, the accountants complete records the expenses actually incurred for the repairs and maintenance: for Dr. 623, 627, 641, 642 if the paid amount exceeds the accrued amount Dr. 335: Accruals accrued amount Cr. 241 Construction in progress 2413 Total actual expenses incurred Cr. 623, 627, 641, 642 if the paid amount is less than accrued amount nses 5. To record an estimate for operating expenses incurred during the interrupted season. Dr. 623 Dr. 627 Machine cost Factory and administration cost Cr. 335 Accruals

6. Record actual expenses incurred during the interrupted season. Dr. 623, 627 Paid amount exceeds the accrued amount Dr. 335 Accruals accrued amount Cr. 111 Cash on hand Cr. 112 Cash in bank Cr. 152 Raw materials Cr. 153 Tools and supplies Cr. 331 Trade payables Cr. 334 Payables to employees
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 623, 627 paid amount is less than accrued amount 7. If the interest expenses would be paid late, at the end period interest expenses payables must be calculated and recorded as follows: Dr. 635 - Financial expenses interest expenses Dr. 627 Factory overhead cost interest expenses is recognized to work in progress Dr. 241 Construction in progress interest expenses is capitalized to construction in progress Cr. 335 Accruals 8. When the enterprise issues bonds at par value and interest will be paid later when bonds are due , periodically the enterprise must accrue interest that must be paid in the current period to manufacturing expenses or capitalization: expense Dr. 627 Factory overhead cost interest expense is recognized to work in progress Dr. 635 Financial expenses interest expense is recognized to financial expenses in period expenses Dr. 241 Construction in progress interest expenses is capitalized to construction in progress Cr. 335 Accruals interest expenses must be paid in the period When bonds are due, the enterprise must pay principal and interest for persons who buy bonds: Dr. 335 Dr. 343 Accruals total interest amount Issued bonds 3431 Bond cost Cr. 111, 112,

pa 9. When the enterprise issues bonds with discount and interest will be paid later when bonds are due , periodically the enterprise must accrue interest payables for the current period to manufacturing expenses or capitalization: Dr. 627 Factory overhead cost interest is recognized to work in progress recognized Dr. 635 Financial expenses interest is recognized to financial expenses in the period Dr. 241 Construction in progress interest is capitalized to construction in progress Cr. 335 Accruals interest must be paid in the period Cr. 3432 Bond discount discount is allocated in the period When bond are due, the enterprise must pay principal and interest for persons who buy the bond: Dr. 335 Dr. 343 Accruals total interest amount Issued bond 3431 bond cost Cr. 111, 112,

10. When the enterprise issues bonds with premium and interest will be paid later when bonds are due , periodically the enterprise must accrue interest payables for the current period to manufacturing expenses or capitalization: Dr. 627 Dr. 635 Dr. 241 Factory overhead cost interest is recognized to work in progress Financial expenses interest is recognized to financial expenses in the period Construction in progress interest is capitalized to construction in progress Cr. 335 Accruals the interest for securities must be paid in the period
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When bonds are due, the enterprise must pay principal and interest for persons who buy those bonds: Dr. 335 - Accruals total interest amount Dr. 3431 Bond cost Cr. 111, 112,

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 336 INTER-COMPANY PAYABLES This account records the settlement of amounts payable between an independent business entity or General Corporation and its subsidiaries and divisions or among these subsidiaries and divisions. The account reflects the amounts payable or the amount that an independent business entity has paid or collected on behalf of its parent, subsidiaries or other members. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS: 1. The account 336 only reflects the internal economic transactions between the higher authority, its subordinates and among internal units in which the higher authority is the General Corporation. The parent must be a separate business entity and it must not be a non-business organization. Although the subordinates could be subsidiaries or divisions of the General Corporation or the parent, they must have a separate accounting structure. 2. Investment in subsidiaries, associates and jointly controlled entities and transactions between jointly the parent and its subsidiaries or among subsidiaries themselves would not be recorded to the account 336. 3. The contents of inter-company payables in account 336 Inter-company payables include: - Amounts which subsidiaries and divisions must submit to the General Corporation, the parent as submit well as amounts which the General Corporation and the parent provide to the subsidiaries and and divisions. - Amounts that the General Corporation, the parent, subsidiaries and divisions have paid or parent, collected on behalf of its General Corporation, its parent or its subsidiaries, divisions or other members and other current accounts. - With respect to capital that the General Corporation and the parent company lends to its Corporation subsidiaries and divisions, the General Corporation and the parent should record the amount Corporation advanced into account 1361 Inter-company receivables, capital lending . The subsidiaries and receivables, divisions should record the amounts received as an increase in assets and capital and should not record into account 336 Inter-company payables . 4. The accounting records must show detailed br breakdowns of the amounts owed to each party, and whether the amount is receivable or payable. 5. At the end of the accounting period the accountant will reconcile the account 136 and 336 and prepare a bilateral settlement minute which will allow for the clearance of these accounts. When reconciling, any differences must be investigated and adjusted on a timely basis. STRUCTURE AND CONTENTS OF ACCOUNT 336 – INTER-COMPANY PAYABLE Debit: - Amount that the parent has paid to the subsidiary and division. - Amount that the subsidiary has submitted to the General Corporation and the parent. - Amount reimbursed to a member for their payment on behalf of another member.
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- Repayment of receipts collected on behalf of another member. Credit: - Amount to be submitted to the General Corporation and the parent. - Amount to be provided to the subsidiary and division. - Amount payable to a member due to collecting a receivable on the other members behalf, or an amount payable to a member due to another member paying expenses on the member s behalf. Credit balance: Amount payable to inter-company. MAJOR TRANSACTIONS A. Accounting by the subsidiary and division 1. Periodically the subsidiary has to reflect in the general and administrative expenses the amount that it is liable to remit to the General Corporation, its parent company for management fees. Dr. 642 General and administration expenses Cr. 336 Inter-company payables

2. To record the portions of the business development fund, financial reserved fund and bonus, development welfare fund to be remitted according to legislations laid down by the General Corporation or the legislations parent company: Dr. 414 Investment development fund Dr. 4 15 Financial reserved funds Dr. 43 1 Bonus & welfare fund Cr. 336 Inter-company payables 3. To record benefit that must be paid to the General Corporation and the parent: Dr. 421 Undistributed earnings Cr. 336 Inter-company payables 4. To calculate the retained earning refundable to the General Corporation and the parent: Dr. 421 - Undistributed earnings Cr. 336 Inter-company payable 4. Amounts reimbursable to the General Corporation and the parent and other subsidiaries for expenses that the General Corporation and the parent and other subsidiaries have paid for on the companies behalf: Dr. 152 - Raw materials Dr. 153 - Tools and supplies Dr. 211 - Intangible assets Dr. 331 - Trade payables
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 64 1 - Selling expenses Dr. 642 - General & administration expenses Cr. 336 Inter-company payable 5. To record money collected on behalf of the General Corporation and the parent: Dr. 111 - Cash on hand Dr. 112 - Cash in bank Cr. 336 Inter-company payable 6. To record the payment to the General Corporation and the parent relating to amounts payable, amounts reimbursable, payments made by the parent on behalf of the subsidiary, or collections made on behalf of the parent. Dr. 336 Inter-company payable Cr. 111 - Cash on hand Cr. 112 - Cash in bank

7. To record fixed asset transferred among the subsidiaries in the General Corporation and the subsidiaries parent: Dr 411- Contributed capital net book value Dr. 214 - Accumulated depreciation and amortization accumulated depreciation amount amortization Cr. 211- Fixed asset historical cost 8. Buying goods from the General Corporation and the parent or other subsidiaries of the General Corporation and the parent 8.1 Goods subject to subtraction method VAT a. When having received goods from the General Corporation, the parent or other subsidiaries, the accountant records based on goods dispatch note cum internal goods transfer note and relating documents as follows: Dr. 156 - Goods Internal selling prices Cr. 336 Inter-company payables b. When selling goods, the entity must issue VAT invoice. The accountant records revenue and VAT output based on VAT invoice: Dr. 111, 131,... Cr. 511 Sales Cr. 3331 VAT payable 33311 At the same time, a list of invoices for goods delivered within the General Corporation and the parent or other subsidiaries of the General Corporation and the parent is prepared and sent to these entities to determine inter-company revenue. c. When the division received VAT invoice for the goods were transferred from the General Corporation or the parent, the accountant records deductible VAT input based on VAT invoice. Dr. 133 VAT deductible Cr. 156 Merchandise goods if cost of goods sold has not been transferred to income
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC summary Cr. 632 Cost of goods sold if cost of goods sold has been transferred to income summary d. In the case, because of the accounting and management requirement, the entity doesn t use the internal goods transfer note but the VAT invoice, the entity must issue VAT invoice when delivering goods to its subsidiaries and divisions in other provinces. Based on the VAT invoice, the accountant should record inter-company revenue as follows: Dr. 111, 112, 136 Internal selling price including VAT Cr 3331 VAT Cr. 512 Inter-company revenue Internal selling price not including VAT - When the divisions received VAT invoice and goods from the General Corporation or the parent, the accountant should record inventory at internal selling price not including VAT and deductible VAT input. Dr. 155, 156 Inter-company selling price not including VAT Dr. 133 VAT deductible Cr. 111, 112, 336 Total payment 8.2. Goods subject to VAT in direct method: a. When the subsidiaries and divisions received goods from the General Corporation and the received parent, based on goods dispatch note cum internal goods transfer note and relating document the internal accountant should record as follows: Dr. 155 Finished goods Internal selling prices Cr. 336 Inter-company payables

b. When selling goods, the entities must issue invoice, the accountant records revenue based on invoice, the invoice: Dr. 111, 112, 131,... Cr. 511 Sales 9. To record borrowings from higher authority t General Corporation and the parent and other the subsidiaries: Dr. 111, 112,... Cr. 336

Inter-company payables

10. Bilateral clearance between accounts payable and receivable of the General Corporation and the parent and other subsidiaries only bilateral clearance between accounts receivable and payable of one subsidiary of the General Corporation and the parent : Dr. 336 Inter-company payables Cr. 136 Inter-company receivables

II. Accounting by the General Corporation and the parent 1. To record the business development fund that the General Corporation and the parent provides for its subsidiaries.
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Dr. 414 - Business development funds Cr. 336 Inter-company payables 2. To record the financial reserve fund that the parent provides for its subsidiaries Dr. 415 - Financial reserve fund Cr. 336 Inter-company payables 3. To record the bonus & welfare fund that the parent provides for its subsidiaries. Dr. 431 - Bonus & welfare fund Cr. 336 Inter-company payable 4. To grant money to subsidiaries for these funds: Dr. 336 Inter-company payable Cr. 111, 112,

5. To record subsidies to the subsidiaries with the purpose of compensating for their losses Dr. 421 - Undistributed earnings Cr. 336 Inter-company payable 6. To record amounts payable to the subsidiary for money that the parent received on behalf of its subsidiary or what the subsidiary has paid on behalf of the parent. Dr 111 - Cash on hand Dr. 112 - Cash in bank Dr. 152 Raw material Dr. 153 - Tools and supplies Dr. 211 - Intangible assets Dr. 331 - Trade payables Dr. 627 - Factory overhead costs Dr. 641 - Selling expenses Dr. 642 - General & administration expenses Cr. 336 Inter-company payable 7. To record the payment to subsidiaries for amounts paid by the subsidiary on behalf of the parent and for amounts collected by the parent on behalf of the subsidiary. Dr. 336 Inter-company payable Cr. 111, 112,

8. The General Corporation or the parent buy goods from the subsidiaries, please refer to point 8, section I accounting by the subsidiaries 9. When subsidiaries submit management fee to the higher authority: Dr. 111, 112,... Cr. 136, 511,... Refer to guidance in accounts 136, 642

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 337 CONSTRUCTION CONTRACTOR PAYABLES BASED ON AGREED PROGRESS BILLING This account reflects amount the customers have to pay according to a set schedule of construction contract and amount receivables and revenue generated by reference to the completed volume determined by the contractor in the construction contract. THIS ACCOUNT MUST COMPLY WITH FOLLOWING REGULATIONS 1. Account 337 Construction contractor payables based on agreed progress billing is used to record only if the construction contract stipulates that the contractor is allowed to make payments according to the set schedule. This account is not used to record where the construction contract stipulates that the contractor is allowed to make payments according to the value of performed work volume approved by the customer. 2. The evidence to debit account 337 is the document not invoice prepared by the contractor and document not been approved by the customer yet showing that revenue recognised by reference to the completed work volume. The constructor must choose method to determine completed work volume. The contractor should delegate this job to a relevant department. This department should determine completed work volume and prepare documents to recognise revenue generated from construction contract in the period. The evidence to credit account 337 is the invoice prepared according to set schedule of invoice construction contract. Based on the amount in the invoice issued, the accountant records the the amount receivables not the revenue in the period. 3. Account 337 must keep track individual construction contract. STRUCTURE AND CONTENT OF ACCOUNT 337 – CONST CONSTRUCTION CONTRACTOR PAYABLES BASED ON AGREED PROGRESS BILLING Debit: rated Amount receivable and revenue generated by reference to the completed volume determined by the contractor in the construction contract. Credit: Amount the customers have to pay according to a set schedule of construction contract. Debit balance: Difference between revenue recognized and the amount payables according to set schedule of construction contract. Credit balance: To reflect the difference of lower amount of revenue of construction contract recorded and the amount receivables from customer according to the set schedule of construction contract. MAJOR TRANSACTIONS
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1. The construction contract stipulates that the contractor is allowed to make payments according to a set schedule. When work volume of the construction is reliably estimated, the accountant, based on the documents not invoice prepared by the contractor showing that revenue recognized by reference to the completed work volume, shall record the followings: Dr. 337 Construction contractor payables based on agreed progress billing Cr. 511 Sales

2. Based on the invoice issued according to the set schedule, the accountant records the amount receivables as agreed in the contract: Dr. 131 Accounts receivable Cr. 337 Construction contractor payables based on agreed progress billing. Cr. 3331 VAT payables

3. Receipts money from the customers: Dr. 111, 112,... Cr. 131

Accounts receivable

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 338 OTHER PAYABLES This account records the changes in other payable which are not included in accounts 33 from account 331 to account 337 . This account also records revenue advances from customers for services that has been delivered by the company, differences resulted from revaluation of assets that were contributed in a joint venture and differences resulted from difference of prices in sale and leaseback transactions for both operating lease and financial lease. Content and scope of this account involves the following major transactions: 1. The value of asset surplus for which the reason has not been determined and the company is awaiting the authority decision. 2. The value of asset surplus payable to individuals or entities internal and external according to individuals the authority decision that were in written report if the reason was found. 3. The recognition and payment for social insurance, health insurance and trade union fees. insurance, 4. Withholdings from employees' salaries based on the court's decision allowance for children when divorced, children born out of wedlock, court fees, compensation. etc. 5. Amount payable as a result of holding deposits of another entity. Receipt of deposits and pledges by goods would not be reflected in this account, but followed-up in off balance sheet this accounts account 003 - Goods received on consignment for sale . 6. Dividends payable to joint venture partners, shareholders. 7. Amounts payable for temporary borrowing of materials and/or money. 8. Amounts received from the import and export consignors or their agents in order to pay export tax, import tax, duties, import VAT. 9. Amounts received in advance from customer for several accounting periods from leasing assets for or infrastructure deferred income . 10. The difference from late payment price, instalment price and price of payment at sight according to the contract. 11. Interest income received before money has lent to the borrowers or before buying debts instruments. 12. Foreign exchange difference and revaluation of balances in foreign currency of construction activity pre-operating stage in which the construction is complete but hasn t been finalized at the end of the fiscal year. 13. Deferred interest income due to revaluation of assets that were contributed in jointly controlled entity in correspondence with the interests of the venture parties in the joint venture. 14. Amount payables of collections from sales of State shares, collections on behalf, and collections from sales of assets that were eliminated in the value of the enterprise.
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 15. The difference due to difference of higher selling price and net book value of sold assets or leaseback assets of financial lease. 16. The difference due to difference of higher selling price and fair value of sold assets or leaseback assets of operating lease. 17. Other amounts payables and receivable. STRUCTURE AND CONTENTS OF ACCOUNT 338 - OTHER PAYABLES Debit: Value of asset surplus to be reclassified into relevant accounts in accordance with the authority decision in the written report. Amount of social insurance which has been paid to an employee. Trade union fees which have been paid by the entity. surance Social insurance, health insurance & trade union fees which have been remitted to the authorities. Deferred income to be allocated in relating periods; advances returned to customer when the periods; enterprise stops leasing asset. Allocation amount of foreign exchange difference and revaluation of balances in foreign difference currency gain of foreign exchange difference of construction activity pre-operating stage into financial income when the construction is complete. Allocation amount of difference from revalued price and net book value of the asset that were price contributed in the jointly controlled entity in correspondence with the interests of the venture parties in the joint venture. Allocation amount of difference from late payment price, instalment price and price of payment at sight late payment interest income according to the contract into financial expenses. Transferring the difference of higher selling pri and the net book value of the sold fixed price asset and leaseback assets of financial lease to decrease the production and business expenses; Transferring the difference of higher revalued amount and book value of materials and goods that were contributed into the jointly controlled entity in correspondence with the interests of the venture parties in the joint venture to other income when the jointly controlled entity sold those materials and goods to the third party; Remitting the collections from the accounts receivable and receipts from sales of fixed assets which were eliminated from the value of the enterprises when equitizing the SOEs to the Fund of Enterprise Restructuring; Transferring expenses resulted from equitization that were deducted against income generated from equitization of the state owned enterprises;
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Other amounts which have been paid.

Credit: Asset surplus is waiting to solve the reason has been determined ; Value of asset surplus payable to individuals and entities internal, external according to the authorities decision in the written report in which the reason is determined ; Recognition of social insurance, health insurance and trade union fees to production and business expenses; Recognition of social insurance, health insurance and trade union fees to withhold employees of income; Amounts to be settled with an employee regarding housing and utility expenses; regarding Injection from funds to cover overpayment of trade union fees; Social insurance paid to employees was covered by the Social Insurance Fund; covered Deferred income occurred in accounting period; Allocation amount of foreign exchange difference and revaluation of balances in foreign difference currency gain of foreign exchange difference of construction activity pre-operating stage into financial income when the construction is complete; Difference of late payment price, instalment price and price of payment at sight according to the contract; The difference due to difference of higher selling price and net book value of sold assets or se lling leaseback assets of financial lease; The difference due to difference of higher selling price and fair value of sold assets or leaseback assets of operating lease; Difference of revalued price and net book valu of the asset that were contributed in the value jointly controlled entity in correspondence with the interests of the venture parties in the joint venture; Amount payables of collections of receivables, collections on behalf, and collections from sales of assets that were eliminated in the value of the enterprise for equitization; Amount payables that were recorded in the joint stock company for the collections on behalf and collections from sales of assets that were withheld for the State eliminated in the value of the enterprise for equitization ; Amount received from sales of State shares; Other payables.

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Credit balance:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Amounts payables; Amount of social insurance, health insurance and trade union fees that are calculated but have been not paid for administration organization or trade union fees which has been not use all, will be kept for enterprise; Value of asset surplus awaiting the decision of the authorities; Deferred income in the end of the accounting period; Foreign exchange difference and revaluation of balances in foreign currency of construction activity pre-operating stage in which the construction is complete but hasn t been finalized at the end of the fiscal year; Difference of higher selling price and fair value or net book value of soled or leaseback fixed assets that has not been transferred yet; Difference of higher revalued amount and book value of fixed assets contributed in the jointly value controlled entity that has not been transferred yet; Amount payables of collections of receivables, collections on behalf, and collections from sales of assets withheld for the State that were eliminated in the value of the enterprise at the eliminated end of accounting period; Amount payables of collections from receivables, collections on behalf and collections from sales of assets withheld for the State that the joint stock company must pay; Amount payables of collections from selling State shares at the end of accounting period;

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This account may have a debit balance. The debit balance reflects the amount paid to the authorities exceeds the obligation or the company has not paid social insurance to employees and has trade union fees and the overpayment has not been reimbursed. Account 338 – Other payables have eight sub-accounts: Account 3381 – Surplus of assets waiting for resolution: to record the value of asset surplus for which the reason has not been determined and th company is awaiting the authorities decision. the If the cause of the asset surplus has been detected, and the surplus is officially resolved in the minutes, the value of the asset surplus is then recorded directly into the relevant accounts rather than account 338 3381 . Account 3382 – Trade union fees: to record recognition and payment for social insurance to employees. Account 3383 – Social insurance payables: to record recognition and payment for social insurance. Account 3384 – Health insurance payables: to record recognition and payment according to regulation

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Account 3385 - Payables from equitization: to record the amount payables of collections from selling the State share, collection of receivables on behalf and collections from selling assets that were eliminated to the value of enterprise and other payables according to regulations. Account 3386 – Receipts of short term deposits: to record the amounts that entity received deposits and pledges of other entities and individuals outside the entity with the term of one year to guarantee services relating to production and business activities according to the signed contract. Account 3387 – Deferred income: to record the balance and movement of deferred income of the entity in the accounting period. This account would be used to record the amount of money that the customer paid in advance for lease assets for one or several periods; interest income received in advance before lending capital or buying debts instrument; difference of late payment price, instalment price and price of payment at sight as committed; gain of foreign exchange difference and revaluation of balances in foreign currencies of construction activities pre-operating stage to be allocated when the construction was complete; difference of higher revalued amount and book complete; value of assets contributed in joint venture in correspondence with the interests of venture parties. correspondence This account would not be used to record advance from customer for goods and services that have advance not been provided. Account 3388 – Other payables: to record other payable except for those accounts that should be recorded to accounts: from account 3381 to account 3387. MAJOR TRANSACTION 1. To reflect the value of fixed asset surplus for which the reason has not been determined and the company is awaiting the authorities decision: Dr. 211 Tangible asset historical cost Cr. 214 Accumulated depreciation and amortization depreciation amount and Cr. 338 Other payables 3381 net book value

Simultaneously, an increase in fixed assets register is recorded based on the fixed assets documents. 2. To record the surplus value of materials, merchandise and cash detected through a physical count for which the reason has not been determined, and the company is awaiting the authorities decision: Dr. 111 Cash on hand Dr. 152 Raw materials Dr. 153 Tools and supplies Dr. 155 Finished goods Dr. 156 Merchandise goods Dr. 158 - Goods in bonded warehouse Cr. 338 Other payables 3381 3. When the company receives the authorities decision the accountant must record to the relevant accounts: Dr. 338 Other payables 3381 Cr. 411 Contributed capital, or:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 441 Cr. 338 Cr. 642 Investment in capital construction Other payables 3388 ; General and administration expenses.

4. Monthly withholding social insurance, health insurance, trade union fees to production and business expenses: Dr. 623 Dr. 622 Dr. 627 Dr. 641 Dr. 642 Machinery cost Direct labour cost Factory overhead costs Selling expenses General and administration expenses Cr. 338 Other payables 3382, 3383, 3384

5. Calculate health insurance, social insurance, trade union fees deducted from salaries of employees: Dr. 334- Payables to employees Cr. 338 Other payables 3384 6. To record social insurance, trade union fees submitted to the authorities and buying health insurance card: Dr. 338 Other payables Cr. 111, 112,...

7. Calculate social insurance payable to employees when sick leave, maternity leave, etc. Dr. 338 Other payables 3383 Cr. 334 Payables to employees

8. To record spending out of trade union fund: Dr. 338 Other payables 3382, 3383 Cr. 111, 112,...

essive 9. To record a reimbursement due to excessive payments made from trade union fund: Dr. 111 Dr. 112 Cash on hand Cash in bank Cr. 338 Other payables

10. To record receipt of deposits: - Receipt of deposits from other entities in cash: Dr. 111 1111, 1113 , 112,... Cr. 338 Other payables 3386 In case, the depositing party violated the signed economic contract, the entity will be fined as agreed in the contract: + Penalty deducted into the deposit amount:
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Dr. 338

Other payables 3386 short term deposits Cr. 711 Other income

+ Repayment of the deposit amount that the penalty was deducted: Dr. 338 Other payables 3386 the deducted amount if any Cr. 111, 112,...

11. Calculate the interests must be paid to the venture parties or dividends must be paid to shareholders according to the made by the general assembly of shareholders: Dr. 421 Undistributed earnings Cr. 338 Other payables 3388

12. To record deferred income from leasing fixed asset, investment property under operating lease; and the revenue of the current accounting period that was determined by dividing the total period receipt from leasing fixed assets, investment property and the periods of leasing fixed assets and investment property: a. Enterprise paid VAT in subtraction method: When having received advances from the customers for asset lease, investment property in customers several years, the accountant records the deferred income at price not including VAT: records Dr. 111, 112,... advance amount Cr. 3387 Deferred income leasing price not including VAT Cr. 3331 VAT payable 33311 Calculating and recording deferred income of each accounting period: Dr. 3387 Deferred income Cr. 511 Sales 5113, 5117 In the case, the leasing asset contract was broken, cash then was returned to the lessee: broken, Dr. 3387 Deferred income leasing price not including VAT Dr. 3331 - VAT payable the VAT amount returned to the lessee for leasing that was not implemented Cr. 111, 112,... returned amount . b. Enterprise paid VAT in direct method: When having received advances from lessee for several years, the accountant records deferred income at total receipt: Dr. 111, 112,... Cr. 3387 Deferred income total amount Calculating and recording deferred income of each of accounting period: Dr. 3387 Deferred income Cr. 511 - Sales 5113, 5117 .
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The accountant records payable VAT in direct method: Dr. 511 Sales 5113, 5117 Cr. 3331 - VAT payables 33311 . When the leasing asset contract was broken, cash then was returned to the lessee: Dr. 3387 Deferred income Cr. 111, 112,... returned amount . 13. Accounting for selling goods under late payment or instalment plan: a. Selling goods under late payment or instalment plan that is subject to Subtraction method VAT: When selling goods under late payment or instalment plan, the accountant records revenue in the instalment current period at the price of payment at sight. The difference of late payment price, instalment The price and the price of payment at sight would be recorded to account deferred income : Dr. 111, 112,131,... Cr. 511 - Sales price of payment at sight not including VAT Cr. 3387 Deferred income difference of price of late payment, instalment and price of payment at sight not including VAT Cr. 333 VAT payables 3331 . Periodically, the accountant calculates, determines and transfers the interest income generated from selling goods under late payment or instalment plan to profit and loss account: Dr. 3387 Deferred income Cr. 515 Financial income. When having received money from selling goods under late payment and instalment plan including the difference of price of late payment or instalment plan and price of payment at sight: Dr. 111, 112,... Cr. 131 Accounts receivable. b. Selling goods under late payment or instalment plan that is not subject to VAT in direct method: When selling goods in late payment or instalment plan, the accountant should record revenue in the current period at the price of payment at sight. The difference of late payment price, instalment price and the price of payment at sight should be recorded to account deferred income : Dr. 111, 112, 131,... Cr. 511- Sales price of payment at sight including VAT Cr. 3387 Deferred income difference of price of late payment, instalment and price of payment at sight including VAT At the same time, the cost of goods sold is recorded as follows:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC + Selling goods: Dr. 632 - Cost of goods sold Cr. 154 631 , 155, 156, 157,... + Disposal of investment property: Dr. 632 - Cost of goods sold net book value of investment property Dr .214 - Accumulated depreciation and amortization 2147 accumulated depreciation Cr. 217- Investment property At the end of the period, VAT payables are determined in direct method: Dr. 511 Sales Cr. 333 Tax and obligation payables 3331 . Periodically, the accountant should calculate, determine and transfer the interest income determine te generated from selling goods under late payment or instalment plan to profit and loss account: Dr. 3387 Deferred income Cr. 515 Financial income When having received money from selling goods under late payment and instalment plan including the difference of price of late payment or instalment plan and price of payment at sight: Dr. 111, 112,... Cr. 131 Accounts receivable 14. Sales and leaseback assets of financial lease in which selling price is higher than the net book value of the fixed assets sold or the assets leased back back: When selling asset procedure is completed, based on invoice and relating documents the accountant records: Dr. 111, 112,... Total amounts Cr. 711- Other income net book value of asset sold or the assets leased back Cr. 3387 Deferred income Difference of selling price and net book value of fixed asset selling Cr. 3331 - VAT payables At the same time, the accountant records a decrease in fixed asset: Dr. 811 Other expenses net book value of assets sold or leased back Dr. 214 Accumulated depreciation and amortization depreciation amount if any Cr. 211 Tangible assets historical cost Periodically, the difference gain of selling price and net book value of fixed asset sold and leased back was transferred to production and business expenses in the current period matching with leasing period: Dr. 3387 Deferred income Cr. 623, 627, 641, 642,...

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 15. When the construction was complete pre-operating stage , the accountant transfers the foreign exchange difference to profit and loss account. If the account 413 Foreign exchange difference has credit balance, it will be recorded to financial income or transferred to account 3387 deferred income for allocating in 5 years as maximum: Dr. 413 Foreign exchange difference 4132 Cr. 515 - Financial income Cr. 3387 Deferred income Gain of foreign exchange difference to be allocated Allocation of realized foreign exchange gains occurred in construction stage to financial income when the construction is complete and put in use: Dr. 3387 Deferred income Cr. 515 Financial income Gain of foreign exchange difference 16. When assets contributed into jointly controlled entity that revalued amount is higher than the net book value of fixed assets, the accountant records the difference of revalued amount and the records net book value in correspondence with the interests of other venture parties in the joint venture to account 711 other income and records the difference of revalued amount and the net book value difference in correspondence with the entity s interests in the joint venture to account 3387 Deferred income : Dr. 222 Dr. 214 Shares in joint ventures revalued amount Accumulated depreciation and amortization 2417 depreciated amount amortization Cr. 211, 213 historical cost Cr. 711 Other income Difference of revalued amount and the net book value in revalued correspondence with the interests of other venture parties in the joint venture Cr. 3387 Deferred income Difference of revalued amount and the net book value in revalued correspondence with the interests of the entity in the joint venture

Periodically, based on the useful life of fixed assets that are used by the jointly controlled entities, the accountant allocates the deferred income to other income of the current period: Dr. 3387 Deferred income Cr. 711 Other income. venture 17. Accounting for transactions between venture parties and jointly controlled entity 17.1. Venture parties sell assets to the jointly controlled entity: - The venture party sold goods to the jointly controlled entity. When goods are delivered, the accountant records as follows: Dr. 632 Cost of goods sold Cr. 155 Finished goods, or Cr. 156 - Merchandise goods

At the same time, based on the price of goods sold, the accountant records the revenue as follows: Dr. 111, 112, 131,... total value of finished goods and goods sold to jointly controlled entity Cr. 511 - Sales Price not including VAT Cr. 3331 - VAT payables 33311
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC - The venture party sells fixed asset to jointly controlled entity, the accountant records to decrease the fixed asset. Dr. 811- Other expenses net book value Dr. 214 Accumulated depreciation and amortization depreciated amount Cr. 211, 213 historical cost At the same, the accountant records other income generated from sales of fixed asset at market price to the jointly controlled entity. Dr. 111, 112, 131,... Cr. 711- Other income Cr. 333 - VAT payables 33311 At the end of accounting period, if the assets, finished goods and goods sold to the jointly controlled entity have not been sold to the independent third party, the venture party records deferred income generated from sales of fixed assets, finished goods and goods in correspondence with its interests in the joint venture: + Sales of merchandise and goods: Dr. 511 Sales Deferred amount due to sales of finished goods, merchandises in correspondence merchandises with its interests in the joint venture Cr. 3387 Deferred income + Sales of fixed asset: Dr. 711- Other income Deferred amount due to sales of fixed assets in correspondence with its interest in the joint venture Cr. 3387 Deferred income In the next accounting period, if the jointly controlled entities sells the merchandise and finished controlled goods to an independent third party, the venturer records the following: Dr. 3387 Deferred income deferred amount in correspondence with the interests in the joint venture Cr. 511 Sales - Periodically the venture party allocates the deferred income to the other income in correspondence with its interests in joint venture based on the useful life of the assets that the jointly controlled entity is using: Dr. 3387 Deferred income Cr. 711 - Other income When the jointly controlled entity sells the assets purchased from the venture party to an independent third party, the venture party records: Dr. 3387 Deferred income portion of actual gains attributable to its interests in the joint venture that has not been allocated to other income Cr. 711 - Other income 17.2. Venture party buys asset from the jointly controlled entity:
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When buying asset from the jointly controlled entity, based on relating documents, the accountant records the purchase the same as purchases from other suppliers. 18. Accounting for payables of collections from sales of the State shares: - During the period of determining the value of the enterprise and the State Owned Enterprise officially transited to a joint stock company, collections of receivables or collections from sales of assets that were eliminated from the value of the enterprise, the accountant records these total receipts to Enterprise Restructuring Fund: Dr. 111, 112,... Cr. 3385 - Payable from equitization d At the same time, a single entry is credited to account 002 Goods held under trust or for processing off balance sheet accounts at the sold value of merchandise and assets withheld for the State that were eliminated from the value of enterprise. - When submitting the collections of receivables or collections from sales of assets that were eliminated from the value of enterprise to the Enterprise Restructuring Fund, the accountant Restructurin the records: Dr. 3385 - Payables from equitization Cr. 111, 112,... - When selling shares of the State, the accountant records: Dr. 111, 112,... Cr. 3385 Payables from equitization. When the equitization is complete, the enterprise must report and finalize the equitization expenses to the agency that made the equitization decision. Total expenses arisen in the equitization equitization would be deducted into the receipts from sales of State shares. The accountant receipts records the approved expenses resulted from equitization: Dr. 3385 Payables from equitization details of receipts from sales of State shares Cr. 1385 - Receivables from equitization details of expenses resulted from equitization . When submitting the variance of total receipts from sales of State shares and the equitization expenses to the Enterprise Restructuring Fund, the accountant records: Dr. 3385 - Payables from equitization Cr. 111, 112,...

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 341 LONG-TERM LOANS This account records long term loans and repayments of enterprise. Long term loan is a loan that the repayment period is more than one years. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. At the end of accounting period, the enterprise must calculate and plan long term loan schedule and also determine the current portion which is due next year. The enterprise must plan with regards to how they are going to pay the amounts off. The enterprise must keep track of individual creditors and loan contract. 2. If the funds borrowed are in a foreign currency, the accountant must keep details of the original currency. Loan or repayment in foreign currency should be converted to Vietnamese foreign Dong using the actual exchange rate or average inter-bank exchange rate on foreign currency average market announced by the SBV at the date of transaction or using the exchange rate of accounting book. Debit balance of account 341 is converted into Vietnamese dong using the exchange rate of accounting book. Foreign exchange difference if any occurred from repayment of long-term loan in foreign currency in the course of doing business applying to currency both enterprise in construction stage and enterprise in construction activity would be treated enterprise to financial income or expenses. Foreign exchange difference occurred in construction stage exchange pre-operating stage would be recorded to account 413 Foreign exchange difference and treated according to the current regulations refer to instruction of account 413 . 3. At the end of accounting period, the balance of long term loan must be revalued using average inter-bank exchange rate announced by the SBV at the date of transaction. Foreign exchange difference resulted from revaluation of the balance of long term loan in foreign currency is recorded to account 413 Foreign exchange difference and treated according to the current regulations Refer to instruction of account 413 . STRUCTURE AND CONTENTS OF ACCOUNT 341 - LONG TERM LOAN DEBIT: - Long term loans paid; - Foreign exchange difference resulted from revaluation of the balance of long-term loan in foreign currency at the end of the fiscal year. Credit: - Long term loan incurred during the current period. - Foreign exchange difference resulted from revaluation of balance of long-term loan in foreign currency at the end of the fiscal year. Credit balance: Long term loan which have are not due within the current year.
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC MAJOR TRANSACTIONS 1. Long term loan to acquisition of fixed asset for production of goods and services subject to subtraction method VAT. Dr. 211 Tangible asset price not including VAT Dr. 213 Intangible asset price not including VAT Dr. 133 VAT deductible 1332 Cr. 341 Long term loan 2. Long term loan for construction. - Acquisition of assets or constructions for production of goods and services subject to subtraction method VAT: Dr. 241 Construction in progress price not including VAT Dr. 133 VAT deductible 1332 Cr. 341 Long term loan - Acquisition of assets or constructions for production of goods and services not subject to VAT or subject to VAT in direct method: Dr. 241 Construction in progress total amounts Cr. 341 Long term loan.

3. Long term loan for the purchases of raw materials, equipments and tools: materials, the - Purchases of raw materials, equipment and tools for production of goods and services subject to tools subtraction method VAT: Dr. 152 Dr. 153 Dr. 133 Raw material prices not including VAT Tools, supplies price not including VAT VAT deductible 1331 Cr. 341 Long term loan

- Purchases of raw materials, equipment and tools for production of goods and services not subject to VAT or subject to VAT in direct method: Dr. 152 Dr. 153 Raw materials total amount Tools, supplies total amount Cr. 341 Long term loan

4. Long term loan for paying creditors and contractors: Dr. 331 Trade payable Cr. 341 Long term loan

5. Long term loan for advance payment to construction contractors: Dr. 331 Trade payables amount paid in advance payment to contractors Cr. 341 Long term loan

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 6. Long-term loan for investment in subsidiaries, associates, joint ventures, long term securities and bonds: Dr. 221 Dr. 222 Dr. 223 Dr. 228 Investment in subsidiaries Share in joint ventures Investment in associates Other long term loan Cr. 341 Long term loan

7. Long term loan in VND put in cash on hand or deposit in bank : Dr. 111 Dr. 112 Cash on hand Cash in bank 1121 Cr. 341 Long term loan

8. Long term loan in a foreign currency must be converted into Vietnam Dong using the actual exchange rate or average inter-bank exchange rate in the foreign currency market announced by rate the SBV at the date of transaction: Dr. 111 Cash on hand 1112 loan to put in cash on hand Dr. 112 Cash in bank 1122 loan to deposit in bank Dr. 221, 222, 223 loan for investment in subsidiaries, associates, joint ventures Dr. 331 Trade payables loan for payment the seller Dr. 211 Tangible asset loan for acquisition of fixed asset Dr. 133 VAT deductible if any Cr. 341 Long term loan. 9. Long term loan repayment made in cash on hand, cash in bank, or cash receiving from receivables in Vietnam Dong : Dr. 341 Long term loan Cr. 111 Cash on hand Cr. 112 Cash in bank Cr. 131 Accounts receivable

10. Long term repayment made in cash on hand or cash in bank in a foreign currency : - If long-term loan repayment in a foreign curre currency in the course of doing business applying to both enterprise in construction stage and enterprise in construction activity Dr. 341 Long term loan using exchange rate of accounting book of account 341 Cr. 111, 112 using exchange rate of accounting book of accounts 111,112 Cr. 515 Financial income gain of foreign exchange difference loss of foreign exchange difference would be debited to account 635 Financial expenses

- If long-term loan repayment for construction pre-operating stage Dr. 341 Dr. 413 Long term loan using exchange rate of accounting book of account 341 Foreign exchange difference loss of foreign exchange difference Cr. 111, 112,... using exchange rate of accounting book of accounts 111, 112 Cr. 413 Foreign exchange difference gain of foreign exchange difference foreign exchange difference would be debited to account 431
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 11. At the end of the fiscal year, when preparing financial statement, balance of long term loan in a foreign currency must be revalued according to average inter-bank exchange rate announced by the SBV if there is a change in the foreign exchange rate - Loss of foreign exchange difference: Dr. 413 Foreign exchange difference 4131, 4132 Cr. 341 Long term loan

- Gain of foreign exchange difference: Dr. 341 Long term loan Cr. 413 Foreign exchange difference 4131, 4132

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 342 LONG TERM PAYABLES This account records long-term payables such as obligations under financial lease or other longterm payables borrowing tem is greater than one year . For a financial lease, the total lease obligations to credit to account 342 Long-term payables is the total amount payable determining by the current cost of minimum lease amount or fair value of lease asset, minus - amount payables in the current period, plus + amount of VAT that the lessee must pay during lease term. If an obligation under a financial lease is in a foreign currency, then the lessee should calculate and translate the amount into VND based on the ac actual exchange rate or average inter-bank exchange rate announced by the SBV at the date of transaction. When payment made in a foreign currency, the debit side of account 342 must be converted into VND using the exchange rate of accounting book of account 342. STRUCTURE AND CONTENTS OF ACCOUNT 342 - LONG TERM PAYABLES Debit: Repayment of long-term liabilities; Posting the current portion of long-term liabilities due to account 315; Reducing liability with the agreement of creditors; Loss of foreign exchange difference resulted from revaluation of long term payables in a foreign currency.

Credit: Long term liabilities incurred in the current period. Gain of foreign exchange difference resulted from revaluation of long term liabilities in a foreign currency. Credit Balance: Long-term debts which is not due within the current period. MAJOR TRANSACTIONS I. Accounting for transactions relating to financial lease: 1. Amount payable under financial lease is determined at purchased price not including VAT that the lessor paid when acquisition of leased asset. - When received financial lease asset, based on lease asset and relating documents to reflect cost of financial lease asset at price not including VAT input.
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 212 Financial lease asset price not including VAT Cr. 342 - Long term payables Current cost of payment minimum lease amount or reasonable cost of lease asset minus original debt must payment incurrent period Cr. 315 - Current portion of long-term loan amount payables in the current period - At the end of accounting period, based on the lease contract to determine the Current portion of long term loan that must be paid in the next accounting period: Dr. 342 Long term payables Cr. 315 Current portion of long term loan 2. Amount payable under financial lease is determined at purchased price including VAT that the lessor paid when acquisition of leased asset. - When received financial lease asset, the lessee also record the VAT of the asset that the lessor paid before. Based on the finance lease contract, return the VAT amount to the lessor. Dr. 212 Financial lease asset price not including VAT Dr. 138 Other receivables VAT input of financial lease asset Cr. 315 Current portion of long term loan debts must be paid in current period including VAT amount Cr. 342 Long term payables the current cost of minimum lease amount or reasonable cost of lease asset, minus debt payment in current period, plus VAT that lessee must payment during lease term . - At the end of accounting period, base on lease contract to determine the Current portion of long term loan must be paid in the next accounting period: Dr. 342 Long term payables Cr. 315 Current portion of long term loan II. Accounting for transaction relating other long term payables: 1. Long term payables for construction: Dr. 241 - Construction in progress Cr. 342 Long term payables 2. For long term debts that the creditors were not identified, when there is a decision to write off or not have to pay during equitization of state owned enterprise: Dr. 342 Long term payables Cr. 711 Other income.

3. At the end of the accounting period, the accountant determines the Current portion of long term loans for the next accounting period and records the followings: Dr. 342 Long term payables Cr. 315 Current portion of long term loans

III. Preparation of financial statement at the end of the accounting period: The balance of long term payables in a foreign currency must be revalued according to average inter-bank exchange rate announced by the SBV:
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1. Loss of foreign exchange difference: Dr. 413 Foreign exchange difference Cr. 342 Long term payables

2. Gain of foreign exchange difference: Dr. 342 Long term payables Cr. 413 Foreign exchange difference

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 343 ISSUED BONDS This account is used to reflect bonds issued and its payment. This account is also used to reflect discount, premium of bond incurred when issuing bonds and allocation of those discounts and surplus in order to determine borrowing costs to be charged to manufacturing expenses or capitalized. An enterprise might issues bonds under three scenarios as follows: - Bonds issued at value (issued price is equal to par value): where issuing price of bond is equal to its par value. It is often happened when market interest rate is equal title rate of bonds issued. - Bonds issued with discount (issued price is lower than its value): where selling price of bond is lower than its issuing one. The difference between the higher issuing price and selling one is called bond discount. It is often happened when market interest rate is greater than title rate of bonds issued. - Bonds issued with premium: (issued price is higher than its face value): where selling price of bond is higher than its issuing one. The difference between the lower issuing price and selling one is called bond premium. It is often happened when market interest rate is lower than nominal rate of bond issued. the Bond discount and premium are incurred only if the entity borrows money by issuing bonds when interest there is a difference between the market and nominal interest rate which is agreed by the lenders. Bond discount and premium should be determined and recorded right at issuing date. The rate difference between market and nominal interest rate after bond was issued should not have impact on the recorded discount and premium. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Account 343 is only used for the entity borrowing money by issuing bonds. 2. Account 343 must be kept track in details of bonds issued including: Bond value; Bond discount; Bond premium.

At the same time, it must be kept track in details by terms of issued bonds. 3. The enterprise must keep track of bond discounts and premium for each type of issued bond and their allocation in order to determine borrowing costs to be charged to expenses the profit and loss account or capitalized for each period. - Bond discount is allocated to determine the borrowing cost for each period within bond terms; - Bond premium is allocated to decrease borrowing cost for each period within bond terms; - When interest expenses arising from bonds issued meet criteria to be capitalized, those expenses and allocation of discount or excess of securities for each period must not be higher the
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC actual interest expenses incurred and the allocation amount of discount and excess in that period. - Allocation of discount or premium of bonds may apply the actual rate method or straight line method: + Actual rate method: where discount or premium is allocated to each period can be calculated by the difference of interest expenses payables in each period equal to opening balance of book value of bonds multiply with actual rate on the market and amount payables for each period. + Straight – line method: where discount or premium is allocated to the same part for each period during the duration of securities. 4. In the case, the enterprise pays interest when the bond issued fall due, the enterprise must periodically calculate interest from bond issued to record to manufacturing expenses or to capitalize to value of asset in process. 5. When preparing financial statement, the debt securities in the liabilities on the balance sheet debt are reflected by net value Net value of securities equal value of securities minus discount of securities plus excess of securities . STRUCTURE AND CONTENTS OF ACCOUNT 343 – ISSUED BONDS Debit: - Payment when bonds fall due; - Bond discount incurred during the period; - Allocation of bond premium incurred during the period. Credit: - Bond value recorded at par value in the period; - Allocation of bond discount in the period; - Bond premium incurred during the period. Credit balance: Residual value of bond issued at the end of the period. Account 343 – Issued bond has three sub–accounts: - Account 3431 – Bond par value - Account 3432 – Bond discount - Account 3433 – Bond premium

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC MAJOR TRANSACTIONS I. Bond issued at par value: 1. To reflect receipts from issuing bonds: Dr. 111, 112,... receipts from issuing bonds Cr. 3431 Bond par value 2. Periodically, paid interests will be charged to expenses or capitalized: Dr. 635 Financial expenses if posted to financial expenses in the period Dr. 241 Construction in progress if capitalized to value of construction investment asset in progress Dr. 627 Factory overhead cost if capitalized to cost of asset in process Cr. 111, 112,... Interest paid in the period 3. If the interest shall be paid in arrear when bonds fall due , periodically, enterprise must estimate interest expenses payable in the period to expenses or capitalization: Dr. 635 Financial expenses if posted to financial expenses in the period Dr. 241, 627 If capitalized to cost of asset in progress Cr. 335 Accruals the part in interest securities must be paid in the period - When bonds fall due, enterprise must pay the principal and interests to bond holders: Dr. 335 Accruals total bond interests Dr. 3431 Bond par value principal Cr. 111, 112,... 4. If bond interests are paid at the issuing date, bond interest expenses are first debited to account 242 bond interest paid in advance and will be then systematically allocated to costing objects - At bond issuing date: Dr. 111, 112,... Actual receipts Dr. 242 Long term prepaid expenses bond interest paid in advance Cr. 3431 Bond par value -Periodically, bond interests paid in advance are systematically allocated to the borrowing costs in the period: Dr. 635 Financial expenses if charged to financial expenses in the period Dr. 241 Construction in progress if capitalized to cost of construction in progress Dr. 627 Factory overhead cost if it is capitalized to work in process Cr. 242 Long term prepaid expenses details of bond interest paid in advance bond interests allocated in the period 5. Bond issuing costs: - If costs for issuing bonds are insignificant, they should be charged to expenses profit and loss account in the period:

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 635 Financial expenses Cr. 111, 112,... - If bond issuing costs are significant, they should be allocated: Initial entry: Dr. 242

Long term prepaid expenses bond issuing expense Cr. 111, 112,...

Periodically, bond issuing costs are allocated: Dr. 635, 241, 627 allocated bond issuing costs Cr. 242 Long term prepaid expenses detailed of bond issuing costs 6. Bond payments when due: Dr. 3431 Bond par value Cr. 111, 112,... II. Accounting for issued bonds with discounts 1. To reflect actual receipts from issued bonds: Dr. 111, 112,... Amount receipts from selling bonds Dr. 3432 Bond discount the difference between lower receipt and bond par value Cr. 3431 Bond par value 2. If bond interests are paid periodically, they should be charged to expense the profit and loss should account or capitalized: Dr. 635 Dr. 241 Dr. 627 Financial expenses if charged financial expenses in the period Construction in progress if capitalized to construction in progress capitalized Factory overhead cost if capitalized to work in process Cr. 111, 112,... bond interests must be paid in the period Cr. 3432 Bond discount bond interests allocated in the period

3. In the case bond interest are in arrear when bonds fall due - Periodically, enterprise must estimate interest expenses payable in the period: Dr. 635 Financial expenses if charged financial expenses in the period Dr. 241, 627 if capitalized to construction in progress Cr. 335 Accruals bond interests must be paid in the period Cr. 3432 Bond discount bond discount allocated in the period - When bonds fall due, enterprise must pay principal and bond interests to bond holders: Dr. 335 Accruals total bond interests Dr. 3431 Bond par value Cr. 111, 112,... 4. In the case, bond interests are paid at the issuing date, interest expenses will be debited to account 242 bond interests paid in advance and then be allocated systematically to costing objects:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC - When issuing bonds: Dr. 111, 112,... Total actual receipts Dr. 3432 Bond discount Dr. 242 Long term prepaid expenses bond interest paid in advance bond interest paid in advance Cr. 3431 Bond par value - Periodically, interests are charged expenses in the period or capitalized: Dr. 635 Financial expenses if charged to expenses in the period Dr. 241 Construction in process if capitalized to construction in progress Dr. 627 Factory overhead cost if capitalized to work in process Cr. 242 Long term prepaid expenses bond inte interest paid in advance bond interest allocated in the period Cr. 3432 Bond discount bond discount allocated in the period 5. Payments when bonds fall due: Dr. 3431 Bond par value Cr. 111, 112,... III. Accounting for issued bonds with premium: 1. Reflects actual receipts from issuing bonds: Dr. 111, 112 Actual receipts Cr. 3433 Bond premium difference of actual receipt and par value of bonds issued Cr. 3431 Bond par value 2. Where periodically interest was paid: - When interest are charged to expenses or capitalized: Dr. 635 Financial expenses if charged to financial activities in the period capitalized Dr. 241 Construction in progress if capitalized into construction in progress Dr. 627 Factory overhead cost if capitalized into work in process Cr. 111, 112,... bond interests paid in the period - At the same time, bond premium is systematically allocated to decrease borrowing costs in the period: Dr. 3433 Bond premium premium allocated in the period Cr. 635, 241, 627 3. Where bond interest shall be paid later when bonds fall due , periodically the entity should accrue the expenses: - Calculate bond interest and post to relevant accounts: Dr. 635, 241, 627 Cr. 335 Accruals bond interest to be paid in the period
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC - At the same time, allocate the premium to decrease the borrowing cost in the period: Dr. 3433 Bond premium Cr. 635, 241, 627 - Where bonds fall due, the enterprise should pay principal and interest to bond holders: Dr. 335 Accruals bond interest Dr. 3431 Bond par value principal Cr. 111, 112,... 4. Where bond interests are paid at bond issuing date, the bond interest should be debited to account 242 bond interest paid in advance and will be systematically allocated to costing objects: - When issuing bonds: Dr. 111, 112,... actual receipt Dr. 242 Long term prepayment details of bond interest paid in advance Cr. 3433 Bond premium Cr. 3431 Bond par value - Periodically, allocate the prepayment to relevant accounts: Dr. 635 Financial expenses if charged to financial expense in the period Dr. 241 Construction in progress if capitalized into construction in progress capitalized Dr. 627 Factory overhead cost if capitalized in work in process Cr. 242 Long term prepaid expenses details of bond interest paid in advance interest allocated in period At the same time, allocate the bond premium to decrease the borrowing costs in each period : Dr. 3433 Bond premium premium allocated in period Cr. 635, 241, 627

bon

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 344 LONG TERM DEPOSITS RECEIVED This account records deposits that the company receives from other entities or outside persons more than one year term , to ensure business services will be carried out properly with respect to contracts signed. In case, the enterprise should not record to this account for receipt of deposits in kind. They should be kept track in off balance sheet accounts Account 003 - Goods received on consignment for sale . Long-term deposits received must be recorded in detail for each customer. STRUCTURE AND CONTENTS OF ACCOUNT 344 – LONG TERM DEPOSITS RECEIVED Debit: Long term deposits repaid. Credit: Long term deposits received Credit balance: Long term deposits repayable. MAJOR TRANSACTIONS 1. Receipt of deposits from another entity or person outside of the company. entity Dr. 111, 112 Cr. 344 - Long term deposits received details by each customer 2. Repayment of deposits to customers. Dr. 344 - Long term deposits received Cr. 111, 112 3. In case, the entity deposited violates the signed contract and is fined according to the contract: a. Receipt of penalty due to violation of the signed contract: - If deduction into deposits amount: Dr. 344 Long term deposits received Cr. 711 Other income.

b. Repayment of the remaining deposits: Dr. 344 Long term deposits received deducted amount Cr. 111, 112.
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 4. Received and returned deposits in asset Refer to instruction of account 003 on consignment for sale . Goods received

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 347 DEFERRED TAX LIABILITIES This account reflects the balance and movement of deferred tax liabilities. Deferred tax liabilities are determined based on the taxable temporary differences and the current rate of enterprise income tax by the following formula: Deferred tax liabilities = Taxable temporary differences x EIT rate %

THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS r 1. A deferred tax liability should be recognised for all taxable temporary differences, unless the deferred tax liability arises from the initial recogn recognition of an asset or liability in a transaction which at the time of the transaction affects neither accounting profit nor taxable profit tax neither loss . must 2. At the end of the fiscal year, the accountant must determine the taxable temporary differences tax incurred during the year. These differences are tax base to calculate the deferred tax liabilities recorded for the current year. 3. Recognition of deferred tax liabilities must be performed according to regulation as below. Content of the regulation is balance between deferred tax liabilities in this period and deferred tax liabilities in the years before but it are recorded decrease in this period be returned . This regulation including contents as below: If the deferred tax liabilities in this period exceed the amount returned in this period, the deferred accountant would record additional amount of deferred tax liabilities that is the difference of the the deferred tax liabilities incurred and the recoverable amount in the period. If the deferred tax liabilities in this period is lower than the deferred tax liabilities which is record returned in this period, accountant will to record decrease deferred tax liabilities which is the incurred different from the deferred tax liabilities incurred is lower than deferred tax liabilities is returned in this period.

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4. Deferred tax liabilities incurred during the year not relating to items which are recorded rded directly to owner equity shall be recorded as deferred income tax expense. 5. When the taxable temporary differences do not affect taxable profit when assets are returned or obligations are paid , the accountant must decrease the deferred tax liabilities. 6. Major transactions that deferred tax liabilities incurred: Deferred tax liabilities incurred from the taxable temporary differences. For example, the useful lifetime of fixed assets determined by the enterprise is longer than the lifetime regulated by the tax office. Therefore, the depreciation of fixed asset in accounting book is lower than the depreciation that is allowed to deduct into taxable income.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC STRUCTURE AND CONTENTS OF ACCOUNT 347 – DEFERRED TAX LIABILITIES Debit: Decrease reverse of deferred tax liabilities in the period. Credit: Deferred tax liabilities recorded in the period. Credit balance: Deferred tax liabilities balance at the end of the period. MAJOR TRANSACTIONS At the end of the fiscal year, based on the List of deferred tax liabilities , the accountant records List deferred tax liabilities occurred during the year into deferred income tax expenses: 1. If the deferred tax liabilities incurred during year are greater than the reversed amount in the year, the accountant records the addition which is the difference of deferred tax liabilities incurred and the amounts reversed in the year: Dr. 8212 Deferred income tax expenses Cr. 347 Deferred income tax liabilities 2. If the deferred tax liabilities incurred during the year are less than the reversed amount in the year year, the accountant decreased reverse the difference of the deferred tax liabilities incurred reverse during year and the reversed amount in the year: Dr. 347 Deferred income tax liabilities Cr. 8212 Deferred income tax expenses

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 351 PROVISION FOR SEVERANCE ALLOWANCE This account reflects making and using provision for severance allowance of the enterprise. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING THE REGULATIONS 1. The provision for severance allowance is used for payment severance allowance, vocational training for the employees in compliance with the current regulations. 2. The provision for severance allowance is provided and recorded to general and administration expenses in the period. At the year end, the unused amount of provision for severance allowance would be carried forward to the next year. If the provision for severance allowance is not sufficient to cover the actual payment to the resigned and unemployed staff, the payment difference should be recorded to general and administration expenses in the fiscal year. 3. The provision for severance allowance is made at the time of closing books for preparing yearly financial statements. In the case, the entity has to prepare the interim financial statements quarterly , the provision for severance allowance should be made at the end of the quarter. STRUCTURE AND CONTENTS OF ACCOUNT 351 - PROVISIO FOR SEVERANCE ACCOUNT PROVISION ALLOWANCE Debit: Payment made to the employees who are resigned or lost job from the provision for severance allowance. Credit: Making the provision for severance allowance. Credit balance: The provision for severance allowance has not been used yet. MAJOR TRANSACTIONS 1. Making the provision for severance allowance following the current regulations: Dr. 642 General and administration expenses Cr. 351 Provision for severance allowance

2. Payment for severance allowance, vocational training for the employees following the current regulations: Dr. 351 Provision for severance allowance Cr. 111, 112,...

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 3. If the provision for severance allowance is not sufficient to cover the actual payment to the resigned and redundant employees, the difference should be recorded to general and administration expenses in the fiscal year: Dr. 642 General and administration expenses Cr. 111, 112,... 4. At the end of the accounting period, the enterprise determines the amount of provision for severance allowance that should be made. If the provision for severance allowance in the current year is greater than the unused amount in the accounting book, the difference should be recorded as follows: Dr. 642 General and administration expenses Cr. 351 Provision for severance allowance

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 352 PROVISIONS This account is used to reflect the current provision, making and using the provisions of enterprise. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. A provision shall be recognised when: - An enterprise has a present obligation legal or constructive as a result of a past event; - It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and - A reliable estimate can be made of the amount of the obligation. 2. The amount recognised as a provision shall be the best estimate of the expenditure required to the e settle the present obligation at the balance sheet date or at the end of interim period. 3. The provision is made once at the end of the year. If the entity has to prepare interim financial year. statements, the provision shall be made at the end of interim period. In case, the provision required in current period is greater than unused amount of provision made in prior period, the difference shall be recorded to general and administration expenses in current period. In case, the administration provision required in current period is less than unused amount of provision made in prior period, general the difference shall be recorded to decrease the general administration expenses in current period. must Provision for warranty of construction contract must be made for each construction work at the balance sheet date or at the end of the interim period. If the provision for warranty of construction incurred, contract made is greater than actual expenses incurred, the difference shall be recorded to account 711 Other income . 4. A provision shall be used only for expenditures for which the provision was originally recognised. 5. Provisions shall not be recognized for future operating loss unless the liabilities are related to onerous contract and meet the criteria of general recognition for provision. onerous 6. If an enterprise has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision. The provision must be made for individual onerous contract. 7. A provision for restructuring costs is recognised only when the general recognition criteria for provisions set out in paragraph 11 in VAS 18 Provision, contingent asset, contingent liabilities are met. 8. A constructive obligation to restructure arises only when an enterprise: a. Has a detailed formal plan for the restructuring identifying at least following five criteria: The business or part of a business concerned; The principal locations affected; The location, function, and approximate number of employees who will be compensated for terminating their services; The expenditures that will be undertaken; and
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC When the plan will be implemented; and

b. Has raised a valid expectation in those affected that it carries out the restructuring by starting to implement that plan or announcing its main features to those affected by it. 9. A restructuring provision shall include only the direct expenditures arising from the restructuring, which are those that are both: necessarily entailed by the restructuring; and not associated with the ongoing activities of the enterprise. 10. A restructuring provision does not include such costs as: Retraining or relocating continuing staff; Marketing; or Investment in new systems and distribution networks. 11. Provisions usually include the followings: Provision for restructuring; Provision for goods warranty;

Provision for onerous contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it; Other provisions.

record 12. When provision is made, enterprise could record it to general and administration expenses. recorded However, provision for goods warranty is recorded to selling expenses while provision for warranty of construction work is recorded to factory overhead cost. STRUCTURE AND CONTENTS OF ACCOUNT 352 – PROVISIONS Debit: Decrease provisions when arising expenses that are relating to provisions were made; Decrease reverse provisions if it is no longer probable that an outflow of resources re embodying economic benefits will be required to settle the obligation; The difference of the provisions required in the current year and the unused amount of provision made in the prior year.

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Credit: Reflect provision made that posted to expenses. Credit balance: Reflect existing provisions at the end of the period. MAJOR TRANSACTIONS 1. Provision for restructuring
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Dr. 642 General and administration expenses 6426 Cr. 352 Provisions 2. An enterprise has a contract that is onerous in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable costs dedicated in the contract are such costs as compensation and reimbursement due to failure in implementing the obligations. When it is probable that a provision has to be made for the onerous contract, the accountant records the following: Dr. 642 General and administration expenses 6426 Cr. 352 Provisions. nty 3. When the enterprise sells goods and gives warranty card to customers in which guarantees that the obligations to repair the goods detected due to the manufacturer s fault during the warranty period, the enterprise must measure the amount of expenses for each repair level of the warranty obligation. When provision for warranty is determined, the accountant records the following: determined, Dr. 641 Selling expenses. Cr. 352 Provisions. When provisions for warranty of construction work is determined: Dr. 627 Factory overhead cost Cr. 352 Provisions. 4. Other provisions required are recorded to general and administration expenses: Dr. 642 General and administration expenses 6426 Cr. 352 Provisions. 5. Expenses occurred relating to the provision was originally recognised: provision 5.1. Expenses incurred in cash: Dr. 352 Provisions Cr. 111, 112, 331,... 5.2. Expenses occurred relating to the provisions for warranty of goods, construction work was originally recognised such as raw materials, direct labour, fixed asset depreciation, other services rendered outside, etc. a. There is no separate unit taking care of warranty of goods and construction work: - When expenses arising relating to warranty of goods and construction work: Dr. 621, 622, 627,... Dr. 133 VAT deductible if any Cr. 111, 112, 152, 214, 331, 334, 338,... - At the end of the period, the accountant transfers the actual expenses for warranty of goods and construction work incurred during the period:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 154 Work in progress Cr. 621, 622, 627,... - When the repairing for goods and construction work completes, the accountant records: Dr. 352 Provision Dr. 641 Selling expenses the amount of provision for warranty of goods that have not been provided sufficiently Cr. 154 Work in progress. b. There is a separate unit taking care of warranty of goods and construction work. The amount payables to the warranty agency for repairing goods and construction work shall be recorded as follows: Dr. 352 Provisions difference Dr. 641 Selling expenses amount of difference of provision for warranty and actual expenses incurred for repairing goods Cr. 336 Inter-company payables. the 6. At balance sheet date or at the end of the interim accounting period the accounting period , need the enterprise must determine the provisions that need to be made at the end of accounting period. - If the provisions required to be made in the current period are greater than the unused amount of difference provisions made in the prior period, the difference shall be recorded into expenses: Dr. 642 General and administration expenses 6426 provision Dr. 641 Selling expenses for provision for warranty of goods Cr. 352 Provisions. - If the provisions required to be made in the current period are less than the unused amount of difference provisions made in the prior period, the difference shall be reversed into expenses: Dr. 352 Provisions Cr. 642 General and administrations expenses 6426 Cr. 641 Selling expenses for provision for warranty of goods interim - At balance sheet date or at the end for interim accounting period, the provision for warranty construction work for each work: Dr. 627 General and administration expenses Cr. 352 Provisions. 7. The warranty period for construction work is passed. There is no requirement to implement the warranty or the provision for warranty of construction work greater than actual expenses incurred, the difference shall be reversed as follows: Dr. 352 Provisions Cr. 711 Other income. 8. Under certain circumstances, the enterprise can find the third party to pay partial or all expenses for provisions for example: insurer, warranty from the manufacturer . The third party may reimburse all expenses that enterprise paid. When the enterprise receives partial or all compensation from the third party for the provisions:
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Dr. 111, 112,... Cr. 711- Other income.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC CATEGORY 4 OWNERS’ EQUITY This account is used to reflect the current value, the increase and decrease of the equity of joint venture, liabilities limited companies, liabilities partnership or share holders in joint stock companies. Owners equity is the amount that the company is not liable to pay. Owners equity is comprised of the contribution of company s owners and investors or the business results. Therefore, owners equity is not a liability. A company may have more than one equity owners. In State-Owned enterprises, the equity is r. provided by the State, so the State is the owner. In joint ventures, public limited companies, associate companies, capital owners are contributors or organizations, individuals contributing. In contributors joint stock companies, capital owners are share holders. In private companies, capital owners are individuals or families owners. Owners’ equity consists of: Capital contributed by investors to establish or expand the business. The equity owners of establish the company may be the government, and individual or an organization that takes part in a joint venture or share holder, share holders buying and holding securities; Capital surplus due to issuing securities with the price higher or lower than the face with value; Donation, gifts if increase the owners equity ; Equity supplemented from the business income according to prevailing financial policy income regulations or resolution of shareholders or board of management, etc; shareholders The difference from revaluation of assets or exchange rates incurred in construction period, and funds formed from profit after tax investment and development fund, after financial reserve, other funds of owners equity, retained earning capital expenditure, earnings, etc ; The value of treasury share reducing the owners equity.

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THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. The company could actively use its equity and funds according to current financial regulations In principle that it shall ensure that owners equity and funds are properly accounted for and recorded in detail for each source of equity and each owner. Owners equity represents the source of net assets of the company, which do not refer to a particular property, but is a consideration in general. The transfer of capital from one source to another shall be carried in adherence to prevailing financial regulations and through required procedures. Where there are changes in accounting policy or significant errors that should be applied retroactively, the errors should be adjusted to the opening balance of the owners equity after the impact of the errors and change on the owners equity is identified.
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4.

In the case where a company is dissolved, the owners or members who paid in capital only receive the residual amount after all the liabilities have been paid.

Category 4 - Owners’ equity, includes 12 accounts and is divided into 5 groups: Group Account 41 consists of 7 accounts: - Account 411 - Paid in capital; - Account 412 - Asset revaluation reserve; - Account 413 - Foreign exchange differences; - Account 414 - Investment and development fund; - Account 415 - Financial reserve fund; - Account 418 - Other funds; - Account 419 - Treasury share Group Account 42 consists of 1 account: - Account 421 - Undistributed earnings. Group Account 43 consists of 1 account: - Account 431 - Bonus and welfare funds. Group Account 44 consists of 1 account: - Account 441 - Funds for capital expenditures. Group Account 46 consists of 2 accounts: - Account 461 - Subsidy funds from State Budget; - Account 466 - Sources for acquisition of fixed assets.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 411 PAID-IN CAPITAL

This account is used to reflect the value at present as well as the increase and decrease of enterprise s paid in capital. In a SOE, paid in capital consists of paid in capital issued from the State, from other internal companies in the corporate, capital from the parent company to the subsidiaries, asset revaluation reserves if being allowed to increase or decrease the paid in capital , or supplement from funds, from profit after tax of business activities or non-refundable grants from local and foreign organizations, individuals. In a joint venture, paid in capital is contributed by the joint venture parties and increased by the result of business activities. In a joint stock company, paid in capital is contributed by share holders in type of buying securities, or supplemented from business profit according to resolution of the board of share according holders or regulations in the operation rules of the company, from capital surplus from selling securities with the price higher than the face value. In public limited companies and associate companies, paid in capital is contributed by members, companies, supplement from the profit after tax of business activities. In a private company, paid in capital consists of capitals contributed by the company s owners or supplemented from the profit after tax of business activities. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Record into Account 411 Paid in capital based on the actual capital contributed when newly established or supplemented to expand the business. 2. Record in details the paid in capital according to the each source to raise capital, i.e for according each contributing organizations, individuals. a b For State-Owned enterprises, paid in cap capital can be recorded in details as follows: Owners equity: is the capital provided from the State including capital from State Budget, such as: asset revaluation reserve, etc. ; Additional capital from business profit or donation, gifts, etc. For joint ventures, public limited companies and associate companies, paid in capital is recorded in details as follows: - Owners equity: is the capital of contributing members; - Other capitals: is the capital supplemented from profit after tax or donation, gifts.

c For joint stock companies, paid in capital is recorded in details as follows: - Owners equity: is the money or assets contributed by share holders according to the face value of issued securities; - Capital surplus: is the difference between the face value and issuing price of securities; - Other capitals: is the additional capital from profit after tax or donation, gifts not yet recorded for each share holder.
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 3. For joint ventures, record in details the paid in capital for each parties of capital contributors. Each time of capital contributions, capital amount, capital kinds needs detailed record, such as: initial capital, additional capital from business results. Only decrease the paid in capital when the entity makes a reimbursement of capital to the State Budget, share holders or joint venture partners, or transfers the capital to another internal companies in the corporate, or compensates for losses according to the resolution of the board of share holders, or when the entity dissolves. In the case where an entity receives contribution to joint ventures, joint stock companies from share holders by foreign currencies, the value is converted into VND using the real exchange rate or average exchange rate on the inter-bank foreign currencies market published by the Vietnam State bank at the time of creating. In the operational period, it ce is not allowed to revalue the credit balance Account 411 Paid in capital in foreign currencies. In the case of contribution capital in-kind, the paid in capital is increased according to the revalued amount of assets agreed by capital contributors. For joint stock companies, share contribution by share holders are recognized at the contribution actual share price but recorded into two different categories namely Owners equity different share capital and capital surplus share premium . Share capital is recorded at share s premium face value. Capital surplus reflects the difference between the actual receipts and the face difference value of the initial or additional share issuance; and the difference between the actual issuance; amount received when reissuing treasury shares and value at the buy-back price. shares Particularly, when buying back and cancel shares at the day of purchase, the paid in capital at the day of purchase should be reduced by the value of bought back shares at the actual price detailed by the face value and the capital surplus of bought-back securities.

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STRUCTURE AND CONTENTS OF ACCOUNT 411 – PAID-IN CAPITAL Debit: Paid in capital reduced due to: - Returning capital to capital owners; - Dissolving, liquidating the entity; - Compensating for losses according to the reso resolution of the board of share holders for joint stock companies ; - Buying back securities for cancellation for joint stock companies . Credit: Paid in capital increased due to: - Capital contribution by owners initial and additional capital contribution ; - Increased capital from operating profit; - Share issued at the price higher than the face value; - Value of gifts, donation after paying tax , resulting in increased paid-in capital Credit balance: The current paid-in capital of the enterprise Account 411 – Paid- in capital, includes three sub-accounts:
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- Account 4111- Share capital: This account reflects the actual capital contributed by owners according to the company s regulations. For joint stock companies, capital from issuing stocks is recorded into this account at the face value. - Account 4112- Capital surplus: This account reflects the difference between value of stock at higher actual issuing price and that at the face value; and the difference between value of treasury shares at actual re-issued price and that at the buy-back price for joint stock companies . - Account 4118- Other capital: This account reflects the paid in capital created from operating profits or gifts, donation and revaluation of assets if these transactions are eligible for increasing and/or decreasing the paid in capital . MAJOR TRANSACTIONS l, 1. When receiving the paid in capital, investment capital from owners: Dr. 111, 112 Dr. 211 - Tangible fixed assets Dr. 213 - Intangible fixed assets Cr. 411- Paid in capital 4111 . share 2. When receiving money for share buying from share holders with the issuing price equal to the face value: Dr. 111, 112 face value Cr. 411 - Paid in capital Acc. 4111 face value . 3. When receiving money for share buying from share holders with the issuing price higher than share the face value: Dr. 111,112 issuing price Cr. 411 - Paid in capital Account 4111 face value and Cr. 4112 difference between the issuing price and the face value 4. When receiving the money from reissuing the treasury share: Dr. 111,112 reissuing price Dr. 411 - Paid in capital 4112 difference between the value of treasure shares at the lower reissuing price and that at the book value Cr. 419 - Treasury share at book value Cr. 411 - Paid in capital 4112 difference between the value of treasure shares at the higher reissuing price and that at the book value . 5. Supplement the paid in capital from the investment and development fund where allowed by the board of management or the authorities: Dr. 414 - Investment and development fund Cr. 411 - Paid in capital. 6. Supplement the paid in capital from the asset revaluation reserve, when approved: Dr. 412 - Asset revaluation reserve
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 411 - Paid in capital. 7. When the construction supported by the funds for capital expenditures is completed or the fixed assets are purchased and put into use for production, business activities, and the investment capital is approved, increase the historical cost of fixed assets, simultaneously increase the paid in capital: Dr. 441 - Funds for capital expenditures Cr. 411 - Paid in capital. 8. When members of a corporation, subsidiaries of a parent company receive the capital from the corporation, parent company to increase the paid in capital, the accountant of the sub-level entity should record: Dr. 111, 112 Cr. 411 - Paid in capital. 9. When receiving the donation, gifts: Dr. 111,112 Dr. 211 Tangible fixed assets Dr. 152 - Raw materials Cr. 711 - Other income. After paying duties to the State, if the rest value is allowed to increase the paid in capital 4118 : Dr. 421 - Undistributed earnings Cr. 411 - Paid in capital 4118 . 10. Supplement the paid in capital due to paying the dividend to the share holders by shares: Dr. 421 - Undistributed earnings Dr. 411 - Paid in capital 4112 difference between issuing price and the face value Cr. 411 - Paid in capital Account 4111 face value and Account 4112 difference between issuing price and the face value . 11. When receiving the paid in capital from joint venture parties: Dr. 111,112, 211, 213 Cr. 411 - Paid in capital 4111 . 12. When a joint stock company buy back and cancel its own shares to at the day of repurchase: 12.1. If the buy-back price is higher than the face value: Dr. 411 - Paid in capital Account 4111 face value Dr. 411- Paid in capital Account 4112 difference between buy-back price and the face value Cr. 111,112 12.2. If the buy-back price is lower than the face value: Dr. 411- Paid in capital 4111 face value Cr. 111,112 Cr. 411- Paid in capital 4112 difference between the buy-back price and the face value .
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13. When cancelling the treasury shares: Dr. 411- Paid in capital Account 4111 face value Dr. 411- Paid in capital Account 4112 difference between the buy-back price and the face value Cr. 419 - Treasury share buy-back price . 14. When return capital to the contributors: Dr. 411- Paid in capital 4111, 4112 Cr. 111,112 15. When member companies, subsidiaries return the paid in capital to the corporation, parent company in the method of reducing the capital, the accountant of the sub-level should record: Dr. 411 - Paid in capital Cr. 111, 112 16. When the paid in capital of a company is asked to transfer capital to another company as the asked decision of the authority if any : - If transferred capital is in the form of fixed assets: Dr. 411 - Paid in capital Dr. 214 - Accumulated depreciation and amortization Cr. 211 Tangible fixed assets Cr. 213 - Intangible fixed assets. - If transferred capital is in the form of cash: Dr. 411 - Paid in capital Cr. 111, 112 17. Accounting for purchasing and selling assets/capital associated with business combination when purchaser issue shares is governed in the Circular guiding VAS 11 Business combination .

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 412 ASSET REVALUATION RESERVE This account is used to reflect the current asset revaluation reserve and its treatment in the enterprise. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Re-valued assets are normally fixed assets, investment property. In some specific situations, it is possible and necessary to revalue the raw materials, tools and supplies, finished goods, and work in process, etc. 2. Asset revaluation reserve is recorded into this account in following situations: Revaluations are required by the State; State-owned-enterprises are equitized; Other situations are required law such as conversion of the company s ownership 3. This account does not reflect the difference resulted from asset revalu resulted revaluation for the purpose of investment in joint ventures or subsidiaries. The difference resulted from asset revaluation under these cases is recognized in Account 711 Other income if profitable or Account 811 Other expenses if loss . 4. The asset is revalued based on the price list regulated by the State or specified by the assets regulated valuation committee. 5. Asset revaluation reserve arising from revaluation of assets is recorded and treated in compliance with the current financial regulations. STRUCTURE AND CONTENTS OF ACCOUNT 412 – ASSET REVALUATION ACCOUNT RESERVE Debit: Credit: -

The decreased difference due to revaluation; The increased difference recorded due to revaluation. revaluation

The increased difference due to revaluation; The decreased difference recorded due to revaluation of assets. Asset revaluation reserve, may have the ending balance in the debit side or credit

Account 412 side:

Debit ending balance: Outstanding decreased difference due to revaluation of assets. Credit ending balance: Outstanding increased difference due to revaluation of assets.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC MAJOR TRANSACTIONS 1. When the State makes decision to revalue the fixed assets, investment property, raw materials, merchandise goods, etc or the revaluation is required when privatizing the State-owned enterprises, the companies conduct verification and revaluation of the assets and record the difference arisen from asset revaluation into accounting books. a. Revaluation of materials, merchandise goods: - If the revalued follows: Dr. 152 Dr. 153 Dr. 155 Dr. 156 cost is higher than the book value, the increased difference should be recorded as Raw materials Tools and supplies Finished goods Merchandise goods Cr. 412 Asset revaluation reserve.

- If the revalued cost is lower than the book value, the decreased value should be recorded as follows: shoul value, Dr. 412 Asset revaluation reserve Cr. 152 Raw materials Cr. 153 Tools and supplies Cr. 155 Finished goods Cr. 156 Merchandise goods. b. Revaluation of fixed assets and investment property. - Based on the result of examination and revaluation of fixed assets, investment property: + The cost, net book value, accumulated depreciation are increased: Dr. 211 - Tangible assets the increased cost Dr. 213 - Intangible assets land use right the increased cost Dr. 217 - Investment property the increased cost Cr. 214 - Accumulated depreciation and amortization accumulated depreciation/amortisation being increased Cr. 412 - Asset revaluation reserve the rest value being increased . + The cost, net book value, accumulated depreciation are decreased: Dr. 412 - Asset revaluation reserve the net book value being decreased Dr. 214 - Accumulated depreciation and amortization the accumulated depreciation being decreased Cr. 211 - Tangible assets the historical cost being decreased Cr. 213 - Intangible assets land use right The historical cost being decreased Cr. 217 - Investment property the historical cost being decreased . 2. At the end of a fiscal year, asset revaluation reserve is treated in compliance with the decision of the authority: - If Account 412 has the credit ending balance and there is a decision of increasing paid in capital: Dr. 412 Asset revaluation reserve Cr. 411 Paid in capital
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- If Account 412 has the debit ending balance, there is a decision of reducing paid in capital: Dr. 411 Paid in capital Cr. 412 Asset revaluation reserve.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 413 FOREIGN EXCHANGE DIFFERENCES This account is used to reflect the foreign exchange differences arisen in the process of construction investment pre-operating period ; foreign exchange differences resulted from revaluation of monetary items denominated in foreign currencies at the balance sheet date and the treatment to those foreign exchange differences. Foreign exchange differences are the differences arisen from the actual exchange or exchange of the same amount of foreign currency into the accounting currency at different foreign exchange rate. Foreign exchange differences are arisen mainly in following situations: 1. The actual purchase and sale activities, exchange, and payment of business trasnsactions that exchange, zed are made in foreign currency in the period realized foreign exchange differences ; actual foreign exchange differences arisen in the period realized foreign exchange differences in the company realized includes: - Realized foreign exchange differences arisen in the period of construction investment preoperating period ; - Realized foreign exchange differences arisen in the operating period, including construction investments activities during operating period of a business. 2. Revaluation of monetary items denominated in foreign currencies at the balance sheet date. Foreign exchange differences arisen due to the revaluation of monetary items in foreign the currencies at the balance sheet date includes: - Foreign exchange differences at the balance sheet date due to the revaluation of monetary items in foreign currencies during the construction investment period pre-operating period ; construction - Foreign exchange differences at the balance sheet date due to the revaluation of monetary items in foreign currencies involving in business operating activities. For companies using the financial instruments to hedge foreign exchange risk, borrowings and payables in foreign currencies are recorded at the actual foreign exchange rates (at the transaction dates). It is not allowed to revalue the borrowings and payables in foreign currencies that have been hedged for foreign exchange by financial instruments. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. The principle for recording business activities conducted in foreign currencies and revaluing monetary items in foreign currencies at the balance sheet date. 1.1. Enterprises must record business transactions in foreign currencies in the accounting books and prepare the financial statement in VND or the approved accounting currency unit after approved by the Ministry of Finance . When converting the foreign currency into the VND or the approved accounting currency unit, the company has to use the actual exchange rates ruling at the transaction dates or the inter-bank exchange rates published by the State Bank of Vietnam. Companies have to simultaneously record the original currencies in details for accounts of cash on hand, cash at bank, cash in transit, accounts payable and receivables amount and Account 007 Foreign currencies Off balance sheet account .
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1.2. For accounts of revenues, stocks, fixed assets, production costs, other costs, the debit side of the accounts of cash and liabilities; the credit side of account liabilities: business transactions in foreign currencies must be recorded in VND or in the approved accounting currency unit at the exchange rate ruling at the transaction dates the actual exchange rate or average inter-bank exchange rates published by the State Bank of Vietnam at the date of transactions . 1.3. For the credit side of cash accounts, business transactions in foreign currencies should be recorded in the accounting book in VND or in the approved accounting currency unit at the accounting exchange rates using one of among specific rate, weighted average rate, FIFO or LIFO rate . 1.4. For the debit side of liabilities accounts or the credit side of accounts receivable, transactions in foreign currencies should be recorded in VND or the approved accounting currency unit at the accounting exchange rates. 1.5. At the end of the accounting period, the company has to revalue all the monetary items in foreign currencies at the average inter-bank exchange rate published by the State Bank of Vietnam at end of the accounting period. 1.6. If the company sell for and purchases foreign currencies by the VND, the actual exchange foreign rate at the date of the transactions should be used. 2. The treatment principles of foreign exchange differences. 2.1. Treatments of foreign exchange differences arisen in the accounting period and the differences differences resulted from revaluation at the end of the business period, including the construction incl investment activities for business that has construction investment activities during the operating construction period are as follows: - All foreign exchange differences arisen in the period and foreign exchange differences resulted from revaluation of monetary items denominated in foreign currencies at the balance sheet date will be recorded immediately into the financial expenses or income in that period. - Companies are not allowed to use foreign exchange differences resulted from revaluation of exchange monetary items in foreign currencies at the ba balance sheet date to distribute profit or pay dividends. 2.2. Treatments of foreign exchange differences arisen in the period and differences resulted from revaluation at the end of the construction investment activities pre-operating period are as follows: - In the period of construction investments, the realised foreign exchange differences and the foreign exchange differences resulted from revaluation at the balance sheet date of monetary items denominated in foreign currencies will be accumulated on the Balance sheet under item Foreign exchange differences . - When the construction investment is finished, the accumulated foreign exchange differences arisen in the construction investment period foreign exchange gains or losses are not capitalized into the value of the fixed assets but 1 if the differences are insignificant are low are debited/credited all to the financial expenses/incomes of the fiscal year when the fixed assets and investment properties are completed and put into use or 2 are allocated to the profit and loss
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC accounts) over not more than five years constructed assets put into use . if the differences are significant at the time the

2.3. Foreign exchange differences resulted from conversion of the financial statements of integrated foreign business entities are recognised immediately in financial expenses/income in the period. 3. Enterprises are only allowed to record foreign exchange differences into Account 413 Foreign exchange differences in the following cases: - Realized foreign exchange differences and foreign exchange differences resulted from revaluation of monetary items in foreign currencies at the balance sheet date of construction investment activities during pre-operating period of newly established enterprises when the investment has not yet been completed ; - The foreign exchange differences resulted from revaluation of monetary items denominated in foreign currencies at the balance sheet date during operating period, including construction investment activities business entities that have the construction inv investment during operating period . 4. At the balance sheet date, the accountant revalue monetary items including ending balance of revalue accounts Cash on hand , Cash in bank , Cash in transit , cash equivalents, payables, receivables denominated in foreign currencies at the average exchange rate on the inter-bank foreign currencies market as published by the State Bank of Vietnam at the balance sheet date. State The foreign exchange differences from revaluation of the ending balance of monetary items in revaluation foreign currencies at the balance sheet date during operating period are recorded into Account during 413 Foreign exchange differences . 5. For companies not specializing in selling and purchasing foreign currencies, transactions of purchases and sales of foreign currencies should be converted into VND at the actual selling or buying exchange rates. The exchange rate differences between the actual buying and selling rates differences of should be recorded into Account 515 Financial incomes or Account 635 Financial expenses . STRUCTURE AND CONTENTS OF ACCOUNT 413 – FOREIGN EXCHANGE DIFFERENCES Debit: - Foreign exchange differences resulted from revaluation of monetary items in foreign currencies exchange rate losses at the balance sheet date of business activities, including construction investment business entities with the construction investment activities during operating period ; - Foreign exchange differences arisen and revaluation of monetary items in foreign currencies exchange rate loss of construction investment pre-operating period ; - Transfer the foreign exchange differences resulted from revaluation of monetary items in foreign currencies at the balance sheet date exchange rate gains of business activities into financial income; - Transfer all the foreign exchange differences arisen and revaluation of monetary items in foreign currencies exchange rate gains of business activities in construction investment when finishing the construction investment period into financial incomes or deferred income if allocated .
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Credit: - Foreign exchange differences resulted from revaluation of monetary items in foreign currencies exchange rate gains at the balance sheet date of the business activities, including the construction investment activities business entities with construction investment activities during operating period ; - Foreign exchange differences arisen or resulted from revaluation of monetary items in foreign currencies exchange rate gains of construction investment pre-operating period ; - Transfer the foreign exchange differences resulted from revaluation of monetary items in foreign currencies exchange rate loss at the balance sheet date of the business activities into financial expenses; - Transfer all the foreign exchange differences arisen or resulted from revaluation of monetary nge construc items in foreign currencies exchange rate loss of the construction investment when finishing the construction investment period into financial expenses or into long-term prepaid expenses if financial allocated . Account 413 “Foreign exchange differences” may have the credit ending balance or debit ending balance. Debit balance: The foreign exchange differences arisen or resulted from revaluation of monetary items in foreign resulted currencies exchange rate losses of the construction investment pre-operating period, the construction investment not yet completed at the balance sheet date. Credit balance: The foreign exchange differences arisen and revaluation of monetary items in foreign currencies revaluation onstruction exchange rate gains of the construction investment pre-operating period, the investment not yet completed at the balance sheet date. Account 413 - Foreign exchange differences has 2 sub-accounts: - Account 4131 - Foreign exchange differences res resulted from revaluation at the balance sheet date: Reflect the foreign exchange differences resulted from revaluation of monetary items in foreign currencies exchange rate gains and losses at the balance sheet date of business activities; including the construction investment business entities with construction investment activities during operating period . - Account 4132 - Foreign exchange differences in the construction investment period: Reflect the foreign exchange differences arisen and exchange rate differences resulted from revaluation at the balance sheet date of monetary items in foreign currencies exchange rate gains and losses of the construction investment pre-operating period . MAJOR TRANSACTIONS I. Accounting for foreign exchange differences arisen in the period of business activities, including the construction investment of the production and trading entities
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 1. When purchase materials, merchandise goods, fixed assets, services and pay by foreign currencies: - If exchange rate loss created in the transaction of purchasing materials, merchandise goods, fixed assets, services: Dr. 151, 152, 153, 156, 157, 158, 211, 213, 217, 241, 623, 627, 641, 642, 133 according to the exchange rate at the transaction day Dr. 635 - Financial expenses exchange rate loss Cr. 111 1112 , 112 1122 according to the accounting book value . - If exchange rate gains created in the transaction of purchasing materials, merchandise goods, fixed assets, services: Dr. 151, 152, 153, 156, 157, 158, 211, 213, 217, 241, 623, 627, 641, 642, 133 according the exchange rate at the transaction day Cr. 111 1112 , 112 1122 according to the accounting book value according Cr. 515 Financial income exchange rate gains . 2. When receive materials, merchandise goods, fixed assets, and services from the supplier but not yet paid, or when make the short term borrowings, long-term borrowings, long-term liabilities borrowings, or internal liabilities, etc by foreign currencies, based on the exchange rate at the transaction day: based Dr. 111, 112, 152, 153, 156, 211, 627, 641, 642 according the exchange rate at the transaction day Cr. 331, 311, 341, 342, 336 according to the exchange rate at the transaction day . payable 3. When pay the payables by foreign currencies payable to the seller, short-term loan, long-term loan, long-term liabilities, internal liabilities, etc : transaction - If exchange rate loss created in the transaction of paying payable by foreign currencies: Dr. 311, 315, 331, 336, 341, 342 accounting book rate Dr. 635 - Financial expenses exchange rate loss expenses Cr. 111 1112 , 112 1122 accounting book rate . - If exchange rate gains created in transaction of paying payable by foreign currencies: transaction Dr. 311, 315, 331, 336, 341, 342 accounting book rate Cr. 515 - Financial income exchange rate gains Cr. 111 1112 , 112 1122 accounting book rate . 4. When it is created income or other income in foreign currencies, based on the exchange rate at the transaction day: Dr. 111 1112 , 112 1122 , 131 the exchange rate at the transaction day Cr. 511, 711 the exchange rate at the transaction day . 5. When it is created receivables in foreign currencies: Dr. 136, 138 the exchange rate at the transaction day Dr. 635 - Financial expenses exchange rate loss Cr. 111 1112 , 112 1122 accounting book rate Cr. 515 - Financial income exchange rate gains . 6. When receive the receivables in foreign currencies receivable from customers, internal receivables, etc :
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC - If it is created exchange rate loss in transaction of paying payables by foreign currencies: Dr. 111 1112 , 112 1122 the exchange rate at the transaction day Dr. 635 - Financial expenses exchange rate loss Cr. 131, 136, 138 accounting book rate . - If it is created profit from foreign exchange differences when paying the receivables by foreign currencies: Dr. 111 1112 , 112 1122 the exchange rate at the transaction day Cr. 515 - Financial income exchange rate gains Cr. 131, 136, 138 accounting book rate . II. Accounting for foreign exchange differences arisen in the period of construction investment (pre-operating period) ndise 1. When receive purchased materials, merchandise goods, fixed assets, services, construction and instalment from sellers or contractors: - If it is created exchange rate loss in transaction of paying by foreign currencies, the accounting transaction entry should be recorded as follows: Dr. 151, 152, 211, 213, 241... the exchange rate at the transaction day Dr. 413 - Foreign exchange differences 4132 exchange rate loss Cr. 111 1112 , 112 1122 accounting book rate . - If exchange rate gains are arisen in transaction of paying by foreign currencies, the entry should be recorded: Dr. 151, 152, 211, 213, 241... the exchange rate at the transaction day Cr. 111 1112 , 112 1122 accounting book noted rate Cr. 413 - Foreign exchange differences 4132 exchange rate gains . 2. When paying payables by foreign currencies payables to sellers, long-term loan, short-term loan, internal loan if any ... : - If it is created exchange rate loss in transaction of paying payables by foreign currencies, the transaction accounting entry should be recorded as follows: Dr. 311, 315, 331, 336, 341, 342... accounting book rate Dr. 413 - Foreign exchange differences 4132 exchange rate loss Cr. 111 1112 , 112 1122 accounting book rate . - If exchange rate gains are arisen in transaction of paying payables by foreign currencies, the accounting entry should be recorded as follows: Dr. 311, 315, 331, 336, 341, 342... accounting book rate Cr. 111 1112 , 112 1122 Accounting book rate Cr. 413 - Foreign exchange differences 4132 exchange rate gains . 3. Annually, exchange rate differences done created in the construction investment pre-operating period will be recorded accumulated into Account 413 Foreign exchange differences 4132 until completing the construction investment. 4. When complete the construction investment period before operation , transfer the realised foreign exchange differences the net value after balance the created value on the debit and the credit side of Account 4132 of the construction investment pre-operating period into Account 413 Foreign exchange differences Account 4132 immediately into financial expenses if the value is low , or transfer if the value is high to Account 242 Long-term prepaid if exchange
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC rate loss , or transfer immediately if the value is low into financial income, or transfer if the value is high to Account 3387 Deferred income if exchange rate gains to allocate in the period of not over 5 years: - In case of the exchange rate gains, the entry as follows: Dr. 413 - Foreign exchange differences 4132 Cr. 3387 - Deferred income exchange rate gains if allocated ; or Cr. 515 - Financial income if record immediately into financial income - In case of exchange rate losses, the accounting entry should be recorded as follows: Dr. 635 - Financial expenses if charged into financial expenses Dr. 242 - Long-term prepaid if allocated Cr. 413 - Foreign exchange differences 4132 . 5. The treatment to realised foreign exchange differences exchange rate gains or loss in the differences period of construction investment accumulated to the time of put the fixed assets into use for business and production activities: - If the exchange rate losses are allocated, periodically allocate the differences of realised periodically exchange rate losses arisen in the period of construction investment into financial expenses of the construction fiscal year when completing the construction investment period and put the fixed assets into use, investment the accounting entry should be recorded as follows: Dr. 635 - Financial expenses exchange rate losses Cr. 242 - Long-term prepaid. - If the exchange rate gains are allocated, periodically allocate the difference of realised exchange periodically rate losses arisen in the period of construction investment into financial expenses of the fiscal investment year when completing the construction investment period and put the fixed assets into use, the following entry should be recorded: Dr. 3387 - Deferred income Cr. 515 - Financial income exchange rate gains . III. Accounting for foreign exchange differences r resulted from revaluation at the end of the fiscal year of monetary items in foreign currencies 1. Accounting for foreign exchange differences resulted from revaluation of monetary items in foreign currencies at the balance sheet date: At the balance sheet date, companies have to revalue monetary items in foreign currencies the currency units are different from the approved accounting currency unit using the average exchange rate on the inter-bank foreign currencies market published by the State Bank of Vietnam at the end of the fiscal year, which might result in foreign exchange differences gains or loss . Companies have to record details of foreign exchange differences resulted from revaluation of monetary items in foreign currencies of the construction investment activities pre-operating period - Account 4132 and during operating period Account 4131 : - If exchange rate gains are arisen, the accounting entry should be recorded as follows: Dr. 111 1112 , 112 1122 , 131, 136, 138, 311, 315, 331, 341, 342 Cr. 413 - Foreign exchange differences 4131, 4132 .
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC - If created exchange rate loss is created, the accounting entry should be recorded as follows: Dr. 413 - Foreign exchange differences 4131, 4132 Cr. 111 1112 , 112 1122 , 131, 136, 311, 315, 331, 341, 342 2. Accounting for treatment on foreign exchange differences resulted from revaluation of monetary items in foreign currencies at the balance sheet date: 2.1. Treatment on foreign exchange differences resulted from revaluation of monetary items in foreign currencies of business operation at the balance sheet date including the construction investment of production and business entities with construction investment activities during operating period : - Transfer all the foreign exchange differences resulted from revaluation at the balance sheet date net of the debit side and credit side of Account 4131 into financial expenses if exchange rate losses , or financial income if exchange rate gains to determine the business result: + Transfer the exchange rate gains from revaluation at the balance sheet date into revaluation financial income, the accountant should record: Dr. 413 - Foreign exchange differences 4131 Cr. 515 - Financial income if exchange rate gains . + Transfer exchange rate loss from revaluation at the end of the fiscal year into financial expenses, the accounting entry should be recorded as follows: Dr. 635 - Financial expenses if exchange rate loss Cr. 413 - Foreign exchange differences 4131 . 2.2. Treatment on foreign exchange differences resulted from revaluation at the balance sheet date of monetary items in foreign currencies of the construction investment pre-operating period : - In the period of construction investment and the company has not yet come into commercial and operation pre-operating period), the foreign exchange differenc resulted from revaluation period), differences at the balance sheet date will be accumulated into Account 413 Foreign exchange accumulated differences Account 4132 . The debit balance, or credit balance will be reflected on the balance sheet. - When finishing the construction investment period and the fixed assets put into use for production and business activities, the debit balance or credit balance Account 413 Foreign exchange differences Account 4132 which reflects the foreign exchange differences resulted from revaluation of monetary items in foreign currencies at the balance sheet date not including the revaluation of monetary items in foreign currencies involved in the construction investments at the time of putting the constructed assets into use will be treated as follows: + Transfer the debit balance Account 413 Foreign exchange differences 4132 to Account 635 Financial expenses or to Account 242 Long-term prepaid if significant to systematically allocate the exchange rate losses of the construction investment period over the period of not more than five years from the completion of the investment period into financial expenses. The accounting entry: Dr. 635 - Financial expenses if record into expenses immediately
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 242 - Long-term prepaid if allocated Cr. 413 - Foreign exchange differences 4132 . + Transfer the credit balance Account 413 Foreign exchange differences 4132 to Account 515 Financial income or to Account 3387 Deferred income if significant to systematically allocate the exchange rate gains of the construction investment period over the period of not more than five years from the completion of the investment period into financial income. Accounting entry: Dr. 413 - Foreign exchange differences 4132 Cr. 3387 - Deferred income if allocated Cr. 515 - Financial income if record into financial income immediately .

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 414 INVESTMENT AND DEVELOPMENT FUND This account is used to record the current value, the increases and decreases of the enterprise s investment and development fund. The investment and development fund is created from the business profit after tax and used to expand the business activities of the enterprise both in scale and depth. The creation and use of this fund must comply with the current financial policy applied to each kind of business: Limited Liabilities Company, private company, etc MAJOR TRANSACTIONS 1. In the period, when increase the investment and development fund from undistributed earning: Dr. 421 - Undistributed earnings Cr. 414 - Investment and development fund 2. At the end of the period, determine the value of investment and development fund that has value been created and account for the increasing value: Dr. 421 - Undistributed earnings Cr. 414 - Investment and development fund 3. When fixed assets purchased or construction created from the investment and development fund complete and come into use for production and trading activities: Dr. 211 - Tangible fixed assets Cr. 241 Construction in progress Cr. 111, 112 in case of purchase of fixed assets . Simultaneously, increase the paid in capital, decrease the investment and development fund: decrease Dr. 414 - Investment and development fund Cr. 411 Paid in capital 4. The investment and development fund is increased by the holding company: Dr. 111, 112 Cr. 414 - Investment and development fund 5. Transfer from the investment and development fund to the holding company or other entities: Dr. 414 - Investment and development fund Cr. 111, 112

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 415 FINANCIAL RESERVE FUND This account is used to record the current value, the creation and use of financial reserve fund of an enterprise. The financial reserve fund is increased from business profit after tax. The increase, decrease of the financial reserve fund must obey current financial policy. STRUCTURE AND CONTENT OF ACCOUNT 415 - FINANCIAL RESERVE FUND Debit: - The financial reserve fund to the holding company - Other decreases of financial reserve fund Credit: Increases of financial reserve fund due from undistributed earnings or given from lower entities. undistributed MAJOR TRANSACTIONS 1. Increase of the financial reserve fund from undistributed earnings: Dr. 421 - Undistributed earnings Cr. 415 Financial reserve fund 2. Increase of the financial reserve fund given from lower entities: Dr. 111, 112, 136 Cr. 415 - Financial reserve fund 3. Decrease of financial reserve fund due to hand to the holding company: Dr. 415 - Financial reserve fund Cr. 111, 112, 336

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 418 OTHER FUNDS This account is used to record the current value, the increase and decrease of other funds belonging to the owners, such as fund to promote the management, etc. Other funds is created from business profit after tax and used for promotion purposes or other purposes of the board of director, board of management. The transfer and use of other funds must be in compliance with the current financial policy applied to each type of business: Stated Owned Enterprises, joint stock company, Limited Liabilities Company, private company, etc. STRUCTURE AND CONTENTS OF ACCOUNT 418 – OTHER FUNDS Debit The use of other funds of the enterprise. Credit Increase of other funds created from business profit after tax. Credit balance Current value of other funds. MAJOR TRANSACTIONS 1. Increase of other funds from business profit after tax: Dr. 421 Undistributed earnings Cr. 418 Other funds

2. Other funds are given by the holding company: Dr. 111, 112, 136 Cr. 418 Other funds 3. Other funds are given by the lower entities: Dr. 418 Other funds Cr. 111, 112, 336

4. Use other funds to promote the board of management, board of director: Dr. 418 Other funds Cr. 111, 112

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 419 TREASURY SHARE This account is used to reflect the balance and movement of the shares that were issued to the public, yet bought back by the company in order to reissue those shares later on called treasury share . The treasury shares are shares that were issued by a company and then bought back by that company. However those shares shall not be destroyed but be reissued to the public at a specific period of time according to laws and regulations on securities. Treasury shares held by the company shall not get dividends and have the vote right or the right of receiving assets sharing when the company in dissolution. When distributing dividends to shareholders, treasury shares being kept by the company are considered as securities not yet sold. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. The value of treasury share is recorded into this account according to the actual buy-back price, including the buy-back price and expenses directly related to the buy back of securities, such as services and information expenses, etc. preparing 2. At the end of the accounting period, when preparing the financial statement, the actual value of treasury share is reduced from the owner equity and presented as negative figure on the balance sheet. 3. This account does not reflect the value of shares that the company buys from other joint stock companies for investment purposes. the 4. When the company buys back the shares issued by that company in order to destroy them right away at the time of purchase, the value of those shares shall not be recorded into this account but directly reduced account of paid-in capital and capital surplus refer to guidance of account 411contributed capital . reissued, 5. The cost of the treasury share when being reissued, or when being used to pay dividends, bonus, etc. shall be calculated by weight average cost method. STRUCTURE AND CONTENT OF ACCOUNT 419 - TREASURY SHARE Debit: Actual value of treasury share when buying. Credit: Actual value of treasury share being reissued, shared dividend or damaged. Debit balance: Actual value of treasury share which is currently hold by the company.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC MAJOR TRANSACTIONS 1. Accounting for buying back shares which were issued by the company: - When a company completes procedures for buying back the shares issued by that company as stipulated by laws and regulations, the company shall pay shareholders at the agreed price, the accounting entry should be recorded as follows: Dr. 419- Treasury share bought-back price Cr. 111, 112 - Expenses directly related to the buying back of securities shall be recorded as follows: Dr. 419- Treasury share Cr. 111, 112 2- Reissuing the treasury shares: - When reissuing treasury shares with the price that is higher than the bought-back one, the price accounting entry should be recorded as follows: Dr. 111,112 total payment Cr. 419 - Treasury share bought-back price Cr. 411 Paid-in capital 4112 difference between reissuing price and the bought-back one - When reissuing treasury shares to the public with the price that is lower than the bought-back with one, the accounting entry should be recorded as follows: Dr. 111,112 total payment price of reissuing securities Dr. 411- Paid-in capital 4112 difference between reissuing price and bought- back one between Cr. 419- Treasury share bought-back price 3- Destroying the treasury shares: Dr. 411- Paid-in capital 4111- far value of the destroyed shares ; Dr. 411- Paid-in capital 4112 - difference be between the bought-back price and the par value of destroyed shares Cr. 419- Treasury share bought-back price 4- When the board of management made the decision of paying dividends by treasury share already approved by the shareholders meeting : - If the issuing price of shares at the day of paying dividends by treasury share is higher than the bought-back price of those shares, the accounting entry should be recorded as follows: Dr. 421- Undistributed earnings issuing shares price or Dr. 338- Other payables 3388 Cr. 419 - Treasury share bought-back price Cr. 411 Paid-in capital 4112 difference between the bough-back price and the issuing one at the day of paying dividend by treasury shares

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC - If the issuing price of treasury shares at the day of paying dividend by treasury shares is lower than the bought-back price, the accounting entry should be recorded as follows: Dr. 421- Undistributed earnings issuing price or Dr. 338 - Other payables 3388 Dr. 411 - Paid in capital 4112 Difference between the bought-back price and the issuing one at the day of paying dividend by treasury share Cr. 419 - Treasury share bought-back price of treasury share

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 421 UNDISTRIBUTED EARNINGS This account is used to reflect the business results profit, loss after tax, income distribution and loss treatment of the enterprise. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Data to record into account 421 is the business profit after tax or business loss. 2. The distribution of the entity s results should be clear and in accordance with the current financial policy. 3. Business results should be recorded in details for each fiscal year previous year, current year . The company should also record in details for each content of profit distribution of the enterprise create funds; supplement the paid in capital, share dividend and profit to share holders and share investors . 4. When the company applies retroactively because of changes of accounting policy and because because of previous years errors found in current year so that the company has to changes the beginning balance of undistributed earnings, the accountant should increase or decrease the beginning balance of the Account 4211 Previous year undistributed earnings on the accounting book and increase or decrease the Undistributed earnings on the Balance sheet as the regulation of the Accounting Standard No. 29 Changes in Accounting policy, Accounting estimates and errors Accounting and the Accounting Standard No. 17 Enterprise Income Tax . STRUCTURE AND CONTENT OF ACCOUNT 421 - UNDISTRIBUTED EARNINGS Debit: Losses form business operations Creation of funds Distribution of dividends, profit to share holders, investors and joint venture parties Increase of paid in capital Profit given to the holding company Credit: Net income of the enterprise Income contributed by the subsidiaries or additions from the holding company due to losses Treatment of losses on business operation Debit balance Undistributed losses from business operation Credit balance Undistributed or unused earnings Account 421 – Undistributed earnings has two sub-accounts:
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Account 4211 – Previous year undistributed earnings: reflect the previous years results of business operation, distributions and losses treatment. Account 4211 is also used to reflect the increase or decrease of the beginning balance of Account 4211 when applying retroactive due to changes of accounting policy or due to material errors occurred in previous years but only found in the current year. Account 4212 – Current year undistributed earnings: is used to reflect the current year results of business operation, distributions and losses treatment. MAJOR TRANSACTIONS 1. At the end of the accounting period, transfer the business results: a. In case of profitable: Dr. 911 Income summary Cr. 421 Undistributed earnings 4212

b. In case of loss: Dr. 421 - Undistributed earnings 4212 Cr. 911 Income summary 2. In the fiscal year, the company pays the temporary dividends, sharing profit to investors, share temporary holders and contribution parties: Dr. 421 - Undistributed earnings Cr. 111, 112 actual payment amount 3. At the end of the fiscal year, determine and record the dividends of the preference shares to the th record share holders holding preference shares: Dr. 421 - Undistributed earnings Cr. 338 Other payables 3388 When make the payment: Dr. 338 Other payables 3388 Cr. 111, 112 actual payment amount

4. When the company gives out decision or report determining the rest amount of dividend and profit payable to the investors, share holders and contribution parties: Dr. 421 - Undistributed earnings Cr. 338 Other payables 3388 5. When make the payment of dividend and sharing profit to the investors, contribution parties and share holders: Dr. 338 Other payables Cr. 111, 112 actual payment amount
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6. In the year, the financial reserve fund is created from the business operation profit income retained by enterprise and should be recorded as: Dr. 421 - Undistributed earnings Cr. 415 Financial reserve fund 7. In the year, the investment and development fund is determined from the business operation profit income retained by enterprise and should be recorded as: Dr. 421 - Undistributed earnings Cr. 414 Investment and development fund are 8. In the year, determine the bonus and welfare fund and other funds based on the business operation profit income retained by enterprise : Dr. 421 - Undistributed earnings Cr. 431 Bonus and welfare fund Cr. 418 Other funds 9. At the end of the year, determine the additional amount to those funds: Dr. 421 - Undistributed earnings Cr. 414 Investment and development fund Cr. 415 Financial reserve fund Cr. 431 Bonus and welfare fund Cr. 418 Other funds 10. Increase the paid in capital from business profit income retained by enterprise : profit Dr. 421 - Undistributed earnings Cr. 411 Paid in capital 11. The profit handed to the holding company: Dr. 421 - Undistributed earnings Cr. 336 Inter-company payable 12. The profit given from subsidiaries: Dr. 136 Inter-company receivable Cr. 421 - Undistributed earnings

13. The losses from business operation supported from the holding company: Dr. 136 Inter-company receivable Cr. 421 - Undistributed earnings

14. Cover the losses from business operation of subsidiaries: Dr. 412 - Undistributed earnings Cr. 336 Inter-company payable
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 15. At the beginning of the fiscal year, transfer the current year undistributed earnings to the previous year undistributed earnings: - In case of Account 4212 has the Credit balance profitable : Dr. 4212 Current year undistributed earnings Cr. 4211 Previous year undistributed earnings - In case of Account 4212 has the Debit balance loss : Dr. 4211 Previous year undistributed earnings Cr. 4212 Current year undistributed earnings The loss amount of a year is deducted to the taxable profit of the following years as the regulations of the Enterprise Tax Law or is treated according to regulations of the current treated financial policy.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 431 BONUS AND WELFARE FUNDS This account is used to reflect the current value, the increase and decrease of the enterprise s bonus and welfare funds. The bonus and welfare funds is determined from the enterprise s business profit after tax for the purposes of staff bonuses, general benefits, public welfare to improve the material and mental lives of employees. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. The increase, decrease and usage of the bonus and welfare funds should be in accordance with the current financial policy. 2. The bonus and welfare funds should be recorded in details for each kind of funds. 3. When the fixed assets which are created from the welfare funds are put into use for cultural and welfare activities of the enterprise, increase the fixed assets and simultaneously transfer from the the welfare funds Account 4312 to the welfare funds to create fixed assets Account 4313 . These fixed assets are not allowed to record accumulated amortization monthly from expenses but record once per year to decrease the welfare funds to create fixed assets. welfare STRUCTURE AND CONTENTS OF ACCOUNT 431 – BONUS AND WELFARE FUNDS ACCOUNT Debit: Credit: Increase the bonus and welfare funds from business profit after tax Bonus and welfare funds from holding company or subsidiaries Increase of welfare funds to create fixed assets when complete the purchasing of fixed assets by welfare funds and put them into use. Usage of bonus and welfare funds Decrease the welfare funds to create fixed assets when record the amortization of fixed assets assets or sell, dispose of fixed assets, find out the fixed assets lost on physical test. Completeness of purchasing fixed assets by welfare funds for cultural and welfare purposes Bonus and welfare funds to holding company or subsidiaries

Credit balance: The current value of enterprise s bonus and welfare funds. Account 431 – Bonus and welfare funds has three sub-accounts: Account 4311 – Bonus fund: record the current value, creation and usage of the enterprise s bonus funds Account 4312 – Welfare fund: record the current value, creation and usage of the enterprise s welfare funds

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Account 4312 – Welfare fund to create fixed assets: record the current value, creation and usage of the enterprise s welfare funds to create fixed assets. MAJOR TRANSACTIONS 1. In the year, increase the bonus and welfare funds: Dr. 421 Undistributed earnings Cr. 431 - Bonus and welfare funds 4311, 4312

2. At the end of the year, determine the additional bonus and welfare funds: Dr. 421 Undistributed earnings Cr. 431 - Bonus and welfare funds 4311, 4312

3. To determine the bonus to employees and other labour in enterprise: Dr. 431 - Bonus and welfare funds 4311 Cr. 334 Payable to employees Bonus funds

4. Use welfare funds to pay to support employees in financial difficulties, for staff vacations and public campaigns: Dr. 431 - Bonus and welfare funds 4312 Cr. 111, 112 Welfare funds

5. For enterprises subject to Subtraction method VAT, when donate or grant products, goods method subject to subtraction method VAT which were purchased by the bonus and welfare funds, record purchased the value of these products, goods according to the price before VAT as follows: Dr. 431 - Bonus and welfare funds total payment value Cr. 3331 VAT payable 33311 Cr. 512 Inter-company revenue price before VAT 6. Bonus and welfare funds are handed to holding company: Dr. 431 - Bonus and welfare funds 4311, 4312 Cr. 111, 112 7. Use bonus and welfare funds to support for natural disasters, fire, etc notes: Dr. 431 - Bonus and welfare funds 4312 Cr. 111, 112 8. Bonus and welfare funds are given from holding company: Dr. 111, 112 Cr. 431 - Bonus and welfare funds 4311, 4312 9. Fixed assets purchased by welfare funds are put into use for cultural and welfare purposes: Dr. 211 Tangible fixed assets historical cost Cr. 111, 112, 241, 331
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Simultaneously record: Dr. 4312 Welfare funds Cr. 4313 Welfare funds to create fixed assets 10. At the end of the accounting period, record the amortization of fixed assets purchased by welfare funds used for cultural, welfare purposes: Dr. 4313 Welfare funds to create fixed assets Cr. 214 Fixed assets amortization 11. Sale, disposal of fixed assets purchased by welfare funds used for cultural, welfare purposes: a. Decrease the sold, disposed assets: Dr. 4313 Welfare funds to create fixed assets Dr. 214 Fixed assets amortization Cr. 211 Fixed assets historical cost b. Record the transaction of sale, disposal: Payment amounts: Dr. 431 - Bonus and welfare funds 4312 Cr. 111, 112, 334 Receipt amounts: Dr. 431 - Bonus and welfare funds 4312 Cr. 3331 Payable VAT if any

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 441 FUNDS FOR CAPITAL EXPENDITURES This account is used to reflect the current value, the increase, decrease of funds for capital expenditures of the enterprise. Funds for capital expenditures of the company is created from the company s budget or supported by the holding company. Funds for capital expenditures of enterprise is used for new construction investment, improvement, expansion of production and business construction and purchase of fixed assets to renew technology. The construction investment of enterprise must obey regulations of current investment and construction management. When the construction and purchase or fixed assets completes and the assets are put into use for production, business activities, the accountant must complete procedures to draw the capital must dr investment of each construction, construction parts. When the draw is approved, the accountant must reduce the funds for capital expenditures and increase the paid in capital. STRUCTURE AND CONTENTS OF ACCOUNT 441 - FUNDS FOR CAPITAL EXPENDITURES Debit: Decrease of funds for capital expenditures due to: - Complete construction and buying fixed assets, put into use and draw the approved capital; - Hand back the funds for capital expenditures that not been used all to the holding company, the State. Credit: Decrease of funds for capital expenditures due to: - Funds for capital expenditures from State Budget or holding company; - Funds for capital expenditures from assistance, sponsorship; - Addition from investment and development fund. Credit balance: The current funds for capital expenditures of the company not yet used or used but the construction is in progress or completed but not yet been approved. MAJOR TRANSACTIONS 1. Receive funds for capital expenditures in cash, cash in bank: Dr. 111, 112 Cr. 441 - Funds for capital expenditures. 2. Receive funds for capital expenditures from the bank according to the budgeting.
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a. Receive the budgeting for investment in construction; singly debit Account 008 "Subsidies of State Budget" off balance sheet accounts . b- Withdraw the budgeting for use, based on the usage of the budgeting for investment in construction to record into related accounts; the entry should be recorded as follows: Dr. 111 - Cash on hand Dr. 152, 153, 331 Dr. 133 - Deductible value added tax 1332 if being deducted the input VAT Dr. 241 - Construction in progress forecast withdrawal for payment Cr. 441 - Funds for capital expenditures. Simultaneously singly credit Account 008 "Subsidies of State Budget" off balance sheet accounts . 3. When an enterprise has not received the budgeting for investment in construction, the enterprise will be advanced from the Treasury. When the enterprise received capital advanced When from the Treasury, the accounting entry should be recorded as follows: Dr. 111,112 Cr. 338 - Other payables 3388 . 4. On receipt of budgeting for construction investment, the company must complete payment procedures to return the capital advanced from the treasury. When the Treasury approves the from payment documents, the accounting entry should be recorded as follows: entry Dr. 338- Other payables 3388 Cr. 441 - Funds for capital expenditures. 5. Receive funds for capital expenditures to pay for short-term borrowings, internal borrowings, other borrowings; the entry should be recorded as follows: Dr. 311, 336, 338 Cr. 441 - Funds for capital expenditures. 6. Increase funds for capital expenditures by inv investment and development fund, the entry should be recorded as follows: Dr. 414 - Investment and development fund Cr. 441 - Funds for capital expenditures. 7. When the construction and purchase of fixed assets by funds for capital expenditures complete and are put into production and trading activities: - Increase the value of fixed assets created from construction investment, completion of purchasing fixed assets, the entry should be recorded as follows: Dr. 211 - Tangible assets Dr. 213 - Intangible assets Cr. 241 Construction in progress.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC - When the draw of the completed construction is approved, reduce the funds for capital expenditures and increase the paid in capital, the entry should be recorded as follows: Dr. 441 - Funds for capital expenditures Cr. 411 - Paid in capital. 8- When return the funds for capital expenditures to the State Budget, holding company, the accounting entry should be recorded as follows: Dr. 441 - Funds for capital expenditures Cr. 111, 112

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 461 SUBSIDY FUNDS FROM STATE BUDGET This account is used to reflect the receiving, using and settling of subsidy funds from State Budget. This account is used only in entities receiving subsidies from the State or from higher level authorities. The subsidy funds from State Budget are funds received from the State Budget or higher level, from domestic and foreign entities, individuals to carry out not-for-profit programs, economic, political and social functions appointed by State or higher level authorities. The spending of subsidy funds from State Budget must be in compliance with the approved estimation and are to be settled with the issuing office. Subsidy funds may be collected from the operation revenues of aff a business, such as hospital fees collected from staff who use the services of their own branch s hospital, tuition fees, etc. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS il 1. Subsidy funds are posted in detail according to their source: issued by the State or higher level, sponsored from organization, individual, collected from the operation revenue and also according collected to the operation expenses of the previous year, or those of the current year. 2. Subsidy funds are to be used only for the purpose, content, standard and budget approved by the State, higher level and in the approved estimation. 3. Subsidy funds are recorded on the basis of issuing procedures: - If the State Budget issues funds by means of a cash transfer, when the credit advice has been received showing the proceeds credited into the bank account, the accountant records the entry the for both the cash deposit and the subsidy funds. - If the State Budget issues funds by means of an expense quota, when receive the notice of issuing, singly Debit Account 008 Subsidies of State Budget off balance sheet account . When balanc State spending funds, Credit Account 008 Subsidies of State Budget and simultaneously Credit Account 461 Subsidy funds from State Budget . 4. At the end of the fiscal year, the entity must settle the receipt and usage of subsidy funds from State Budget with the financial authorities, mana management authorities and each entity issuing funds according to the current financial policy. The unused funds are treated in accordance with the decision of the authority. Only when receive the approval of the authority, the entity can transfer the unused amount to the following year. 5. At the end of the fiscal year, if the spending by subsidy funds from State Budget has not been approved, transfer the current year subsidy funds from State Budget to the subsidy funds from State Budget of the previous year. STRUCTURE AND CONTENTS OF ACCOUNT 461 – SUBSIDY FUNDS FROM STATE BUDGET Debit: Expenses covered by the subsidy funds The remaining subsidy funds returned to the State Budget of higher level
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Credit: - Actual proceeds received from the State Budget or higher level - Operation revenues of the business supplementing the subsidy funds. Credit balance: Subsidy funds received from the State Budget or higher level having not been spent or settled. Account 461 – Subsidy funds from State Budget has two sub-accounts: Account 4611 – Subsidy funds of the previous year: this account records the funds of previous year both spent and still on hand In the case where the financial statements of the subsidy fund ents has not been approved. When the financial statements are approved, the approved amount will be deducted from Account 461 Subsidy funds from State Budget 4611 - Subsidy funds of the previous year . The amount which has not been used, according to the decisions of the financial used, office, will be returned to the State Budget or transferred to this year funds. Account 4612 – Subsidy funds of the current year: this account records the funds of the current year: year received from the State Budget or higher level including those funds transferred from the level previous year to the current year. At the end of the fiscal year, if the fund statements are not approved, the balance of Account 4612 Subsidy funds of the current year must be transferred to Account 4611 Subsidy funds of the previous year until approval is obtained. previous MAJOR TRANSACTIONS 1. Receiving subsidy funds from State Budget by mean of transfer or in cash: Dr. 111, 112 Cr. 461 - Subsidy funds from State Budget 4612 2. Receiving subsidy funds by means of and expense quota, singly Debit Account 008 Subsidies of State Budget off balance sheet account . 3. When using the expense quota: Dr. 111 Cash on hand Dr. 331 Accounts trade payables Dr. 161 Expenditures from subsidies of State Budget Dr. 152, 153 Cr. 461 - Subsidy funds from State Budget 4612

4. Subsidy funds from State Budget in business if any is recorded: Dr. 111, 112 Cr. 461 - Subsidy funds from State Budget 4612 5. Receiving subsidy funds from State Budget or higher level or non-refundable grant in fixed assets: Dr. 211 Dr. 213 Tangible fixed assets Intangible fixed assets Cr. 461 - Subsidy funds from State Budget
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Simultaneously, record: Dr. 161 - Expenditures from subsidies of State Budget Cr. 466 Sources of acquisition of fixed assets 6. At the end of the year, when the entity pay back the amount of cash retained to the State Budget or higher level, record: Dr. 461 - Subsidy funds from State Budget Cr. 111, 112 If the unused amount is kept to the next year funds, do not use the above record. 7. When the financial statements of subsidy funds from State Budget are approved within the year: Dr. 461 - Subsidy funds from State Budget 4612 Cr. 161 - Expenditures from subsidies of State Budget 1612 approved expense 8. At the end of the year, if the financial statements of the subsidy funds have not been approved: statements - Transfer the functional operation expenses of this year to previous year Dr. 161 - Expenditures from subsidies of State Budget 1611 - Expenditures from subsidies of State Budget of the current year Cr. 161 - Expenditures from subsidies of State Budget 1612 - Expenditures from subsidies of State Budget of the previous year - Simultaneously transfer the functional operation expenses of this year to previous year: Dr. 461 - Subsidy funds from State Budget 4612 - Subsidy funds from State Budget of the current year Cr. 461 - Subsidy funds from State Budget 4611 - Subsidy funds from State Budget of the previous year 9. In the following year, when the financial statem statements of the subsidy funds of the previous year are approved, record: Dr. 461 - Subsidy funds from State Budget 4611 Cr. 161 - Expenditures from subsidies of State Budget 1611 10. The unused subsidy funds of the previous year is transfer to the current year: Dr. 461 - Subsidy funds from State Budget 4611 - Subsidy funds from State Budget of the previous year Cr. 461 - Subsidy funds from State Budget 4612 - Subsidy funds from State Budget of the current year .

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 466 SOURCES FOR ACQUISITION OF FIXED ASSETS This account is used to record the current value, increase and decrease of the sources for acquisition of fixed assets. Only increase this account when purchase, construct or improve fixed assets by sources for acquisition of fixed assets supported from the State Budget or grant, donor allowed to increase the historical cost of fixed assets . Decrease the sources for acquisition of fixed assets for amortization calculation, sale, disposal of fixed assets, fixed assets lack on physical count, fixed assets turned back to the State or transferred to another entity according to decision of State, higher level. STRUCTURE AND CONTENTS OF ACCOUNT 466 – SOURCES FOR ACQUISITION T OF FIXED ASSETS Debit: Decrease the sources for acquisition of fixed assets: Fixed assets returned to the State or transferred to another entity according to transferred decision of State or authorities; Amortization calculated of fixed assets used for the project s activities; Sale, disposal of fixed assets, fixed assets lack on physical count; Rest value of fixed assets increases due to revaluation.

Credit:

Increase the sources for acquisition of fixed assets: Fixed assets purchased, constructed are put into use; Subsidy funds are provided in fixed assets; Rest value of fixed assets increases due to revaluation.

Credit balance: Current sources for acquisition of fixed assets of the entity. MAJOR TRANSACTIONS 1. In case of the State Budget or higher level authority give the funds by fixed assets or the entity uses subsidy funds to purchase, construct fixed assets; when those activities complete and the assets are put into use, record as follows:

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 211 Dr. 213 Tangible assets Intangible assets Cr. 111, 112, 241, 331, 461

Simultaneously record: Dr. 161 - Expenditures from subsidies of State Budget Cr. 466 - Sources for acquisition of fixed assets When use the subsidies of State Budget to purchase, construct fixed assets, simultaneously singly credit account 008 Subsidies of State Budget off balance sheet account 2. At the end of the accounting period, calculate the amortization of fixed assets purchased by sources for purchase of fixed assets: Dr. 466 - Sources for acquisition of fixed assets amortization Cr. 214 Accumulated amortization and depreciation 3. When sell, dispose fixed assets; Decrease fixed assets: Dr. 466 - Sources for acquisition of fixed assets the rest value Dr. 214 - Accumulated amortization and depreciation Cr. 211 Tangible assets historical cost Cr. 213 Intangible assets historical cost Receipt, payment amounts; differences of payment, receipt on sale, disposal of fixed assets by sources for purchasing of fixed assets are treated and recorded in accordance with decision treated of the authorities.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC CATEGORY 5 REVENUE This category is used to record the revenue of goods sold, property investment, services provided, interest earned, royalties, distributed dividends and profits, sales discounts, sales allowances and sales return. Turnover is the total value of economic benefits the enterprise has gained or will gain in an accounting period, arising from the enterprise s normal production and business operations, contributing to increase the owner s equity. Collections on behalf of a third party that do not constitute a source of economic benefits and don t increase the owner s equity of the enterprise would not be considered as turnover.

1. The determination and recording of revenue must comply with the regulations of VAS 14 must related Revenue and other income and other related Vietnamese Accounting Standards. 2. Recognition of revenue and expenses must be complied with matching concept. When revenue is recognized, relating expenses attributable to that revenue must be recorded. 3. Turnover of goods sold shall only be recognized if they simultaneously meet the following five 5 conditions: risks The enterprise has transferred the majority of risks and benefits associated with the right to own the products or goods to the buyer; The enterprise no longer holds the right to manage the goods as the goods owner, or the right to control the goods; Revenue has been determined with relative certainty; The enterprise has gained or will gain economic benefits from the goods sale transaction; economic It is possible to determine the costs related to the goods sale transaction.

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4. Turnover from service provision transaction shall be recognized when the results of these transactions are determined reliably. Where a service provision transaction relates to many periods, turnover shall be recognized in each period according to the results of the work volume finished on the date of making of such period s accounting balance sheet. The result of a service provision transaction shall be determined only when it satisfies all the four 4 conditions below: Turnover is determined with relative certainty; It is possible to obtain economic benefits from the service provision transaction; The work volume finished on the date of preparing the balance sheet can be determined; The costs incurred from the service provision transaction and the costs of its completion can be determined.
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 5. When goods or services are exchanged for goods or services of similar nature and value, such exchange shall not be regarded as a turnover-generating transaction. 6. Sales revenue must be classified according to each type of activity such as: sales of goods and services, interests, royalties, distributed dividends and profits. For each activity, it must further be classified according to the type of products or services sold. This requirement enables the company to maintain accurate and adequate results of the business operations for both management purposes and for the preparation of the income statement. 7. Sales discounts, sales returns and sale allowances incurred during the period must be recorded in their individual accounts. The deduction sales is minus the initial recorded sales to the determination of net sales, is used as the basic for the determination business results of the accounting period. period, 8. In principle, at the end of the accounting period, the enterprise must determine operation and business results. Net sales earned during the period will be transferred to the income period summary - account 911. Once closed, these accounts will have no carry forward balance. Revenue is comprised of five accounts, which are classified into three groups: Group Sales – includes three accounts: Sales; Inter-company sales; Financial income

Account 511 Account 512 Account 515

Group

Sales Discounts – includes one account

Account 521 - Sales discounts Group 53 - Sale returns and sales allowances - includes two accounts Account 531 - Sales returns; Account 532 - Sales allowances

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 511 SALES This account records sales of goods and services of the enterprise in the accounting period from following transactions: Goods sales: selling products manufactured by the enterprise, merchandise goods and property investment. Provision of services: performing the work agreed upon the contracts in one or many accounting periods; such as provision of transportation services, tourism, lease fixed assets under the operating lease etc.

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THIS ACCOUNT MUST COMPLY WITH FOLLOWING REGULATIONS 1. value of receivables which already are collected or shall receive from such sales transactions as selling goods, services, property investment, provision of services including surcharges and costs added to price if any .

2. For the sales of goods and services in a foreign currency, the enterprise must convert to VND or a functional currency using the actual exchange rate or the average inter-bank exchange rate announced by the SBV at the date of the transaction. 3. Net sales may be less than gross sales which initially recorded because of the following reasons: the enterprise offers discount or allowances for goods sold or returned as goods sold allowances do not meet the quality or specification stated in the contract , and the enterprise must pay special consumption tax or export duty or VAT in direct method based on the actual revenue of goods sold in the period. 4. Account 511 Sales of goods and services only reflects sales from goods, property investment, services which have been determined as earned in the period regardless the determined money has received or will receive. 5. For goods and services subject to subtraction method VAT, sales of goods and services is subtraction determined at selling price not including VAT. 6. For goods and services not subject to VAT or subject VAT in direct method, sales of goods and services is determined at the total amount. 7. For goods and services subject to special consumption tax or export duty, sales of goods and services is determined at the total amount includes special consumption tax and export duty . 8. For enterprise processing materials and goods for other entities, the enterprise should only reflect the actual fees received as it revenue, not including the value of materials and goods processed. 9. For enterprise selling goods on consignment at price recommended by and received commission from the consigner, the enterprise shall only record the commission as its revenue.

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12.

contract include:

a. Initial revenue inscribed in the contract; b. Increase and decrease amounts in the contract performance, bonuses and other payments, provided that these amounts are capable of changing the revenue and can be reliably determined. The contractual revenue may be increased or decreased in each specific period. For example: Contractors and customers may agree upon changes and requirements resulting in the increase or decrease of contractual revenue in the next period as compared with the initially agreed contract; Revenue already agreed upon in the fixed price contract may increase for the reason that price prices rise high; Contractual revenue may decrease due to the contractors failure to keep up with the set contractors schedule or to ensure construction quality as agreed upon in the contract; When the fixed price contract sets a fixed price for a finished product unit, the contractual revenue shall increase or decrease when the product volume increases or decreases. the Bonuses are supplementary amounts to be paid to contractors if they perform the contracts according to or beyond the requirements. Bonus shall be accounted into the contract revenue when it satisfies all the two 2 conditions below: A number of specific standards inscribed in the contract are surely attained or surpassed; and The bonus can be reliably determined. Another payment received by the contractor from the customer or another party to offset costs is not included in the contractual price. For example: delay caused by the customer; errors in technical or designing specifications, and disputes over changes in the contract performance. The determination of increased revenue from the above-said payments depends on numerous uncertain factors and usually depends on the results of many negotiations. Therefore, other payments shall only be accounted into the contractual revenue when: It is agreed that the customer will accept to make compensation; Other payments are accepted by the customer and reliably determined.

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Where a construction contract stipulates that the contractor is allowed to make payments according to the set schedule, and when the construction contract performance result is reliably estimated, the revenues and costs related to the contract shall be recognized by reference to the completed volume determined by the contractor on the date of compiling financial statement, regardless of whether invoices for payments according to the set schedule have been billed or not and how much money is inscribed on invoices. Where a construction contract stipulates that the contractor is allowed to make payments according to the value of performed work volume, and when the contract performance result is reliably determined and certified by customers, the revenues and costs related to such contract shall be recognized by reference to the completed work volume certified by the customers in the period and reflected in the billed invoices.

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Revenue shall only be recognized to match the already arising contract costs, the reimbursement thereof is relatively sure; in-period Contract costs shall only be recognized as in-period costs when they have already arisen.

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The value of goods, materials, goods in process deliver to another entity for processing; The value of products, goods, services provides between companies, the corporation and subsidiaries;
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC The value of products, goods and services provides between the corporation and member firms; The goods, products are sending, the completed services has provided to customer but have been yet sold; The value of consignment goods under sales agent have been yet determined selling ; Financial income and other income are not record as sales of goods and services.

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STRUCTURE AND CONTENTS OF ACCOUNT 511 – SALES Debit: The amount of special consumption tax or expor duty on the actual sales of goods, products export and services provision to customer and determined as goods sold during the accounting determined period; The amount of VAT payable for the enterprise paying subtraction method VAT; Amount of sales return transferred at the end period; Sale discounts transferred at the end period; Sales allowances transferred at the end period; Transfer of net sales to account 911 Income summary .

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Credit: Revenue of selling goods, products, property investment and the services provision has performed products, od during the accounting period by the enterprise. Account 511 has no ending balance. Account No Sales of good and services has five sub-accounts

Account 5111 - Sales of merchandise: to record sales and net revenue of products which have been sold during the period. This account is specifically used for entity trading goods and merchandise. Account 5112 - Sales products: to record sales and net sales revenue of products finished goods, unfinished goods which have been sold during the period. This account is specifically used for manufacturing companies such as: industrial, agricultural, construction, fishery, forestry, etc. Account 5113 - Service revenues: to record revenue and net revenue from service provided to customers that have been sold during the period. This account is specifically used for service companies such as: transportation, post and
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC telegraphy, tourism, public services, technical and scientific assistant service companies, etc. Account 5114 – Revenue from subsidies: to record subsidies when the entity provided goods and services according to the requirement of the State. Account 5117 – Sales from property investment: to record sales from lease property investment and sales of selling, liquidation from property investment. MAJOR TRANSACTIONS

a. For goods, property investment, services subject to subtraction method VAT and the enterprise paying subtraction method VAT, sales of goods and services is recorded at selling price not and including VAT: Dr. 111, 112, 131 Total amount Cr. 511 Sales of goods and services selling price not including VAT 5112, 5113, 5117 Cr. 3331 VAT payable 33311

5111,

b. For goods, property investment, services not subject to VAT or subject to VAT in direct subject method, sales of goods and services is recorded at total amount: Dr. 111, 112, 131 Total amount Cr. 511 Sales of goods and services Total amount 2. If sales of goods and services in a foreign currency, the accountant must record in details amount in foreign currency received or being received. In addition, the accountant must convert received. the amount into VND or the other functional currency using the actual exchange rate or the currency average inter-bank exchange rate announced by the SBV at the date of transaction to record into SBV the account 511 Sales of goods and services. 3. For enterprise paying subtraction method VAT, when the enterprise exchanged goods and services for goods and services of dissimilar nature and value that are subject to subtraction method VAT, the accountant records sales of goods exchanged for other materials, goods and fixed assets at the selling price not including VAT: Dr. 131 Accounts receivable Total amount Cr. 511 Sales of goods and services selling price not including VAT 5112 Cr. 3331 VAT payable 33311

5111,

- When receipt of exchanged materials, goods, fixed asset: Dr. 152, 153, 156, 211,... the buying price not including VAT Dr. 133 VAT deductible if any Cr. 131 Accounts receivable Total amount - In the case, the reasonable value of the goods and services exchanged exceeds the reasonable value of goods and services received, when receipts of money, the accountant records:
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Dr. 111, 112 total receipt Cr. 131 Accounts receivable - In the case, the reasonable value of the goods and services exchanged is less than the reasonable value of the goods and services received, when payment made, the accountant records: Dr. 131 Accounts receivable Cr. 111, 112

4. When the goods and service subject to VAT or subject to VAT in direct method, hen the enterprise exchanged goods and services for goods and services of dissimilar nature and value that are subject to subtraction method VAT, the accountant records sales of goods exchanged for other materials, goods and fixed assets at total amount: Dr. 131 Accounts receivable. Cr. 511 Sales of goods and services total amount 5111, 5112

- When receipts of exchanged materials, goods, fixed assets: Dr. 152, 153, 156, 211 Total amount Cr. 131 Accounts receivable - In the case, the entity received or paid supplement, accounting treatment is recorded as guidance supplement, in point 3. 5. When the enterprise sells goods and property investments on instalment plan that are subject to investments Subtraction method VAT, revenue is recorded at price of payment at sight not including VAT: Dr. 131 Accounts receivable Cr. 511 Sales of goods and services 5111, 5112, 5117 price of payment at sight not including VAT Cr. 333 Tax and statutory obligations 3331 VAT Cr. 3387 Deferred income difference of instalment price and price of payment at sight not including VAT

- Receipts from the sales: Dr. 111, 112 Cr. 131

Accounts receivable

- Periodically, recognize interest income generated from instalment receivable: Dr. 3387 Deferred income Cr. 515 Financial income receivable

interest income generated from instalment

6. When the entity sells goods on instalment plan that are not subject to VAT or subject to VAT in direct method, sales is recorded at price of payment at sight included VAT: Dr. 131 Accounts receivable Cr. 511 Sales of goods and services price of payment at sight included VAT 5111, 5112
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 3387 at sight - Receipts from the sales: Dr. 111, 112 Cr. 131 Deferred income difference of instalment price and price of payment

Accounts receivable

- Periodically, recognise interest income on instalment receivable: Dr. 3387 Deferred income Cr. 515 Financial income the interest income generated from instalment receivable 7. For lessor paying subtraction method VAT, revenue from lease of fixed assets and property revenue investment under operating lease must be recognized in line with the lease periods. When issued invoice for operating lease of fixed assets and property investment: Dr. 131- Accounts receivable money not received yet Dr. 111, 112 money received already Cr. 511 Sales of goods and services lease fee not including VAT 5113, 5117 Cr. 3331 VAT payable 8. To record for receipts of lease fee of fixed assets and property investment for several periods in advance. - When receipts of lease fee for several periods in advance: Dr. 111, 112... Total receipt Cr. 3387 Deferred income price not including VAT Cr. 3331 VAT - Periodically, calculating and recognising sales for the period: Dr. 3387 Deferred income Cr. 511 Sales of goods and services 5113, 5117 - Since the operating lease contract of fixed assets and property investments can t be continuously carried out or the performance period is less than the one lease fee already pre-paied if any : Dr. 3387 Deferred income Dr. 3331 VAT payable VAT amount for performing the lease contract of which has not carried out, must return to lessee Cr. 111, 112... total payment 9. Accounting for revenue from operating lease of fixed assets and property investment at the lessor paying VAT in direct method: - When the invoice is issued for operating lease of fixed assets and property investments: Dr. 131 Accounts receivable money not received yet Dr. 111, 112 money received already Cr. 511 Sales of goods and services total amount 5113, 5117
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- In the case, the enterprises receive pre-payment from the customer for several periods for operating lease of fixed assets and property investments: + When received pre-payment from the customer for several periods for operating lease of fixed assets and property investments: Dr. 111, 112... total prepayment amount Cr. 3387 Deferred income total prepayment amount + Periodically, calculating and transferring sales of the period: Dr. 3387 Deferred income Cr. 511 Sales of goods and services 5113, 5117 + At the end of the period, calculating and reflecting the amount of VAT payable in direct method: Dr. 511 Sales of goods and services 5113, 5117 Cr. 3331 VAT payable

+ Money returned to the customer due to interruption of the fixed assets lease contract: interruption Dr. 3387 Deferred income Cr. 111, 112... the returned amount 10. Accounting for sales of goods at the sales agents at price recommended by and received commission from the consigner 10.1 Accounting by the consigners who have goods on consignment at their sales agents a. When the enterprise distributes products to the sales agent, the enterprise issued goods dispatch sales notes. Based on goods dispatch notes to record: Dr. 157 Goods on consignment Cr. 155, 156

b. When goods on consignment are sold, based on the list of issued invoices from the sales agent sent: - For goods and services subject to subtraction method VAT, sales are recorded at selling price not including VAT: Dr. 111, 112, 131 Total amount Cr. 511 Sales of goods and services selling price not including VAT 5112 Cr. 3331 VAT payable 33311 + At the same time, cost of goods sold is recognized as follows: Dr. 632 Cost of goods sold Cr. 157 Goods on consignment
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC - For goods and services not subject to VAT or subject to VAT in direct method, sales are recorded at total amount: Dr. 111, 112, 131 Cr. 511 Sales of goods and services total amount + At the same time, cost of goods sold is recognized as follows: Dr. 632 Cost of goods sold Cr. 157 Goods on consignment

c. The commission payable to the sales agents is recorded as follows: Dr. 641 Dr. 133 Selling expenses the commission not including VAT VAT deductible 1331 Cr. 111, 112, 131

10.2 Accounting at the entity acting as the sales agent a. When the sales agent received goods on consignment at price recommended by and received consignment commission from the consigner, the value of goods on consignment are recorded in off balance sheet accounts account 003 Goods received on consignment for sale . Goods received are debited to account 003 while goods sold or returned to consigner are credited to account 003. returned b. When goods on consignment are sold by the sales agent: - When goods on consignment are sold, the sales agent must issue VAT invoices or the selling invoices according to the current regulations. Based on the VAT invoices or the selling invoices and relating documents, the accountant records payables to the consigners for goods on consignment sold: Dr. 111, 1112, 131 Cr. 331 Trade payable total amount - Periodically, the sales agents determine the amount of commission as follows: Dr. 331 Trade payable Cr. 511 Sales of goods and services the amount of commissions not including VAT Cr. 3331 VAT payable if any

- When the sales agents made payment to the consignors: Dr. 331 Trade payable Cr. 111, 112

11. Accounting for the sales of goods by divisions 11.1 For goods subject to subtraction method VAT and the entity paying subtraction method VAT: a. When the entity parent or higher authority delivers goods to its divisions branches, showrooms , the entity must issue goods dispatch notes cum internal transport notes.
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- The parent or higher authority determines cost of goods sold based on goods dispatch notes cum internal transport to record: Dr. 157 Goods on consignment Cr. 155, 156

- When the divisions received goods from its company or higher authority, the accountant records based on goods dispatch notes cum internal transport to record: Dr. 155, 156 internal selling price Cr. 336 Inter-company payable b. When the divisions sell goods which are subject to subtraction method VAT and sent by its company or its higher authority, the divisions must issue VAT invoice according to regulations - Based on VAT invoice to record sales of goods sold: Dr. 111, 112, 131... Cr. 511 Sales of goods and services selling price not including VAT 5112 Cr. 3331 VAT payable 33311

5111,

- When the divisions received VAT invoice of goods sold internally from its company or its higher authority, the divisions record deductible VAT based on VAT invoice: Dr. 133 VAT deductible Cr. 156 Merchandise goods if cost of goods sold has not been transferred yet Cr. 632 Cost of goods sold if cost of goods sold has been transferred

11.2. For goods subject to VAT in direct method: a. When the entity company or higher authority delivers goods to its divisions not subject to VAT or subject to VAT in direct method, the entity should issue goods dispatch notes cum internal transport notes according to regulations. - Based on goods dispatch notes cum internal transport notes, to detemine cost of goods delivered to its divisions: Dr. 157 Goods on consignment historical cost Cr. 155 Finished goods Cr. 156 Merchandise goods

When the divisions received goods from its company or its higher authority, based on goods dispatch notes cum internal transport notes and relating documents to record: Dr. 156 Merchandise goods internal selling price Cr. 111, 112, 336...

b. When the divisions sell goods delivered by its company or higher authority that are subject to VAT in direct method, they should issue selling invoices. - Based on invoices to record sales:
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Dr. 111, 112, 131... Cr. 511 Sales of goods and services total amount 5111, 5112 c. If the company or higher authority uses selling invoices when delivered goods to its divisions. - The company or higher authority based on selling invoice to record sales: Dr. 111, 112, 136... Cr. 512 Inter-company sales internal selling price 5121, 5122 - When the divisions received goods from its company or its higher authority, based on selling invoices and relating documents, they shall record value of goods received: Dr. 155, 156 Cr. 111, 112, 336... - When the divisions sell goods, they should issue selling invoices and record sales as follows: Dr. 111, 112, 131... Cr. 511 Sales of goods and services total payment 5111, 5112 12. Accounting for goods processing activity: a. Accounting by enterprise delivered goods for processing - When delivered goods for processing: Dr. 154 Work in progress Cr. 152, 156

- If processing cost for goods subject to subtraction method VAT and the entity paying subtraction subtraction method VAT: Dr. 154 Dr. 133 Work in progress VAT deductible if any Cr. 111, 112, 331...

- When received completed processed goods: Dr. 152, 156 Cr. 154

Work in progress

b. Accounting by the processor: - When received goods for processing, the entity should record value of goods processing to off balance sheet accounts account 002 Goods held under trust or for processing . When receiving goods for processing, the accountant debits account 002. When goods are put in processing, or returned to the partner, the accountant credits account 002. - When the entity determines actual income from processing:

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC + Processing goods subject to subtraction method VAT and the entity paying subtraction method VAT: Dr. 111, 112, 131... Cr. 511 Sales of goods and services processing fee not including VAT Cr. 3331 VAT payable 33311 + Processing goods not subject to VAT or subject to VAT and the entity paying VAT in direct method: Dr. 111, 112, 131... Cr. 511 Sales of goods and services total processing fee 13. Accounting for sales from construction contract. 13.1 Where a construction contract stipulates that the contractor is allowed to make payments according to the set schedule, and when the construction contract performance result is reliably construction estimated, based on the supporting documents showing that revenues are referenced to the completed volume not invoice determined by the contractor on the date of preparing financial the statements: Dr. 337 Construction contractor payables based on agreed progress billing Cr. 511 Sales of goods and services 5111

- Based on VAT invoice issued according to the set schedule to record amount receivable as agreed in the contract: Dr. 131 Accounts receivable Cr. 337 Construction contractor payables based on agreed progress billing Cr. 3331 VAT payable

- When received money or payments in advance from customer: Dr. 111, 112 Cr. 131

Accounts receivable

13.2 Where a construction contract stipulates that the contractor is allowed to make payments according to the value of performed work volume and when the contract performance result is volume, reliably determined and certified by customers, the accountant issues VAT invoice based on the completed work volume certified by the customers: Dr. 111, 112, 131 Cr. 3331 VAT payable Cr. 511 Sales of goods and services 5111 13.3 Bonuses given by the customers once the contractor performs the contracts according to or beyond a number of specific standards inscribed in the contract: Dr. 111, 112, 131 Cr. 3331 VAT payable Cr. 511 Sales of goods and services 5111

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 13.4 Another payment received from the customer or another party to offset costs is not included in the contractual price For example: delay caused by the customer, errors in technical or designing specifications, and disputes over changes in the contract performance : Dr. 111, 112, 131 Cr. 3331 VAT payable if any Cr. 511 Sales of goods and services 5111 13.5 When the contractor received payments for the completed work volume or pre-payments from customer: Dr. 111, 112 Cr. 131 - Accounts receivable onsumption 14. Determining the amount of special consumption tax and export duty payable: Dr. 511 Sales of goods and services 5111, 5112, 5113 Cr. 3332 Special consumption tax Cr. 3333 Import and export duties export duty by details

15. At the end of the period, the accounting determines VAT payable in direct method: Dr. 511 Sales of goods and services Cr. 3331 VAT payable

16. Accounting for sales generated from subsidies and allowances given by the State: subsidies - When received the acknowledgement of the State on the subsidies and allowances: the Dr. 333 Tax and statutory obligations 3339 Cr. 511 Sales of goods and services 5114

- When received subsidies from the State: Dr. 111, 112 Cr. 333 Tax and statutory obligations 3339 17. Accounting for the sales and liquidation of property investment - For enterprise paying subtraction method VAT: Dr. 111, 112, 131 Total amount Cr. 5117 Sales from property investment selling price not including VAT Cr. 3331 VAT payable 33311 Output VAT - For enterprise paying VAT in direct method: Dr. 111, 112, 131 Total amount Cr. 5117 Sales from property investment 18. When the enterprise sells goods and services subject to subtraction method VAT to its parent company or subsidiaries and paying subtraction method VAT, the sales of goods and services is
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC recorded to account 511 at selling price not including VAT by details of the parent or subsidiaries: Dr. 111, 112 Cr. 511 Sales of goods and services Cr. 3331 VAT payable 19. At the end of the period, the enterprise will transfer sales return, sales allowance and sales discount arising during the period to sales account in order to determine net sales: Dr. 511 Sales of goods and services Cr. 531 Sales return Cr. 532 Sales allowance Cr. 521 Sales discount 20. At the end of the period, the enterprise will transfer net sales to account 911 Income summary : Dr. 511 Sales of goods and services Cr. 911 Income summary

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 512 INTER-COMPANY SALES This account records revenue of goods sold and services provided within an enterprise. Intercompany sales is an economic benefit receiving from goods, products sold and services provided within a group composing subsidiaries controlled by a parent company or a General Corporation according to internal sales price. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Accounting inter-company sales complies with regulations the same recording sales of goods and services account 511 . enterprises 2. This account is only used by a group of enterprises under the control of a parent or a General Corporation to recognize the inter-company sales from the volume of products, goods, services which sold or provided within a group composing subsidiaries controlled by a parent or a General Corporation during the accounting period. 3. Revenue from products, goods sold and services provided to parties other than those within provided the same group, subsidiaries, parents or General Corporations within the corporation are not General permitted to be recorded in this account. 4. Inter-company sales are the basis for determining inter-company summary of the company, the corporation and a group composing subsidiaries. Result of business operates of the corporation includes the part of inter-company as well as revenue generated from external parties. General Corporation, parent company, subsidiaries and divisions must fully perform their obligations to the Government in accordance with the tax laws imposed on, products, accordance goods and services sold inter-company and out side. the 5. The account 512 must record in a detail the inter-company sales from selling goods and provision of services for each subsidiary within the corporation for preparing the consolidated financial statements. STRUCTURE AND CONTENTS OF ACCOUNT 512 – INTER-COMPANY SALES ACCOUNT Debit: - The value of sales returns, sales discounts, and sales allowances are based on the volume of inter-company goods and services sold that transfer at the end of the period; - The amount payables of special consumption tax of goods, products and services sold intercompany; - VAT payable of goods, products and services sold inter-company applying direct method; - Transfer net inter-company sales to account 911 Income summary . Credit: Total amount of inter-company sales performed during the period.

Account 512 has no ending balance.
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Account 512 – Inter-company sales revenue includes three sub-accounts: Account 5121 Sales of merchandise: to record sales of goods sold within subsidiaries or member companies during the period This account is specially used for commercial enterprises that trade items such as: materials, food stuff, etc. Account 5122 - Sales of products: to record sales of goods sold and services provided within a group of enterprises in the corporation or in the General Corporation. This type of account is specially used for manufacturing enterprises such as industrial, agricultural, forestry, etc. Account 5123 Services revenue: To record revenue from services rendered to member within a group of enterprise in the corporation or in the General Corporation. This account is specially used for business service enterprise such as: post transportation, tourism, post office, etc. MAJOR TRANSACTIONS 1. For goods sold within subsidiaries. 1.1 Goods subject to subtraction method VAT and enterprises paying subtraction method VAT. a. When company parent, higher authority delivered goods to its divisions such as branches, delivered showrooms , the company must issue goods dispatch notes cum internal transport notes. Based on the goods dispatch notes cum internal transport notes, the company must determine cost transport of goods sold for its divisions: Dr. 157 Goods on consignment cost of goods sold Cr. 155, 156

- When the divisions received goods from its company, based on goods dispatch notes cum internal transport notes the accountant records the following: Dr. 156 Merchandise goods Cr. 336 Inter-company payable

b. When divisions paying Subtraction method VAT sold merchandises and goods subject to VAT delivered on consignment by its company or higher authority , the divisions must issue VAT invoice according to regulations. - Based on the VAT invoice issued, the divisions recognise of revenue: Dr. 111, 112, 131... Cr. 511 Sales of goods and services selling price not including VAT Cr. 3331 VAT payable 33311 - Based on the list of invoices received from its divisions, the company or the higher authority
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC must issue VAT invoice reflecting the amount of goods sold internally. Based on VAT invoice, the accountant records inter-company sales at internal selling price not including VAT: Dr. 111, 112, 136 internal selling price including VAT Cr. 512 Inter-company sales internal selling price not including VAT Cr. 3331 VAT payable 33311 + At the same time, recording cost of goods internally sold: Dr. 632 Cost of goods sold Cr. 157 Goods on consignment

- When the divisions received VAT invoice for goods sold internally from its company or the higher authority, the divisions record the VAT deductible: Dr. 133 VAT deductible Cr. 156 Merchandise goods if cost of goods sold has not been transferred yet Cr. 632 Cost of goods sold if cost of goods sold has been transferred

c. If the company or the higher authority delivered goods to its divisions and doesn t use goods dispatch notes cum internal transport notes but the VAT invoice, the company or the higher authority must issue VAT invoice when delivering goods to its divisions. - Based on VAT invoice issued, the company or the higher authority records sales of goods sold: Dr. 111, 112, 136 internal selling price including VAT Cr. 512 Inter-company sales internal selling price not including VAT Cr. 3331 VAT payable 33311 goods - When the divisions received VAT invoice and goods from its company or the higher authority, the based on VAT invoice and relating documents, the accountant records value of good received at the internal selling price not including VAT: Dr. 155, 156 internal selling price not including VAT Dr. 133 VAT deductible Cr. 111, 112, 336 total internal payment rece - When the divisions sold goods which were received from its company or the higher authority subject to subtraction method VAT, the divisions must issue VAT invoice according to regulations and record sales as follows: Dr. 111, 112, 131 total amount Cr. 511 Sales of goods and services selling price not including VAT Cr. 3331 VAT payable 33311 1.2 For merchandise, goods not subject to VAT or subject to VAT in direct method: a. When the company parent or higher authority pays VAT in direct method and delivers products not subject to VAT or subject to VAT in direct method to its divisions, the company must issue goods dispatch notes cum internal transport notes according to regulations. - Based on goods dispatch notes cum internal transport notes, the company determines value of goods delivered to its divisions.
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Dr. 157

Goods on consignment cost of goods delivered Cr. 155 Finished goods Cr. 156 Merchandise goods

- The divisions received goods from its company. Based on goods dispatch notes cum internal transport notes and relating documents, the divisions record: Dr. 155 Dr. 156 Finished goods internal selling price Merchandise goods Cr. 111, 112, 336

b. When divisions paying VAT in direct method sold consigned goods not subject to VAT or subject to VAT in direct method, the divisions must issue VAT invoice. - Based on VAT invoice, the divisions record revenue: Dr. 111, 112, 131 Cr. 511 Sales of goods and services total amount - Based on the list of invoices received from its divisions, the company or the higher authority must issue VAT invoice reflecting the amount of goods sold internally. Based on VAT invoice, the accountant records sales:

Cr. 512 Inter-company sales total internal amount + At the same time, recording cost of goods sold internally: Dr. 632 Cost of goods sold Cr. 157 Goods on consignment

c. The company or the higher authority used invoices when delivered goods to its divisions. - Based on selling invoices, the company or the higher authority records revenue: Dr. 111, 112, 136 Cr. 512 Inter-company sales total internal amount - When the divisions received goods from its company higher authority for trading, based on selling invoice and relating documents, the divisions record value of goods received: Dr. 155 Finished goods the internal selling goods Cr. 111, 112, 336

- When these merchandise goods are sold, the divisions must issue invoices. Based on the invoice, the divisions record revenue: Dr. 111, 112, 131 Cr. 511 Sales of goods and services total amount 2. At the end of the period, sales return, sales discounts and sales allowances if any of goods sold internally are transferred to account Inter-company sales :
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Dr. 512

Inter-company sales Cr. 531 Sales returns Cr. 532 Sales allowances

3. At the end of the period, enterprises determine the amount of special consumption tax payable that composed on inter-company sales during the period if any : Dr. 512 Inter-company sales Cr. 3332 Special consumption tax

4. At the end of the period, enterprises determine the amount of VAT payable for goods and services subject to VAT in direct method that are sold internally during the period. Dr. 512 Inter-company sales Cr. 3331 VAT payable Income

5. At the end of the period, inter-company sales are transferred to account 911 summary . Dr. 512 Inter-company sales Cr. 911 Income summary

6. If enterprises paid salary to staffs and employees by goods a. When enterprises reward or pay salary to staffs and employees by products, goods subject to subtraction method VAT. Dr. 334 Payable to employees Cr. 512 Inter-company selling price not including VAT 5121, 5122 Cr. 3331 VAT payable 33311

b. When enterprises reward or pay salary to staffs, officer and other employees by products, staffs, goods not subject to VAT or subject to VAT in direct method: Dr. 334 Payable to employees Cr. 512 Inter-company sales total amount 5121, 5122

7. Goods and services are internally used: a. The products and goods subject to subtraction method VAT are internally used to production of goods and services subject to subtraction method VAT. When internally using, the accountant must record inter-company sales as follows: Dr. 623, 627, 641, 642 Cr. 512 Inter-company sales manufacturing expenses or cost of goods sold b. The products and goods subject to subtraction method VAT are internally used to production of goods and services not subject to VAT. The VAT payable of goods and services internally used is recorded in manufacturing and business expenses. The accountant records inter-company sales as manufacturing expenses or cost of goods sold: Dr. 623, 627, 641, 642
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 512 Inter-company sales manufacturing expenses or cost of goods sold Cr. 3331 VAT payable 33311 8. Usage of goods and services for promotion and advertising: For goods and services subject to subtraction method VAT and enterprises paying subtraction method VAT: - If advertising, promotion is used for production of goods and services subject to subtraction method VAT, the revenue generated from advertised and promoted goods and services is recorded as manufacturing expenses or cost of goods sold: Dr. 641 Selling expenses Cr. 512 Inter-company sales manufacturing expenses or cost of goods sold ng

- If advertising and promotion is used for production of goods, services subject to VAT in direct production method or not subject to VAT, the accountant must record inter-company sales and VAT payable not deductible : Dr. 641 Selling expenses manufacturing expenses or cost of goods sold including output VAT Cr. 512 - Inter-company sales manufacturing or cost of goods sold manufacturing Cr. 3331 VAT payable 33311

9. Goods and services for donation: If the enterprises donate goods and services subject to subtraction method VAT that are covered by bonus & welfare fund, the accountant records sales at selling price not including VAT and VAT payable not deductible : Dr. 431 Bonus & welfare fund Cr. 512 Inter-company sales Cr. 3331 VAT payable 33311

10. For goods and services not subject to VAT or subject to VAT in direct method, when donating to individuals, organizations that are covered by bonus and welfare fund: Dr. 431 Bonus & welfare fund total amount Cr. 512 Inter-company sales total amount

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 515 FINANCIAL INCOME This account records interests, royalties, distributed dividends and profits and other financial income of the enterprises. Financial income includes: Interest income including loan interest, deposit interest, installment interest, profit from securities investment, payment discount etc. ; Distributed dividend and profit; Income from buying or selling activities of short term and long term securities; inv Income from collection and liquidation of share in joint venture, investment in associates, investment in subsidiaries and other investment; Income from other investment; Gain of foreign exchange difference; Gain generated from selling foreign currencies; Gain generated from transferring capital; Other financial income.

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THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS including Financial income is recorded in account 515 including interests, royalties, distributed dividends and profits, other financial income which is considered to perform during the period, not discriminating these incomes have gained or will gain. activiti For income gained from the buying and selling activities of securities, the recorded income is the difference of selling price exceed basic price; interest of bonds, stocks and bills. For income gained from buying and selling activities of foreign currencies, the recorded income is the difference between selling price and buying price of the foreign currency. For interest income gained from securities and bonds investment, only interest income realized after the enterprises bought the investment shall be recorded as financial income. The accumulated interests realized before buying investment are deducted against the cost value of the securities. Income gained from the sales of shares in joint venture, investments in associates are recorded to account 515 as the difference of sales price and cost value.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC STRUCTURE AND CONTENTS OF ACCOUNT 515 – FINANCIAL INCOME Debit: VAT payable in direct method if any ; Transfer net income from financial activities to account 911 Income summary .

Credit: Interests, distributed dividends and profits; Gain from selling shares in subsidiaries, in joint venture or in associates; Payment discounts; Gain of foreign exchange difference; Gain of foreign exchange difference arising from selling foreign currency; Gain of foreign exchange difference from revaluation of monetary items in foreign currency. revaluation Transferring or allocating gain of foreign exchange difference araising in construction period exchange pre-operating stage into financial income; Other financial income.

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Account 515 has no ending balance. MAJOR TRANSACTIONS 1. To record income from distributed dividends and profits araising from investment activities: Dr. 111, 112, 138 Dr. 221 Investment in subsidiaries received dividend in stocks Dr. 222 Share in joint venture distributed profit added back to contributed capital Dr. 223 Investment in associates distributed dividends and profits added back to investment capital Cr. 515 Financial income. 2. Accounting for securities investment: - When enterprises buy short term and long term securities, based on the actual expenses to record: Dr. 121, 228 Cr. 111, 112, 141 - Periodically calculating and receiving interest income from bills and bonds or acknowledgment on distributed dividends and profits: + When receiving interest income in cash:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 111, 112, 138 Cr. 515 Financial income + When distributed dividends and profits added back to contributed capital: Dr. 121 Short term investment Dr. 228 Other long term investment Cr. 515 Financial income - If the enterprise receives interest income including accumulated interest realized before buying investments, the enterprise must allocate these interest incomes. The enterprise should only record the interest incomes realized after bought the investments to the financial income. The accumulated interest income realized before buying the investments shall be deducted against their value: Dr. 111, 112 total interest income Cr. 121 Short term investment the accumulated interest before buying investments accumulated Cr. 223 Investment in associates the accumulated interest before buying investments Cr. 228 Other long term investment the accumulated interest before buying investments Cr. 515 Financial income interest income realized after bought back investments + Periodically receipts of interest income from stocks and bonds: Dr. 111, 112 Cr. 515 Financial income - Accounting for the sales of short term and long term securities: + If a profit is realized: Dr. 111, 112 total receipt amount Cr. 121 Short term investment prime cost Cr. 228 Other long term investment prime cost Cr. 515 Financial income gain generated from selling securities + If a loss is incurred: Dr. 111, 112 total receipt amount Dr. 635 Financial expenses loss from selling securities Cr. 121 Short term investment prime cost Cr. 228 Other long term investment prime cost - If the enterprises collect short term securities when due: Dr. 111, 112 total receipt amount Cr. 121 Short term investment prime cost Cr. 515 Financial income interest income 3. Accounting for the sales of foreign currencies operating activities when the profit is realized: Dr. 111 1111 , 112 1121 total receipt amount at the actual selling exchange rate Cr. 111 1112 , 112 1122 accounting book exchange rate Cr. 515 Financial income difference of the selling and accounting book exchange rate
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4. Periodically, calculating and determining interest income receivable according to loans contract: Dr. 138 Other receivable Cr. 515 Financial income 5. Receipts of interest income earned from deposits during the period: Dr. 111, 112 Cr. 515 Financial income 6. Accounting for payment discount: The amount is given due to making a full payment for purchase of goods before the contractual payment deadline and accepted by the sellers: Dr. 331 Trade payable Cr. 515 Financial income 7. When enterprises sell investment in subsidiaries, jointly control entity, associates, the subsidiaries, accountant records the financial income to account 515 as the difference of selling price and prime cost: Dr. 111, 112... Cr. 221 Investment in subsidiaries prime cost Cr. Share in joint venture prime cost Cr. 223 Investment in associates prime cost Cr. 515 Financial income difference of selling price and prime cost 8. Payment for purchase of merchandise, goods, fixed assets and services in a foreign currency: - If the average inter-bank or the actual exchange rate exceed the exchange rate of accounting book of accounts 111, 112: Dr. 151, 152, 153, 156, 157, 211, 241, 623, 627, 641, 642, 133... using the average inter-bank exchange rate or the actual exchange rate change Cr. 111 1112 , 112 1122 using the exchange rate of accounts 111, 112 Cr. 515 Financial income gain of foreign exchange difference 9. Payment for liabilities trade payable, short term and long term loans, long term payable, intercompany payable, etc. in a foreign currency when the exchange rate of accounts 111, 112 is less than that of accounts payable: Dr. 311, 315, 331, 336, 341, 342... accounting book exchange rate Cr. 515 Financial income gain of foreign exchange difference Cr. 111 1112 , 112 1122 accounting book exchange rate of accounts 111, 112 10. Collection receivables in a foreign currency Accounts receivable, inter-company receivable, etc. arising gain of foreign exchange difference: Dr. 111 1112 , 112 1122 the actual or the average inter-bank exchange rate Cr. 515 Financial income gain of foreign exchange difference
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 131, 136, 138 accounting book exchange rate

11. For difference of foreign exchange resulted from revaluation of balances of monetary items in foreign currency at the balance sheet date, the accountant must transfer these foreign exchange differences into financial income gain of foreign exchange difference in order to determine profit and loss: Dr. 413 Foreign exchange difference 4131 Cr. 515 Financial income 12. For newly established enterprises not in production yet, when construction is completed, gains of foreign exchange difference net value after offsetting debits and credits of account 4132 in construction stage pre-operating stage on account 413 Foreign exchange difference account 4132 should be transferred to financial income account 515 or to account 3387 gain of foreign exchange difference for allocation over the maximum period difference of five years. Dr. 413 Foreign exchange difference 4132 Cr. 515 Financial income if gains of foreign exchange difference is immediately recorded in exchange i financial income Cr. 3387 Deferred income if gains of foreign exchange difference is allocated + Periodically, gain of foreign exchange difference arisen in construction stage shall be allocated in financial income of the fiscal year when construction completed and fixed assets are put in use: Dr. 3387 Deferred income gains of foreign exchange difference Cr. 515 Financial income subject 13. When enterprises sell goods and services subject to subtraction method VAT in instalment plan, sales of goods sold and services provided is recognized at price of payment at sight. The difference of instalment price and price of payment at sight is recorded to account 3387 Deferred income : Dr. 111, 112, 131 Cr. 511 Sales of goods and services at price of payment at sight not including VAT Cr. 3387 Deferred income difference of instalment price and price of payment at sight not including VAT Cr. 333 Tax and statutory obligations 3331 VAT payable - Periodically, determining and transferring interest income arising from instalment sales: Dr. 3387 Deferred income Cr. 515 Financial income

14. At the end of each period, determining and allocating interest income from lending and bonds that were received in advance: Dr. 3387 Deferred income Cr. 515 Financial income 15. At the end of the period, determining VAT payable for goods and services applying direct
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC method in financing activities if any : Dr. 515 Financial income Cr. 3331 VAT payable

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 521 TRADE DISCOUNTS This account records trade discounts that enterprises credited or paid to customers who bought goods merchandise and goods , and services in large volumes in accordance with the agreement that the seller will give trade discount to the buyer as stipulated in contract or the selling or buying agreement . THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. This account is only used to record trade discounts given to buyers, arising in the period in according with the enterprise s trade discounts policy. Trade discount means a reduction of the listed price granted by the seller to the buyers with large volumes of goods. 2. If the buyers have to make several purchases to achieve the volume eligible for trade discount, the trade discount will be deducted to the price on the last VAT invoice or the last selling invoice . If customers stop buying, or the trade discount given to the buyer is greater than the sales amount on the last invoice, the enterprise shall pay the trade discount to the buyer in cash. The trade discounts in these cases are recorded into account 521. 3. If the buyers are given trade discounts due to purchase of large volumes of goods and selling prices on invoices are discounted ones net value , the trade discounts should not be recorded into account 521. Sales of goods sold are recognized at net value. 4. Trade discounts must be recorded in the relevant customer account and to the relevant items of goods sold such as merchandises and services provided. 5. Trade discounts arising during the period are debited into account 521 trade discounts . At the end of the period, all trade discounts are transferred to the account 511 Sales of goods and services to determine the net sales of goods and services sold and rendered in the period. ACCOUNT STRUCTURE AND CONTENTS OF ACCOUNT 521 – TRADE DISCOUNT Debit: The amount of trade discount allowed giving to customer. Credit: At the end of the period, all trade discounts are transferred to account 511 Sales of goods and services to determine the net sales. Account 521 has no ending balance. MAJOR TRANSACTIONS 1. Recording of trade discount during the period: Dr. 521 Trade discount Dr. 3331 VAT payable 33311 if any Cr. 111, 112, 131
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 2. At the end of the period, allowed trade discounts are transferred to sales account: Dr. 511 Sales of goods and services Cr. 521 Trade discount

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 531 SALES RETURN This account records the amount of goods and services sold which have subsequently been returned due to the following reasons: breaching the commitment or the economic contract, or inadequate quality, quantity or specifications. The amount of goods returned recorded in this account shall be adjusted against the actual sales for calculating the net sales of merchandise and goods sold in the period. This account only recognizes the value of goods returned using sales unit prices recorded in invoices . Expenses incurred by the enterprises with respect to sales returns will be recorded into account 641 Selling expenses . During the period, the value of goods returned is debited into account 531 Sales return . At the end of the period, total value of goods returned will be transferred to the sales account or the inter-company sales in order to determine net sales for the accounting period. Goods returned sales must put into the warehouses, and resolve according to the current financial and tax system. according STRUCTURE AND CONTENTS OF ACCOUNT 531 – SALES RETURN Debit: The sales of goods retuned, given back to the buyers or deducted in receivables. Credit: Transfer of sales returned to the debit of account 511 Sales of goods and services or account 512 Inter-company sales in order to determine net sales for the accounting period. Account 531 has no ending balance. MAJOR TRANSACTION 1. When enterprises received goods returned, the account must record cost of goods returned: accountant - When the perpetual inventory system is used: Dr. 154 Work in process Dr. 155 Finished goods Dr. 156 Merchandise goods Cr. 632 Cost of goods sold - When the periodic inventory system is used: Dr. 611 Purchases merchandises Dr. 631 Cost of products manufactured finished goods Cr. 632 Cost of goods sold 2. Payments to the buyers of the amount of goods returned: - For merchandise and goods subject to subtraction method VAT and enterprises paying Subtraction method VAT:
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Dr. 531 Sales return selling price not including VAT Dr. 3331 VAT payable 33311 the VAT amount of goods returned Cr. 111, 112, 131 - For merchandise and goods not subject to VAT or subject to VAT in direct method: Dr. 531 Sales return Cr. 111, 112, 131 3. Expenses incurred if any by the enterprise due to the return of goods sold: Dr. 641 Selling expenses Cr. 111, 112, 141, 334 4. At the end of the period, all sales return shall be transferred to the sales account or intershall company account: Dr. 511 Sales 5111, 5112 Dr. 512 Inter-company sales Cr. 531 Sales return

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 532 SALES ALLOWANCES This account records allowances and resolves allowances during the period. Allowance is a reduction made in the selling price to the customers for goods sold which have minor defects, or the goods are not of the same specifications as those mentioned in the economic contracts. This account is only used to record allowances to customer accepted by the enterprises after the sales invoice has been issued reduction off the invoice . During the period, allowances araising are recognized as debits in account 532 Sales allowances . At the end of the period, the enterprises must transfer total allowances to account 511 Sales of goods and services or account 512 Inter-company sales before preparing rmine financial statements in order to determine net sales for the accounting period. STRUCTURE AND CONTENTS OF ACCOUNT 532 – SALES ALLOWANCES ACCOUNT Debit: Allowances accepted to buyers for goods sold which have minor defects, or the goods are not of the same specifications as those mentioned in the economic contracts mentioned Credit: Transfer of the debit of allowances to the Sales account or Inter-company sales . Account 532 has no ending balance. MAJOR TRANSACTIONS 1. When supporting documents showing that allowances to customer for goods sold which have minor defects, or the goods are not of the same specifications as those mentioned in the same economic contracts: a. In the case, merchandise and goods which have been agreed to reduce price subject to subtraction method VAT and the enterprises paying Subtraction method VAT, the allowances are recorded as follows: Dr. 532 Sales allowances selling price not including VAT Dr. 3331 VAT payable 33311 VAT amount of goods sold that is discounted Cr. 111, 112, 131 b. In the case, merchandise and goods which have been agreed to reduce price not subject to VAT or subject to VAT in direct method, the allowances are recorded as follows: Dr. 532 Sales allowances Cr. 111, 112, 131 2. At the end of the period, the enterprises should transfer total allowances araising during the period to Sales account or Inter-company sales account: Dr. 511 Sales
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 512 Inter-company sales Cr. 532 Sales allowances

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC CATEGORY 6 EXPENSES These accounts record manufacturing expenses and costs of products and services for enterprises using the periodic inventory method , purchases of material, merchandises and services and the cost of goods sold, financial expenses, selling expenses and administrative expenses of enterprise in various industries. THIS ACCOUNT MUST COMPLY WITH FOLLOWING REGULATIONS 1. An enterprise may choose its inventory system between either perpetual or periodic system provided that the chosen inventory system is applied consistently for at least one accounting year. 2. Enterprises using the periodic inventory system must carry out physical inventory counts at the end of each accounting period in order to determine the value of merchandise goods, finished goods and raw materials remaining in the warehouses. Based on the value of the inventory at the beginning of each accounting period, purchases made during the accounting period, and the value of inventory at the end of the accounting period, the enterprise can end determine the amount of inventory used, and, therefore, can also determine the cost of goods therefore, sold for the period. 3. Accounts that include manufacturing and product costs such as account 154 Work in Progress perpetual inventory system , account 631 Cost of products manufactured account periodic inventory system must maintain subsidiary accounts for each cost centre such as subsidiary plant, production team, manufacturing section, etc., for each product, line of products, services, etc., in addition to maintaining control accounts. Production and business expenses which cannot be associated to a product such as factory overhead, water irrigation and draining expenses, floor preparation expenses and first year planting expenses for trees must first be recorded in control accounts and then allocated to the relevant products by an appropriate method. Category 6 – Expenses is comprised of ten accounts, classified into four groups: accounts, Group 61 has one sub-account: Account 611 Purchase

Group 62 has four sub-accounts: Account 621 Account 622 Account 623 Account 627 Raw material costs; Direct labour costs; Machine costs; Factory overhead costs.

Group 63 has three sub-accounts: Account 631 Account 632 Account 635 Cost of products manufactured Cost of goods sold; Financial expenses.
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Group 64 has two sub-accounts: Account 641 Account 642 Selling costs; General and administration expenses.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 611 PURCHASE This account records the amount of materials, tools and supplies, goods purchased during the period. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Account 611 Purchases is only used in those enterprises using the periodic inventory system. 2. When recording to this account, the value of materials, hand tools should be stated at cost original cost . 3. When using the periodic inventory system, the company must carry out physical inventory counts determine at the end of accounting period in order to determine the quantity and value of each raw materials, tools and supplies, goods remaining in the warehouse. As the result, the amount of inventory used can be determined and also the cost of goods sold for the period. inventory 4. When using the periodic inventory system, the accountant, based on invoice, bill of lading, receipt goods received notes, import tax advice or receipt voucher of import tax records raw materials, tools and supplies, goods at historical cost to account 611 Purchase . Inventory used for business, production or sales can only be recorded at the end of the accounting period once the physical inventory count has been performed. 5. Sub-ledgers must be maintained in order to keep a record of the costs of each inventory category such as raw materials, tools and supplies, merchandise goods. STRUCTURE AND CONTENTS OF ACCOUNT 611 – PURCHASE Debit: and Costs of raw materials, tools and supplies, and merchandise goods available at the beginning of the accounting period following the physical inventory count results ; Costs of raw materials, tools and supplies, merchandise goods purchased during the period, goods returned, etc.

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Credit: Cost of raw materials, tools and supplies, merchandise goods available at the end of the accounting period following the physical inventory count results ; Cost of raw materials, tools and supplies, merchandise goods used during the period, or cost of raw materials, tools and supplies, inventory on consignment, merchandise goods sold; Cost of raw materials, tools and supplies, merchandise returned to the sellers or discounts offered by sellers.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Account 611 has no ending balance. Account 611 – Purchase has two sub-accounts Account 6111- Purchase raw material: to record cost of raw materials, tools and supplies purchased or used during the period and transfer of cost of raw materials, tools and supplies, merchandise goods at the beginning and at the end of accounting period. Account 6112 – Purchase merchandise: to record cost of merchandise goods purchased or used during the period and transfer cost of raw materials, tools and supplies, merchandise goods at the beginning and at the end of accounting period.

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MAJOR TRANSACTIONS I. Manufacturing enterprises such as industry, agriculture, forestry, construction, etc. balance 1. At the beginning of the period, the opening balance of the raw material, tools and supplies purchases account must be set up using the result of physical inventory count: Dr. 611 Purchase 6111 Purchase of raw material Cr. 152 Raw material Cr. 153 Tools and supplies supplies 2. When purchasing raw materials, tools and supplies used for production of goods and services subject to Subtraction method VAT, the cost of raw materials, tools and supplies not including VAT is recorded to account 611. Dr. 611 Purchases 6111 Purchase raw materials price not including VAT Dr. 133 VAT deductible Cr. 331 Trade payables 3311 3. When purchasing raw materials, tools and supplies are used for production of goods and services not subject to VAT or subject to VAT in direct method, the cost of raw materials, tools and supplies including VAT is recorded to account 611. Dr. 611 Purchase 6111 Purchase raw materials total amount Cr. 331 Trade payables 4. For enterprises paying VAT in direct method, the cost of raw materials, tools and supplies including VAT is recorded in account 611: Dr. 611 - Purchase 6111 Purchase raw materials total amount Cr. 331 Trade payables 5. Where the enterprise is offered a discount by the seller when paying for purchases, the entry is: Dr. 331 Trade payables Cr. 111, 112,... Cr. 515 Financial income discount amount 6. Where the purchases are not the right specifications or do not meet the quality specified in the economic contract or other commitments leading to goods are returned or discounted:
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Based on the value of goods being returned to the seller: Dr. 111, 112 if cash is received Dr. 331 Trade payables reductions to accounts payable by the enterprise Cr. 611 Purchase 6111 Cost of raw materials, tools and supplies returned to the seller Cr. 133 VAT deductible 1331 if any

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If the enterprise agrees to keep the goods for an allowance: Dr. 112 if cash is received Dr. 331 Trade payables net off against accounts payable Cr. 611 - Purchase 6111 purchase allowance Cr. 133 VAT deductible if any .

7. At the end of the accounting period, based on the results of the physical inventory count, the entity will be able to determine the value of ending inventory, inventory used during the period and the cost of goods sold for the period. Determining the cost of inventory available at the end of the accounting period following result of physical inventory count : Dr. 152 Raw materials Dr. 153 Tools and supplies Cr. 611 - Purchase 6111 Determining the cost of inventory used for business and production during the period: Dr. 621, 623, 627, 641, 642, 241,... Cr. 611 - Purchase 6111 . Determining the cost of inventory losses based on records of inventory losses: losses Dr. 138 Other receivables 1381 Cr. 611 - Purchase 6111 II. Trading enterprise 1. At the beginning of accounting period, the opening balance of account 611 must be set up using the result of physical inventory count: Dr. 611 Purchase 6112 Cr. 156 Merchandise goods 2. During the accounting period, when purchased goods used in production of goods and services subject to subtraction method VAT, or in direct method, based on invoice and purchase document to record: 3. The costs of goods purchased: Dr. 611 - Purchase 6112 Dr. 133 VAT deductible 1331 if any Cr. 111, 112, 141; or
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 331 Trade payables Total amount .

4. Purchasing expenses incurred: Dr. 611 Purchase 6112 Dr. 133 VAT deductible 1331 if any Cr. 111, 112, 141, 331,... 5. When payment after the due date, if the enterprise is offered a purchase discount: Dr. 331 Trade payables net off against account payable Cr. 111, 112,... Cr. 515 Financial income discount amount 6. The value of goods returned to the seller: Dr. 111, 112 if cash is received Dr. 331 Trade payables net off against account payable Cr. 611 Purchase 6112 the value of goods returned to the seller Cr. 133 VAT deductible 1331 if any 7. Discount since the purchases are not the right specifications and qualify specified in the contract: Dr. 111, 112 if cash is received Dr. 331 Trade payables reduction to the account payable by the enterprise Cr. 611 Purchase 6112 Cr. 133 VAT deductible 1331 if any 8. At the end of accounting period, based on results of physical inventory count to determine cost of inventory in the warehouse, cost of goods on consignment, cost of goods sold. goods 9. Determining cost of inventory and cost of goods on consignment at the end of the period: Dr. 156 Merchandise goods Dr. 157 Goods on consignment Cr. 611 - Purchases 10. Determining the cost of goods sold: Dr. 632 Cost of goods sold Cr. 611 - Purchase 6112

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 621 RAW MATERIALS COST This account records the cost of material directly utilised for production or for rendering services in industries such as construction, agriculture, forestry, fishery, transportation, telecommunication, hospitality, tourist, and other services. THIS ACCOUNT MUST COMPLY WITH FOLLOWING REGULATIONS 1. This account can only record materials including main materials and sub-materials used for production of goods and services in the period. When the material is used, it must be recorded in this account at the actual cost. 2. During the accounting period, the actual costs of materials used must be recorded debit 621 to each unit that uses materials directly if the unit can be identified when using the materials for producing or rendering services or recorded generally for the whole process of producing identified and rendering services if the unit cannot be identified when using the materials for producing or rendering services . 3. At the end of the period, the costs of materials will be transferred if the materials are impossible recorded separately to each unit , or allocated if it is impossible to record subject to each separate unit to the account 154 for the purpose of computing the actual costs of products and services rendered during the accounting period credit 621 . When allocating costs of relevant materials used to manufactured products, relevant allocating criteria, such as criteria of material volume used must be applied. 4. For the enterprise paying subtraction method VAT, if purchase of raw materials for production and rendering of services subject to subtraction method VAT, or purchase of raw materials that don t go through warehouse but put in production and business right away, cost of those raw materials recorded should not be included VAT. For the enterprise paying VAT in subtraction method, if purchase of raw materials for production and rendering of services not subject to VAT or subject to VAT in direct method and enterprise paying VAT in direct method, or purchase of raw materials that don t go through warehouse but put in production and business right away, cost of those raw materials should be included VAT. 5. The amount of raw material that is higher than normal level shall not be computed into the cost of products but transferred to account 632 Cost of goods sold . STRUCTURE AND CONTENTS OF ACCOUNT 621 – RAW MATERIAL COST Debit: Actual material used for manufacturing or rendering services during the period. Credit: 1. Transfer the value of raw material used for production, business during the period to account 154 Work in process or account 631 Cost of products manufactured and detailed by cost centre for computing the costs of products and services.
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 2. Transfer of the value of materials exceeded the normal rates abnormal cost to account 632. 3. The value of residual material to be returned to the warehouse. Account 621 has no ending balance. MAJOR TRANSACTIONS 1. During the accounting period, upon distribution of material for direct use in order to produce products and render services, the following entry will be made: Dr. 621 Raw material costs Cr. 152 Raw materials 2. In the case, purchase of raw material not through the company s premise used for ect production of goods and services subject to subtraction method VAT: Dr. 621 Raw material cost price not including VAT Dr. 133 VAT deductible Cr. 331, 141, 111, 112,... materials 3. Where purchase raw materials not through the company s premise subject production of goods and services subject to VAT in direct method. Dr. 621 Raw material cost price not including VAT Cr. 331, 141, 111, 112,... 4. Upon returning, the unused material distributed for manufacturing: Dr. 152 Raw material Cr. 621 Raw material cost 5. At the end of accounting period, allocate cost of raw material to each cost centre plant, construction type of products, construction work, construction category, services, etc. : Dr. 154 Work in process Dr. 631 Cost of products manufactured using the periodic inventory system Dr. 632 Cost of goods sold abnormal cost of materials used Cr. 621 Raw material costs is used for

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 622 DIRECT LABOUR COST This account records the direct labour costs directly utilized for producing and rendering of services in industries such as construction, agriculture, forestry, fishery, transportation, telecommunication, hospitality, tourist, and other services. Direct labour costs include accounts payables to employees who is managed by the enterprise and directly take part in the production of goods or the rendering of services, and those hired from outside for particular jobs. Payment would include salaries, wages, allowances, and deductions according to salaries, such as social insurance, health insurance and trade union fee. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. The payment of salaries and allowances for factory employees, sales clerk and management staff will not recorded in account 622. allowances, insuran 2. For construction contractor, salaries, wage and allowances, social insurance, health insurance, trade union fees for the direct employees should not be recorded into this account. 3. Sub-accounts by cost centre must be maintained. normal 4. The direct labour cost that is higher than normal rate shall not be computed into cost of products but transferred to account 632 Cost of goods sold . ACCOUNT STRUCTURE AND CONTENTS OF ACCOUNT 622 – DIRECT LABOUR COSTS Debit: Cost for employees directly involved in the operating activities including salary. Credit: 1. Writing off direct labour cost to account 154 Work in progress or account 631 Cost of products manufactured ; 2. Transfer of direct labour cost higher than normal rate to account 632. Account 622 has no ending balance. MAJOR TRANSACTIONS 1. Based on the payroll slip to record salary, wages and allowances for direct employees who directly take part in production of goods and services: Dr. 622 Direct labour cost Cr. 334 Payables to employees 2. Based on payroll slip to compute and record social insurance, health insurance, trade union fees for direct employees according to current regulations the amount covered by the entity : Dr. 622 Direct labour cost
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 338 Other payables 3382, 3383, 3384

3. Where accruals are made for annual leave of employees in production department: Dr. 622 Direct labour costs Cr. 335 Accruals 4. Records salary for manufacturing employees who take annual leave: Dr. 335 Accruals Cr. 334 Payables to employees 5. At the end accounting period, direct labour cost must be determined and transferred to account 154 debit or account 631 credit by cost centre: Dr. 154 Work in process; or Dr. 631 Cost of manufactured using the periodic inventory method Dr. 632 Cost of goods sold amount of direct labour cost that is higher than normal level Cr. 622 Direct labour cost

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 623 MACHINE COSTS This account is to record and allocate costs incurred on motor vehicles and construction machines used in construction and installation works in a mixed manner, that is, works are carried out both by hand and by machine. In the case of the enterprise completed construction work by machines, expenses incurred shall not be recorded into this account but to accounts 621, 622, 627. Social insurance, health insurance, trade union fees of direct employees shall not be recorded to this account. The amount of machine costs that is higher than the normal level shall not be recorded to cost of construction but transferred to account 632. STRUCTURE AND CONTENTS OF ACCOUNT 623 – MACHINE COSTS Debit: Expenses incurred by using machines e.g. auxiliary materials, salary, allowance, wages for auxiliary employees who directly involved in operating construction vehicles and machines, maintenance construction expenses, repairing expenses, etc. , other material costs, services rendered expenses for machine. material Credit: Transfer machine costs to the credit side of account 154 Work in progress ; Transfer the amount of machine costs that is higher than the normal level to account 632.

Account 623 has no ending balance. Account 623 has six sub-accounts sub-accounts: Account 6231 – Labour cost: to record salary and extra paid, allowance payables to employees who directly involved in operating construction vehicles and machines or serving construction the operation, such as catering fuels, supplies etc. for construction vehicles and machines. Social insurance, health insurance, trade union fees of these employees should not be recorded in this account. These expenses should be recorded to 627 Factory overhead costs . Account 6232 – Use of auxiliary materials: to record fuel fees gas, oil, lubricant, etc. , other supplies for construction vehicles and machines. Account 6232- Use of tools and supplies: to record tools and supplies related to machines. Account 6234 – Depreciation: to record depreciation of construction vehicles and machines. Account 6237 – External service expenses: to record such expenses as repairing, insurance, electricity, water, lease assets, expenses for sub-constructor, etc. Account 6238 – Sundry cash expenses: to record sundry cost attributable to the running of vehicles and machines.
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MAJOR TRANSACTIONS Accounting for machine costs depends on the method of the construction vehicles and machines organized, on the means of the operation of a specialized team of vehicles and machines or assignment of vehicles and machines to construction units. 1. In the case of a specialized team of vehicles and machines with a separate accounting system, the practice shall be as follows: Recording expenses incurred in team s operation: Dr. 621, 622, 627 Cr. 111, 112, 152, 331, 334, 214,... The machine costs and costing of a work shift are recorded to account 154 Work-inprogress . Based on the cost actual costs or lump-sum price of a work shift provided to each lump-sum construction work and with the accounting organization and the work relation between the organization specialized team and the construction unit taken into account, relevant entries would be taken posted. whereby Where the enterprise applies the approach whereby services are internally provided among units and sections: Dr. 623 Machine cost 6328 Sundry cash expenses Cr. 154 Work in process the Where the enterprise applies the approach whereby services are internally sold among units and sections: Dr. 623 Machine cost 6238 Sundry cash expenses Dr. 133 VAT deductible 1331 if any Cr. 333 Tax and statutory obligations 33311 internal sale the services Cr. 512 Inter-company revenue.

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VAT payable calculated based on

2. Where such a specialized team is not organized or is organized without a separate accounting system, the whole machinery running costs including recurring expenses and non-recurring expenses: extra-pay, running allowances attributable to construction vehicle and machines shall be recorded as follows: Base on salary, wage and other payable for employees who directly involved in operating construction vehicles and machines: Dr. 623 Machine cost 6231 labour cost Cr. 334 Payables for employees Raw material, tools used for machines during the period: Dr. 623 Machine costs 6232 Cr. 152, 153 auxiliary material

In the case of purchase of raw material, tools that are put in use for machine not through the
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Company s premise : Dr. 623 Machine cost 6232 auxiliary materials price not including VAT Dr. 133 VAT deductible deducted VAT Cr. 331, 111, 112,... Calculating depreciation for machines: Dr. 623 Machine cost 6234 depreciation Cr. 214 Accumulated depreciation and amortization. Services rental incurred repairing, water, electricity, payment to sub-constructor, etc. Dr. 623 Machine cost 6237 Services rental Dr. 133 VAT deductible Deducted VAT Cr. 111, 112, 331,... Sundry cash expenses incurred: Dr. 623 Machine cost 6238 Sundry cash expenses Dr. 133 VAT deductible Deducted VAT Cr. 111, 112,... Based on the list of allocation of machine cost actual cost of a work shift using machine : Dr. 154 Work in process Amount of machine cost Dr. 632 Cost of goods sold Amount of machine cost th at is higher than normal level that Cr. 623 Machine cost

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390

MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 627 FACTORY OVERHEAD COSTS This account is to record expenses incurred in plants, segments, teams, constructions etc., in support of the production of goods and rendering of services. These expenses would include expenses for plant, team or site management personnel; salary-based deductions for such personnel s social insurance, health insurance and trade union fee. For the construction contractor, such expenses would include deductions for social insurance, health insurance and trade union fee made based on the salaries of those directly involved in the construction work and site management personnel managed by the enterprises ; plant depreciation, borrowing costs that is capitalized during the course of construction, repairing and warranty expenses and other related expenses. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Account 627 is only used for enterprises involved in industry, agriculture, forestry and fishery, capital construction, transportation, telecommunication, tourism and other services. plant, 2. Account 627 records in details for each plant, section, team, manufacturing team. 3. Factory overhead costs reflecting on account 627 must be recorded into sub-accounts: fixed overhead costs and variable overhead cost: expenses. 3.1 Fixed overhead cost is indirect production expenses. Those expenses incur not depending on amount of products are produced such costs as maintenance machine, maintenance equipment, maintenance plant, etc., and administration expenses in each plant, section, unit, administration team, etc. Fixed overhead cost is allocated to work in progress for each product unit based on normal capacity of machines. Normal capacity is amount of products which is produced at average level in normal production condition. In the case of actual amount of pr products produced xed costs higher than normal capacity, fixed overhead co sts will be allocated for each product unit according to actual expenses incurred. In the case of actual amount of product lowe than normal capacity, fixed overhead costs lower shall be allocated to work in progress for each product unit according to normal capacity. The amount of fixed overhead costs that has not been allocated, would be recorded to cost of goods sold during the period. Variable overhead cost is indirect production expenses. Those expenses usually vary according to amounts of products produced such as indirect raw material cost, indirect labour cost. All variable overhead cost is allocated to work in progress of each product unit according to actual expenses incurred. 4. In the case of one production process having different kinds of products at the same time, factory overhead cost can not reflect separately for each product. Therefore, factory overhead cost is allocated to each kind of product based on to suitable criteria and consistently applied in the accounting period. 5. At the end accounting period, the accountant must calculate, allocate and transfer factory overhead costs to account 154 debit Work in process or account 631 credit Cost of
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391

MINISTRY OF FINANCE Decision 15/2006/QD-BTC products manufactured . 6. Account 627 is not used for trading entity. STRUCTURE AND CONTENTS OF ACCOUNT 627- FACTORY OVERHEAD COSTS Debit: General expenses arising during the period.

Credit: Decrease factory overhead costs; The amount of fixed factory overhead costs that is lower than normal capacity shall be recorded to cost of goods sold during the period; Transfer of factory overhead costs to account 154 Work in process Cost of products manufactured . debit or account 631

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Account 627 has no ending balance. Account 627 –Factory overhead costs has six sub- accounts: Account 6271 – Indirect labour: to record salary and allowance, meal allowance within work shift, salary based-deductions for personnel s social insurance, health insurance, trade union fees according to current regulation for manager of plant, manufacturing pl regulation team. Account 6272 - Use of auxiliary materials: to record auxiliary materials costs for the general materials: use of the factory including repairs and maintenance fees for fixed assets, tools, structures and buildings, etc. Account 6273 –Use of tools and supplies: to record tools and supplies costs that is used to management operation in plant, unit, manufacturing team, etc. Account 6274 – Depreciation: to record depreciation for fixed asset which is directly used for production operation, rendering services and fixed a asset that is generally used for operation of plant, section, manufacturing team, etc. Account 6277 – Services rendered: to record services rendered cost supporting for operations of plant, manufacturing team such as repairing expenses, rendered expenses, electricity, water, telephone, leases of asset, payables for sub-contractor construction company . Account 6278 – Sundry cash expenses: to record all expenses paid in cash not mentioned above attributable to the operation of plant, section, manufacturing team.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC MAJOR TRANSACTIONS 1. To record salaries, wages and other allowances for employees, meal allowance during work shift of supervisors in plant, section, manufacturing team: Dr. 627 Factory overhead costs 6271 Cr. 334 Payables to employees 2. To record social insurance, health insurance, trade union fees, for factory employees under the relevant regulations Dr. 627 Factory overhead costs 6271 Cr. 338 Other payables 3382, 3383, 3384 3. To record material expenses the perpetual method applied based on issuance of auxiliary materials: repairing, Raw material is used for plant such as repairing, maintain fixed asset which is used for control and supervision operation of plant: Dr. 627 Factory overhead costs 6271 Cr. 152 Raw materials Tools and supplies with low values which are used for plant, manufacturing team, based on issuance of stock to record: Dr. 627 Factory overhead costs 6273 Cr. 153 Tools and supplies Tools and supplies with high values which is used for plant, manufacturing team would be allocated in the future: Dr. 142, 242 Cr. 153 Tools and supplies When tools and supplies are allocated into factory overhead costs, the entry is: Dr. 627 Factory overhead costs 6273 Cr. 142 Short term prepayment Cr. 242 Long term prepayment. 4. To record depreciation of fixed assets consisting of machines, vehicle, buildings etc.: Dr. 627 Factory overhead costs 6274 Cr. 214 Accumulated depreciation and amortization of fixed assets 5. Water, electricity, telephone and other expenses paid for outside services supporting to the production: Dr. 627 Factory overhead costs 6278 Dr. 133 VAT deductible deducted VAT Cr. 111, 112, 331,...
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 6. If the provision for overhaul and maintenance of fixed assets has been made or allocation for these expenses are done, those expenses should be charged to factory overhead: Provision or allocation the extraordinary repair of fixed asset expenses: Dr. 627 Factory overhead costs 6273 Cr. 335, 142, 242 The repair of fixed asset expenses incurred: Dr. 2413 - Extraordinary repairs Dr. 133 VAT if any Cr. 331, 111, 112,... When fixed asset overhaul has been completed: Dr. 142, 242, 335 Cr. 2413 Extraordinary repairs 7. Record expenses incurred related to fixed asset under operating lease: When initial direct expenses incurred related to operating lease: Dr. 627 Factory overhead costs low value recorded into expenses in the current period Dr. 142, 242 high value that will be allocated in a period of time Dr. 133 VAT deductible if any Cr. 111, 112, 331,... Periodically, allocate depreciation for fixed asset under operating lease to factory overhead costs: Dr. 627 Factory overhead costs Cr. 214 - Accumulated depreciation and amortization fixed asset under operating lease amortization Periodically, allocate initial direct expenses related to operating lease: Dr. 627 Factory overhead costs Cr. 142 Short term prepayment Cr. 242 Long term prepayment 8. In construction company, when determining provision for maintenance of construction work: Dr. 627 Factory overhead costs Cr. 352 Provisions When repair and maintenance expenses incurred for construction work: Dr. 621, 622, 623, 627 Cr. 111, 112, 152, 214, 334,... At the end, reallocate repair and maintenance expenses for construction work: Dr. 154 Work in process
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 621, 622, 623, 627 When repair and maintenance of fixed assets for construction has been finished: Dr. 352 Provisions Cr. 154 Work in process 9. At the end of accounting period, determine and pay interest expenses in the case of borrowing costs capitalised into construction work: Dr. 627 Factory overhead costs construction on-going Cr. 111, 112 If interest expenses periodically paid 10. At the end of accounting period, determine and make accruals of interest expenses in the case of borrowing costs capitalised into construction work: Dr. 627 Factory overhead costs Cr. 335 Accruals interest expenses payables 11. When prepayment of interest expenses during construction stage: Dr. 142, 242 Cr. 111, 112,... Periodically, allocate prepayment of interest expenses to factory overhead cost capitalised : Dr. 627 Factory overhead costs Cr. 142, 242 12. Decrease in factory overhead cost: Dr. 111, 112, 138,... Cr. 627 Factory overhead cost 13. At the end of the accounting period, based on the list of allocation of factory overhead costs to related account for each product, group of products or service to cost centre. Where the enterprise uses the perpetual inventory method, factory overhead costs are allocated as follows: Dr. 154 Work in process Dr. 632 Cost of goods sold amount of fixed overhead costs not allocated Cr. 627- Factory overhead costs Where the enterprise uses the periodic inventory method, factory overhead costs are allocated as follows: Dr. 631 Cost of products manufactured Dr. 632 Cost of goods sold amount of fixed overhead costs allocated Cr. 627 Factory overhead costs if

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 631 COST OF PRODUCTS MANUFACTURED This account is used to reflect the total expenses with respect to production and to calculate the cost of finished products and services in the manufacturing company including industrial, agricultural and construction enterprises . This account is only used by those companies who use the periodic inventory method. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Enterprises using the perpetual inventory method will not use this account. hould 2. Only expenses for production and operations should be recorded in account 631 as follows: Raw materials costs; Direct labour costs; Machine costs for construction enterprise Factory overhead costs

The following expenses should be recorded in this account: Selling expenses; General and administration expenses; Financial expenses; Other expenses Expenses for administrative activities.

3. The following should be recorded in account 63 expenses relating to the operations of a 631: supplementary production area that supports th principal production areas activities such as the cost of goods, materials, and expenses on products entrusted to other enterprises for processing. 4. The account will be recorded in detail with respect to where the expenses originated i.e. plant, production team, etc. in product group or type of service. 5. With respect to agricultural businesses, the cost of produce is normally identified by the end of a crop or a year. Produce is priced in the year in which it is harvested, that is, a cost incurred in a year is recognized in the subsequent year, or harvesting year. In respect of businesses in the cultivation sector, accounting for production costs should be detailed as follows: Short term trees; Trees cultivated for several harvests;
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Long term trees. As regards to plants which grow in two or three crops in a year, or which are grown in a year and yield in the subsequent year or which is both grown and gives yields at the same time etc, records shall be entered allowing for the current situation, with cost separated for one crop, one planting area and one year from another. Expenses for cultivating trees and maintaining the long-term trees should not be posted to account 631. For expenses attributable to several cost centers, or to a number of crops or years, records shall be kept in separate accounts, wherefrom costs shall subsequently be allocated to the production cost of relevant produce, such as irrigation, soil preparation, and new plantation of trees, plants grown once but harvested many times such expenses are not capitalized . Where two or more races of annual plants grow in the same cultivated area, expenses shall be relevantly allocated to each race of plants i.e. seeding, sowing, harvesting, etc. and general i.e. harv expenses soil preparing, watering, etc. shall be recorded in separate ac accounts and allocated to each race of plants by cultivated areas. With regards to long-term trees, the expenses for soil preparation, site preparation, raising for seedlings, fertilizing and other work needed to be done up to the first harvest should be recorded considered pre-operating expenses and recorded in account 241 Construction in progress the Expenses for raising livestock will be grouped by the type of livestock i.e. cow raising, pig raising, chicken raising, etc . With regards to poultry used for breeding, when their breeding duration is over, their value will be recorded in account 631 Cost of products manufactured according to residual values.

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6. In the transportation sector, account 631 Cost of products manufactured must be detailed with regard to each kind of activity e.g. passenger transportation and cargo transportation . passenger During transportation, tires depreciated at a faster rate than the motor vehicle itself because faster they need be replaced more often. When new tires are needed, their costs should not be new charged to transportation fees right away. The enterprise should either provide for these costs beforehand or allocate the costs to the month cost of products manufactured. 7. In hotel operations, account 631 must be recorded in detail as to the type of activity, such as meals, room services, entertainment and other services e.g. laundry, ironing, barber's, telecommunication and massage . STRUCTURE AND CONTENTS OF ACCOUNT 631 - COST OF PRODUCTS MANUFACTURED Debit: Opening balance of work in progress; Expenses incurred in the accounting period.

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397

MINISTRY OF FINANCE Decision 15/2006/QD-BTC

Credit: - Value of finished goods and completed services posted into account 632 Cost of goods sold ; Value of work in process posted to account 154 Work in process .

Account 631 has no ending balance. MAJOR TRANSACTIONS 1. Reallocate opening balance of work in progress to account 631 manufactured : Dr. 631 Cost of products manufactured Cr. 154 Work in process 2. At the end of the accounting period, post the direct material cost to cost of production: Dr. 631 Cost of goods manufactured Cr. 621 Raw materials cost 3. At the end of the accounting period, post the direct labour cost to cost of production: Dr. 631 Cost of products manufactured Cr. 622 Direct labour cost. 4. At the end of the accounting period, allocate the factory overhead cost to cost of products the manufactured according to each group of finished goods, services: Dr. 631 Cost of products manufactured Dr. 632 Cost of goods sold amount of fixed overhead cost not allocated Cr. 627 Factory overhead cost. 5. At the end of the accounting period, based on physical inventory count result to determine cost ph of goods and services in progress: Dr. 154 Work in process Cr. 631 Cost of products manufactured 6. The cost of finished of goods and completed services: Dr. 632 Cost of goods sold Cr. 631 Cost of products manufactured Cost of products

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 632 COST OF GOODS SOLD This account is used to record the cost of goods sold and services, investment property, cost of construction work for construction contractor during the period. Besides, this account is used to reflect expenses related to investment property such as depreciation, repairing expenses, expenses related to investment property under operating lease low value , selling expenses and disposal expenses of investment property. STRUCTURE AND CONTENTS OF ACCOUNT 632 – COST OF GOODS SOLD 1. Where enterprise uses the perpetual inventory method Debit: + + For manufacturing company: Cost of goods sold and services rendered in the period. Raw materials cost and labour cost used higher than normal level recorded to cost of goods sold in the period. Shortage or loss of inventory remained after deducted the amount that is charged to the responsible person; Construction expenses and self-built assets higher than normal level that are not recorded to self-built historical cost of self-built fixed asset; Provision for obsolete stock a positive difference of provision for obsolete stock in this year and unused provision for obsolete stock made in the last year . For company operating in investment property: Depreciation for investment property in the period; Repairing, upgrading, improving expenses for investment property that did not meet criteria to record into cost of investment property; Expenses incurred for investment property under operating lease in the period; Net book value of investment property when disposed; Expenses incurred when sell or dispose investment property in the period.

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Credit: Cost of goods and services sold posted to account 911 Income summary ; Allocate expenses incurred from sales of investment property in the period into income summary;
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC

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Reverse of provision for obsolete stock in the end of fiscal year a negative difference of provision in this year and unused provision made in the last year ; Cost of goods returned and put back into the warehouse.

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2. Where enterprise uses the periodic inventory method 2.1. Trade enterprise Debit: Cost of goods sold in the period; Provision for obsolete stock a positive difference of provision for obsolete stock in this year and unused provision for obsolete stock in the last year .

Credit: Cost of goods transferred out of the warehouse but not yet sold; Reverse of provision for obsolete stock in the end of fiscal year a negative difference of provision for obsolete stock in this year and unused provision for obsolete stock in the last year ; Cost of goods actually sold transferred to account 911 - Income Summary.

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2.2. Manufacturing and services enterprise Debit: Opening balance of finished goods; Provision for obsolete stock a negative difference of provision required in this year and unused provision made in last year ; Cost of finished goods into the warehouse and services rendered.

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Credit: Cost of closing inventory transferred to the debit side of account 155 Finished goods;

Reverse of provision for obsolete stock in the end of fiscal year a negative difference of provision in this year and unused provision made in last year ; Cost of goods and services sold transferred to the debit side of account 911 Income summary .

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Account 632 has no ending balance. MAJOR TRANSACTIONS I. Where enterprise uses the perpetual inventory method
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC

1. Goods and services are actually sold in the period: Dr. 632 Cost of goods sold Cr. 154, 155, 156, 157, 2. To reflect expenses which is directly recorded to cost of goods sold In the case, amount of goods produced are lower than normal level, the accountant must calculate and determine fixed overhead costs to allocate to production cost of one product unit according to normal level. Amount of fixed overhead cost not allocated difference of actual fixed overhead cost incurred greater than factory overhead costs would be recorded into cost of goods sold. Dr. 632 Cost of goods sold Cr. 154 Work in process; or Cr. 627 Factory overhead cost Record the shortage or loss of inventory after deduction of the amount that was already after charged to the responsible person: Dr. 632 Cost of goods sold Cr. 152, 153, 156, 138 1381 , Record the expenses incurred from self built fixed assets that are greater than the normal level therefore should not be recorded into the historical cost of the assets: Dr. 632 Cost of goods sold Cr. 241 Construction in progress If enterprise constructed fixed asset itself enterprise Cr. 154 Work in process if enterprise produces fixed asset 3. Record provision or reverse for obsolete stock in the end of fiscal year provision in this year greater or lower than provision made in the last year . At the end of year, based on decrease of cost of inventory in the end of period, the accountant calculates provision for obsolete stock in this year. After that, the accountant must determine the difference of provision for obsolete stock in this year and provision made in the last year in order to provide addition or reverse the entry if any . In the case of provision for obsolete stock required in this year is greater than the one made in the last year which has not been used all: Dr. 632 Cost of goods sold Cr. 159 Provision for obsolete stock In the case of provision for obsolete stock required in this year is lower than the one made in the last year which has not been used all: Dr. 159 Provision for obsolete stock Cr. 632 Cost of goods sold 4. Transactions related to investment property:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Periodically, record depreciation of investment property of the enterprise: Dr. 632 Cost of goods sold details of expenses incurred for investment property Cr. 2147 - Amortization of investment property After the initial record, expenses incurred related to investment property that did not meet criteria to record into cost of investment property: Dr. 632 Cost of goods sold detail of expenses incurred for investment property , in the case of recording to expenses Dr. 242 Long term repaid expenses in the case of allocating Cr. 111, 112, 152, 153, 334, rty Expenses incurred related to investment property under operating lease the value is low : Dr. 632 Cost of goods sold details of expenses incurred for investment property Cr. 111, 112, 331, 334,... The accountant records cost of investment property and its amortization when sold or property liquidated: Dr. 214 - Accumulated depreciation and amortization 2147 - Amortization of investment amortization property Dr. 632 Cost of goods sold net book value of investment property Cr. 217 Investment property historical cost of investment property Expenses incurred from sale or liquidation of investment property: liquidation Dr. 632 Cost of goods sold detail of expenses incurred from investment property Dr. 133 VAT if any Cr. 111, 112, 331,... 5. In the case of issuance of finished goods for use: Dr. 632 Cost of goods sold Cr. 154 Work in process 6. Goods returned and transferred into the warehouse: Dr. 155, 156 Cr. 632 Cost of goods sold 7. Transfer cost of finished goods, goods, investment property sold in the period to the debit side of account 911 Income summary : Dr. 911 Income summary Cr. 632 Cost of good sold II. Where enterprise uses periodic inventory method 1. For trading enterprise: At the end of the period the entry to record cost of goods sold is:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC

Dr. 632 Cost of goods sold Cr. 611 Purchases At the end of the period, cost of goods sold must be transferred to account 911 summary , the entry is: Dr. 911 Income summary Cr. 632 Cost of goods sold 2. For the manufacturing and services enterprise: At the beginning period, transfer opening balance of finished goods to account 632 Cost of goods sold : Dr. 632 Cost of goods sold Cr. 155 Finished goods At the beginning period, transfer the opening balance of goods sent and services rendered but not yet sold: Dr. 632 Cost of goods sold Cr. 157 Goods on consignment Cost of finished goods that were transferred into the warehouse and services rendered: Dr. 632 Cost of goods sold Cr. 631 Cost of products manufacturing balance At the end of period, transfer the ending balance of inventory to the debit side of account 155 Finished goods : Dr. 155 Finished goods Cr. 632 Cost of goods sold At the end of the period, based on the amount not sold by sales agents: Dr. 157 Goods on consignment Cr. 632 Cost of goods sold At the end of the period, goods actually sold must be transferred to the income summary account: Dr. 911 Income summary Cr. 632 Cost of goods sold Income

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 635 FINANCIAL EXPENSES This account records the financial expenses including expenses or losses relating to financial activities, borrowings expenses, expenses for contribution in joint ventures, associates, losses from short term securities, expenses from securities dealings, etc., provision for decline in price of securities, losses from selling foreign currencies, losses from foreign exchange difference. Account 635 must be recorded in detail by the nature of expenses. The following expenses shall not be recorded to this account: Expenses for manufacturing goods and services; Selling expenses; General and administration expenses; Expenses for real state business; Construction expenses; Expenses that are covered by other resources; Other financial expenses.

STRUCTURE AND CONTENTS OF ACCOUNT 635 – FINANCIAL EXPENSES ACCOUNT Debit: Interest expenses of loans and borrowings, interest expenses for purchase in instalment method, interest expenses for financial lease of asset; Loss from selling foreign currencies; Payment discount for the purchaser; Losses due to liquidation or sales of investments; Losses of foreign exchange difference incurred during the course of business loss of realized foreign exchange difference ; Losses due to revaluation of monetary items in foreign currency incurred the course of business loss of unrealized foreign exchange difference ; Provision for decline in price of securities difference of provisions required in this year is greater than provision made in the prior year that has not been used up ; Transfer or allocation of foreign exchange difference in construction period loss of foreign exchange difference pre-operating period to financial expenses; Other financial expenses.
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC

Credit: Reverse of provision for decline in price of securities difference of provision required in this year lower than the provision made in the prior year that has not been used up yet ; At the end of the accounting period, transfer financial expenses incurred the period to determine the result of operation.

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Account 635 has no ending balance. MAJOR TRANSACTIONS 1. Where expenses relating to sales of securities: Dr. 635 Financial expenses Cr. 111, 112, 141,... 2. Where sales of shares in joint ventures, of investments in subsidiaries, in associates in which the selling price is lower than its cost a loss : Dr. 111, 112,... Selling price Dr. 635 Financial expenses loss Cr. 221 Investment in subsidiaries Cr. 222 Shares in joint ventures Cr. 223 Investment in associates. 3. When take back the contributions from jointly controlled entities, subsidiaries, associates which the value of received assets is lower than the contribution cost: Dr. 111, 112, 152, 156, 211,... Value of received asset Dr. 635 Financial expenses loss Cr. 221 Investment in subsidiary Cr. 222 Shares in joint ventures Cr. 223 Investment in associate 4. Expenses incurred involving in lending activities, foreign currency deals: Dr. 635 Financial expense Cr. 111, 112, 141,... 5. At the end of the period, if there is a decline in value of long term or short term investment, the provision for those investments shall be made. Where provision for short/long-term investment that must be made in this year is lower than provision for short/long-term investment made in the last year that have not been used all: Dr. 635 Financial expenses Cr. 129 Provision for short term investment Cr. 229 Provision for long term investment Where the provision for short/long-term investments must be made in this year is lower than provision for short/long-term investment made in the last year that have not been used all, the
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC reverse entry for the difference of provisions shall be made to reduce financial expenses: Dr. 229 Provision for long term investment Dr. 129 Provision for short term investment Cr. 635 Financial expenses 6. The payment discount given to customer because of payment made before due date upon agreement: Dr. 635 Financial expenses Cr. 131, 111, 112,... 7. Loss from selling foreign currency of business operation Dr. 111 1111 , 112 1121 selling exchange rate Dr. 635 Financial expenses loss if any Cr. 111 1112 , 112 1122 book exchange rate 8. In the case of the enterprise made payment to creditor on periodical basis: payment Dr. 635 Financial expenses Cr. 111, 112,... 9. In the case of the enterprise made advance for interest expenses to creditors: Dr. 142 Short term prepayment interest prepayment short term Dr. 242 Long term prepaid expenses interest prepayment long term Cr. 111, 112,... Periodically, allocate the amount already paid to the financial expenses: Dr. 635 Financial expense Cr. 142 Short term prepayment Cr. 242 Long term prepaid expenses nses 10. In the case, the interest expenses shall be paid later, periodically the accountant should calculate interest payable and record to the financial expenses: Dr. 635 Financial expenses Cr. 335 Trade payables At the end of loan period, the enterprise pays the principal and interest expenses: Dr. 341 Long term loan outstanding principal Dr. 335 Trade payables interest of the last period Dr. 635 Financial expenses interest of the last period Cr. 111, 112,... 11. Periodically, the entity pays the leasor for financial lease assets. When the entity receives invoice of the leasor: Dr. 635 Financial expenses interest paid by each period Cr. 111, 112 if paid in cash
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 315 - Current portion of long-term loan if not yet paid 12. When buying fixed asset in instalment method: Dr. 211, 213 cost of fixed asset recorded at price paid at sight Dr. 133 VAT deductible if any Dr. 242 Long term prepaid interest paid in instalment i.e. total amount paid minus cash sales price minus VAT deducted VAT Cr. 331 Trade payable total amount Periodically, post interest to financial expenses: Dr. 635 Financial expenses Cr. 242 Long term prepaid est 13. Periodically, when bond interest is paid, the entry is as follows: Dr. 635 Financial expenses Cr. 111, 112,... bond interest paid r periodically 14. If bond interest is paid later when bond is failed due , periodically the entity must determine loan interest that must be paid during the period in order to post those to financial expenses: period Dr. 635 Financial expenses Cr. 335 Accruals bond interest to be paid during the period When bond is failed due, the enterprise repays bond and bond interest for the bond holder: Dr. 335 Accruals bond interest Dr. 3431 Value of securities Cr. 111, 112,... 15. Periodically, allocate bond interest to financial expenses: Dr. 635 Financial expenses Cr. 242 Long term prepaid expenses details of bond interest allocated in the period 16. When expenses incurred from issuance of bond with low value that shall be posted to expenses: Dr. 635 Financial expenses Cr. 111, 112,... 17. When expenses incurred from issuance of bond with high value that shall be allocated: Dr. 242 Long term prepaid expenses detail of expenses for issued bond Cr. 111, 112, ... Periodically, allocate expenses incurred from issuance of bond: Dr. 635 Financial expenses amount of expenses allocated for the current period Cr. 242 Long term prepaid expenses detail of expenses for issued bond
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 18. In the case, enterprise issues bond with discount or surplus for fund raising used for operation, periodically the accountant calculates interest expenses to record expenses during the period: Dr. 635 Financial expenses Cr. 111, 112,... interest expenses periodically paid Cr. 242 Long term prepaid allocation of interest expenses prepaid Cr. 335 Accruals interest expenses must be paid If enterprise issues bonds with discount, periodically allocate discount to the financial expenses: Dr. 635 Financial expenses Cr. 3432 Bond discount bond discount allocated in the current period . If enterprise issues bonds with surplus, periodically allocate surplus to financial expenses: periodically Dr. 3433 Bond surplus Cr. 635 Financial expenses 19. For enterprise in operation stage, when buying goods and services in foreign currency, if the buying inter-bank average exchange rate or actual exchange is lower than the accounting one used in exchange accounts 111, 112: Dr. 151, 152, 153, 156, 157, 211, 213, 241, 623, 627, 641, 642, 133,... At inter-bank average 211, exchange rate or actual exchange rate Dr. 635 Financial expenses loss of difference of foreign exchange Cr. 111 1112 , 112 1122 at accounting exchange rate of account 111, 112 payables, 20. When payment of liabilities made trade payables, short-term loan, current portion of longterm loan, inter-company payables, long-term loans, long-term payable in the foreign payables currency, if the accounting rate of accounts payables are lower than the accounting one used in account 111, 112: 342,... Dr. 311, 315, 331, 336, 341, 342,... Accounting exchange rate Dr. 635 Financial expenses Loss of foreign exchange difference Cr. 111 1112 , 112 1122 Accounting exchange rate of accounts 111, 112 21. When collecting account receivable in foreign currency account receivables trade, intercompany receivables , in the case of the accounting rate of accounts receivable greater than the inter bank average exchange rate: Dr. 111 1112 , 112 1122 Inter-bank average exchange rate or actual rate Dr. 635 Financial expenses Loss of foreign exchange difference Cr. 131, 136, 138 Accounting rate of account 131, 136, 138 22. If there is difference of foreign exchange rate from revaluation of ending balance of cash account in foreign currency at the end of fiscal year, the accountant transfers all difference of exchange rate on above to financial expenses if account 4131 has debit balance to income summary. In the case of transferring loss of foreign exchange difference resulted from revaluation at the end of fiscal year to financial expenses:
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Dr. 635 Financial expenses loss of foreign exchange difference Cr. 413 Foreign exchange difference 4131 23. For start-up enterprise who is not in the course of production yet, when construction completed pre-operating , the accountant transfers debit balance of account 4132 if loss of foreign exchange difference incurred in construction period to financial expense or transfers to account 242 Long term prepaid expenses loss of foreign exchange difference to allocate in the maximum times of five years: Dr. 635 Financial expenses loss of foreign exchange difference Dr. 242 Long term prepaid loss of foreign exchange difference which is allocated over a period of time Cr. 413 Foreign exchange difference 4132 Periodically, allocate loss of foreign exchange difference incurred in construction operation stage : Dr. 635 Financial expenses loss of foreign exchange difference Cr. 242 Long term prepaid 24. When selling short term securities, long term securities in which sale price is lower than cost: securities Dr. 111, 112,... sale price Dr. 635 Financial expenses difference of cost of securities greater than original cost of securities Cr. 121, 228 25. At the end of the period, transfer all financial expenses incurred in the period to account 911 Income summary : Dr. 911 Income summary Cr. 635 Financial expenses

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 641 SELLING EXPENSES This account is used to reflect expenses incurred during the selling process or supporting services including expenses for selling and presentation of products, advertising expenses, commission, maintenance except for construction works , packaging, transportation. Account 641 should be maintained in detail by nature of expenses such as staff cost, materials, tools, packaging, depreciation, services rendered expenses, other sundry cash expenses. Based on the characteristics of the business and the management of the industry and the entity, the account 641 may have additional sub-accounts. At the end of the accounting period, the accountant transfers selling expenses to account 911 Income summary . STRUCTURE AND CONTENTS OF ACCOUNT 641 – SELLING EXPENSES NT Debit: Selling expenses incurred during the period. Credit: Transfer of selling expenses into account 911 Income summary . Account 641 has no ending balance. Account 641 – Selling expense has seven sub-accounts: Account 6411 – Office salaries: To record all payroll for sales staff, packing staff, delivery and maintenance staff, allowances, social insurance, health insurance, trade union fees, etc.. insurance, Account 6412 – Packaging and indirect materials: To record all expenses incurred for materials: packaging and materials used for maintaining and selling goods and services such as packing materials, expenses and materials for delivery, handling products in consumption process, delivery, and materials used for repair of fixed asset, etc., that are absorbed by the sales department. Account 6413 – Consumable and office supplies: To record expenses for tools and equipments used for consumption process such as measurement tool, calculators, working facilitators, etc. Account 6414 – Depreciation: To record depreciation expenses in maintenance and sales departments such as warehouse, showroom, docking yard, loading means, calculators, measurement tool, quality control machine. Account 6415 – Warranty expenses: To record goods warranty. The warranty for construction which is reflected in account 627 Factory overhead costs will be not recorded in this account. Account 6417 – Rendered services: To record all expenses bought for use in the selling process such as repairing assets, rentals fee for warehouse, yard, loading and unloading fees, transportation fees, commission fees for sales agents, consignees, etc. Account 6148 - Sundry cash expenses: To record other sundry cash expenses incurred during
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC the selling process besides the above-mentioned expenses accounts i.e. entertainment expenses in sales department, expense for presentation of products, advertising expenses, seminar. MAJOR TRANSACTIONS 1. Salary and allowances, allowances for meals in shifts, social insurance, health insurance, trade union fees payables to employees directly involving in selling process: Dr. 641 Selling expenses Cr. 334, 338,... 2. Materials and tools used in selling process: Dr. 641 Selling expenses Cr. 152, 153, 142, 242 3. Depreciation for fixed asset used in sales department: Dr. 641 Selling expenses Cr. 214 - Accumulated depreciation and amortization 4. Expenses for electricity, water, telephone, fax, etc.,, repair asset with low value that are directly charged to selling expenses: Dr. 641 Selling expenses Dr. 133 VAT deductible if any Cr. 111, 112, 141, 331,... 5. Where accruals for major repair of fixed asset are made: When accruals for major repair of fixed asset are made:

Dr. 641 Selling expenses Cr. 335 Accruals Record the actual expenses incurred for major repair of fixed asset:

Dr. 335 Accruals Cr. 331, 241, 111, 112, 152,... 6. For the major repair of fixed asset with high value incurred in one time involving in selling goods and services of several periods, the enterprise shall record this expense to account 242 Long term prepaid expenses : Periodically, allocate prepaid expenses into the period: Dr. 641 Selling expenses Cr. 242 Long term prepaid expenses 7. Record of warranty expenses not including warranty for construction work

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 7.1 The enterprise sells goods with the certificate of warranty guaranteed that any error made by the manufacturer detected in the warranty period must be fixed by the enterprise. The enterprise must determine the amount of maintenance expenses for the warranty. Where the provision for repairing of warranty products:

Dr. 641 Selling expenses Cr. 352 Provisions 7.2 At the end of the following period, the enterprise must determine the provisions for repairing of warranty goods: Where the provisions required in this period is greater than provision made in the prior period ovision that has not been used up, the additional provision shall be made for the difference.

Dr. 641 Selling expenses 6415 Cr. 352 Provisions Where the provision required in this period is lower than provision made in the prior period lower that is not used up, the reverse entry shall be made to reduce selling expenses: shall

Dr. 352 - Provisions Cr. 641 Selling expenses 6415 documents, 8. For goods used internally for selling process, based on related documents, the accountant records sales and the VAT payable. Where goods used internally for selling goods and services subject to Subtraction method VAT, the VAT amount shall not be recorded:

Dr. 641 - Selling expenses 6412, 6413, 6417, 6418 Cr. 512 Inter-company revenue manufacturing expenses or cost of goods internally used Where goods subject to subtraction method VAT internally used for the sales of goods and services not subject to VAT, the VAT payable fo goods internally used shall be recorded for to selling expenses.

Selling expenses 6412, 6413, 6417, 6418 Cr. 333 Tax and statutory obligations 3331 Cr. 512 Inter-company revenue manufacturing expenses or cost of goods internally used plus + VAT Dr. 641 9. Based on related documents to record the amount payable to the export consignee for consignment fee and for the payment on behalf involving to exported goods: Dr. 641 Selling expenses Dr. 133 VAT deductible if any Cr. 338 Other payables 3388 detail for each consignee 10. Commission fees must be paid to the sales agent: Dr. 641 Dr. 133 Selling expenses VAT deductible
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 131 Accounts receivable

11. If any reduction in selling expenses occurs, the entry is: Dr. 111, 112,... Cr. 641 Selling expenses 12. At the end of the period, transfer selling expenses incurred to account 911 summary . Dr. 911 Income summary Cr. 641 Selling expenses Income

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 642 GENERAL AND ADMINISTRATION EXPENSES This account records all general and administrative expenses including payroll for management and administration salary, wages, allowances , social insurance, health insurance, trades union fees, office supplies, indirect material for administration, depreciation, land rent, business tax, provision for doubtful debts, services rendered expenses utilities, telephone, fax, insurance for fixed asset or fires, etc. , other sundry expenses entertainment, customer events, etc. Account 642 has sub-accounts in order to keep detailed records of the nature of expenditures as the regulations. Depending on the regulatory demands of each industry and entity, account 642 may have additional sub-accounts. At the end of accounting period, general and administration expenses shall be transferred to account 911 Income summary . STRUCTURE AND ADMINISTRATION Debit: Actual general and administration expenses incurred; Provision for doubtful debts and other provisions difference of provisions required to provisions provide in this period higher than provisions made in the prior period that has been used up ; Provision for severance allowance. CONTENTS OF ACCOUNT 642 – GENERAL AND

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Credit: Reverse of provision for doubtful debts, other provisions difference of provisions in this provisions period lower than provisions made in the last period that has been not used up ; Reallocation of general and administration expenses to account 911 Income summary .

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Account 642 has no ending balance. Account 642 - General and administration expenses have eight sub- accounts: Account 6421-Office salary: To record payables to employees such as salaries, allowances, social insurance, health insurance, trade union fees of the Board of Directors, management and administrative staffs of the enterprise. Account 6422-Consumable and office supplies: To record consumable and office supplies that are used for administration such as stationary, materials used for repairing fixed assets, tools and supplies, etc. price including VAT or not including VAT . Account 6423-Office supplies: To record the cost of office supplies consumed for administration price including VAT or not including VAT .

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Account 6424 - Depreciation: To record general depreciation of the enterprise for assets such as buildings, fixtures, transportations and machinery and equipments which are used for administration. Account 6425 – Taxes, fees and charges: To record expenses such as business tax, land rent, etc., and other fees and charges. Account 6426 – Provision: To record the provision for doubtful debts and other provisions which are charged to production cost. Account 6427 – Services rendered by outsiders: To record services rendered by outsider for administration, for using technical documents, patent, etc., not meet recognition criteria of tangible asset that then are allocated to general and administration expense, assets lease, payable to sub-contractor. : Account 6428 – Sundry cash expenses: To record other general and administrative expenses r of enterprise such as expenses for conferences, entertainment, per diem, travelling, woman employees, etc.

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MAJOR TRANSACTIONS insurance, 1. Salary, wages, allowance, social insurance, health insurance, trade union fees to administration staff: Dr. 642 General and administration expenses 6421 Cr. 334, 338 2. Raw materials is used for administration such as gas, oil, lubricants for driving car, material for repairing fixed assets: Dr. 642 General and administration expenses 6422 Dr. 133 VAT deductible if be deducted 1331 Cr. 152 Raw material Cr. 111, 112, 142, 242, 331,... 3. Tools and office supplies used or purchased then put in use not through the company s premise that are recorded one time to general and administration expenses: Dr. 642 General and administration expenses 6423 Dr. 133 VAT deductible if any Cr. 153 Tools and supplies Cr. 111, 112, 331,... 4. Depreciation for asset which is used for administration such as building, warehouse, fixtures, and transmitter devices: Dr. 642 General and administration expenses 6424 Cr. 214 Accumulated depreciation and amortization 5. Business tax, land tax, etc., payable to the State: Dr. 642 General and administration expenses 6425 Cr. 333 Tax and statutory obligations.
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6. Transportation fees, bridge tolls, and ferry charges: Dr. 642 General and administration expenses 6425 Cr. 111, 112, 7. Provision for doubtful debts charged into production and business expenses in the period: Dr. 642 General and administration expenses 6426 Cr. 139 Provision for doubtful debts 8. Telephone, utilities, repair expense spent one time for fixed asset with low value. Dr. 642 General and administration expenses 6427 Dr. 133 VAT deductible if any Cr. 111, 112, 331, 335,... 9. Expenses for conference, entertainment, woman employees, research and training, member woman fees and other fees: Dr. 642 General and administration expenses 6428 Dr. 133 VAT deductible deducted amount Cr. 111, 112, 331, 335,... 10. Periodically, the amount payable to the holding company for management fund at the holding company: Dr. 642 General and administration expenses Cr. 336 Inter-company payables Cr. 111, 112 if payment to the holding company in cash 11. The VAT input not deducted and recorded to the general and administration expenses: Dr. 642 General and administration expenses Cr. 133 VAT deductible 1331, 1332 12. Provision for severance allowance: Dr. 642 General and administration expenses Cr. 351 Provision for severance allowance 13. Products, goods subject to subtraction method VAT that is internally used for administration: If products, goods used for production and business of goods and services subject to Subtraction method VAT, shall not be charged VAT:

Dr. 642 General and administration expenses 6422, 6423, 6427, 6428 Cr. 512 Inter-company revenue manufacturing cost or cost of goods internally used If products, goods used internally for production of goods and services not subject to VAT or subject to VAT in direct method, the amount of VAT of products, goods internally used will be recorded to general and administration expenses:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 642 General and administration expenses 6422, 6423, 6427, 6428 Cr. 333 Tax and statutory obligations Cr. 512 Inter-company revenue manufacturing cost or cost of goods internally used 14. Reverse of difference of lower provision for doubtful debts required in the current period and provisions made in the prior period that have not been not used up: Dr. 139 Provision for doubtful debts Cr. 642 General and administration expenses 6426 15. Provision for restructuring, provisions for contracts with high risk and other provisions not including provision for warranty products Dr. 642 General and administration expenses Cr. 352 Provisions interim, At the balance sheet date of year end or interim, the provisions for restructuring, provisions for contracts with high risk and other provisions must be made. Where provisions required in the current period is greater than provision made in the prior period that has not been used up yet:

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Dr. 642 General and administration expenses Cr. 352 Provisions. + Where provision required in the current period is lower than provision made in the prior period that has not been used up yet:

Dr. 352 Provisions Cr. 642 General and administration expenses 16. A reduction in expenses occurs: Dr. 111, 112,... Cr. 642 General and administration expenses expen 17. At the end, general and administration expenses shall be transferred to account 911 to determine income summary of the period: Dr. 911 Income summary Cr. 642 General and administration expenses

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC CATEGORY 7 OTHER INCOME This account is used to reflect incomes other than sale income. And it is only used to reflect other incomes incurred during of the period. At the end of the period, all other incomes will be transferred to account 911 Income summary . This account has no ending balance. This category has only one account: Account 711: Other income

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 711 OTHER INCOME This account is used to reflect incomes other than sale income of enterprise. It includes: Proceed of disposal of fixed asset; Income from the revaluation materials, goods and fixed asset that are used to contribute or invest into associates or other long-term investment; Income from the contract violations by the customers; Collection of the bad debts that were already written off; Tax refund from the State Budget; Amounts unidentifiable as to whom they are payable; Sales-related tips or awards if any offered by customers which are not included in sales; Gifts or donations in cash or in kind by organizations and individuals; Other incomes.

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STRUCTURE AND CONTENTS OF ACCOUNT 711 – OTHER INCOME Debit: VAT payables for other income in direct method if any applied for the entity paying VAT in direct method; Transfer all other incomes to account 911 Income summary at the end of the year.

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Credit: - Other income incurred during of the year. Account 711 has no ending balance. MAJOR TRANSACTIONS 1. Accounting for proceeds from sale and liquidation of fixed assets: 1.1. Proceeds from sale and liquidation of fixed assets: + For the entity paying VAT in the subtraction method: Dr. 111, 112, 131 total amount Cr. 711 - Other income excluding VAT Cr. 3331 - VAT 33311 + For the entity paying VAT in the direct method:
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Dr. 111, 112, 131 total amount Cr. 711 - Other income total amount 1.2. Expenses from disposal and liquidation of fixed assets: Dr. 811 - Other expenses Dr. 133 - VAT if any Cr. 111, 112, 141, 331 total amount At the same time, write off the historical cost of fixed assets being sold, liquidated: Dr. 214 - Accumulated depreciation of fixed assets depreciated value Dr. 811 - Other expenses net book value Cr. 211 - Tangible assets historical cost Cr. 213 - Intangible assets historical cost 2. Accounting for other income from revaluation of materials, goods and fixed assets used to contribute and invest to associates: - Materials, goods are used to contribute to associates should be revalued in agreement between associates the investors and associates. In the case, the revalued cost of materials, goods and fixed asset revalued is greater than the book value, the accountant shall record: Dr. 223 - Investment in associates revalued amount Cr. 152, 153, 155, 156 book value Cr. 711 - Other income difference between the revalued amount of materials, goods and the book revalued value - In the case of contribution for associates in fixed assets, the assets should be revalued in agreement between investors and associates. Where revalued cost of fixed assets is greater Where e than their book value, the accountant should record: Dr. 223 - Investment in associates revalued amount Dr. 214 - Accumulated depreciation Cr. 2111, 213 cost Cr. 711 - Other income difference from the cost of fixed asset that is greater than their book value 3. Recording other income from investment in jointly controlled entities: Where the investment in jointly controlled entities is made by materials, goods and cost of materials, goods is greater than their book value, the accounting entry should be recorded as follows: Dr. 222 Shares in joint venture revalued amount Cr. 152, 153, 155, 156, 611 book value Cr. 3387 - Deferred income Differences of the higher revalued amount and the book value in correspondence with benefit of the enterprise in joint venture differences from revaluation of materials, goods contributed in jointly controlled entities by details Cr. 711 - Other income differences of higher revalued amount and book value in correspondence with benefit of other parties in joint venture
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC When the jointly controlled entities sell materials, goods to the third party, deferred income should be transferred to the other income in the period: Dr. 3387 - Deferred income Cr. 711 - Other income Where the investment in jointly controlled entities is made by fixed assets and the revalued amount is greater than the net book value, the accounting entry should be recorded as follows: Dr. 222 Joint venture capital Dr. 214 - Depreciation Accumulated depreciation fixed asset Cr. 3387 - Deferred income differences of the higher revalued amount and net book value that should be deferred in correspondence with benefit of the enterprise in joint venture Cr. 711 - Other income Differences of higher revalued amount and net book value in higher correspondence with benefit of other parties in joint venture Cr. 211 - Tangible assets Cost Cr. 213 - Intangible fixed assets Cost - Annually, the accountant should allocate deferred income in other income in the period based on useful life of fixed assets used by jointly controlled entities: Dr. 3387 - Deferred income difference from revaluation of fixed asset contributed Cr. 711 - Other income deferred income that is allocated for one year - When joint venture contract is finished or investors have transferred the shares to other parties, investors the accountant should transfer difference resulted from the revaluation of fixed assets which resulted has not been allocated to other income. The accounting entry should be recorded: Dr. 3387 - Deferred income the difference from revaluation of fixed asset Cr. 711 - Other income 4. Recording other income from the selling fixed asset to jointly controlled entities Selling fixed asset to jointly controlled entities, the accountant should writte off fixed asset: Dr. 811 - Other income net book value Dr. 214 Accumulated depreciation of fixed asset Cr. 211, 214 cost of fixed asset At the same time recording other income from the sales to jointly controlled entities: Dr. 111, 112, 131 Cr. 711 Other income Cr. 333 - Taxes and statutory liabilities 33311 - At the end of the period, investors should record gains from sale of fixed assets in correspondence with benefit of the enterprise in jointly controlled entities basing on fixed assets which investors sold those assets used by jointly controlled entities not sold to third party . The accounting entry should be recorded as follows: Dr. 711 Other income Deferred interests from sale of fixed assets in correspondence with
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC benefit of investor shares in jointly controlled entities Cr. 3387 Deferred income - Periodically, investor should allocate deferred income in correspondence with its benefit in jointly controlled entities basing on useful life of fixed assets. The accounting entry should be recorded: Dr. 3387 Deferred income Cr. 711- Other income - When jointly controlled entity sells fixed assets, which are bought from investors, to the third party, the jointly controlled entity should record: Dr. 3387 Deferred income unallocated amount in correspondence with its benefit in the jointly controlled entity Cr. 711- Other income 5. Recording other income from contribution of fixed asset to other entity which holds only 20 % vote right. - In the case of contribution made by materials, goods, those assets should be revalued according materials, to the agreement between investor and entity. If the revalued amount of the asset is greater than its book value, the accounting entry should be recorded as follows: Dr. 228 - Other long term investment revalued amount Cr. 152, 153, 155, 156 book value Cr. 711 - Other income difference from the higher revalued amount and book value of the materials, goods - In the case of contribution made by fixed assets, those assets should be revalued according to assets, the agreement between investor and the entity. If its revalued amount is greater than its net book value, the accounting entry should be recorded: Dr. 228 - Other long term investment revalued amount Dr. 214 - Depreciation Accumulated depreciation of fixed asset Cr. 211, 213 Historical cost of fixed asset Cr. 711 - Other income difference of the hi higher revalued amount and net book value of fixed asset 6. Recording other income from sale and leasing back of fixed assets under finance lease: - In the case, the fixed assets are sold and leased back and their revalued amount is greater than their net book value, the accounting entry should be recorded as follows: Dr. 111, 112, 131 total amount Cr. 711- Other income net book value of fixed asset sold and leased back Cr. 3387 - Deferred income difference of higher sale price and net book value Cr. 3331 - VAT At the same time, write off fixed asset: Dr. 811 - Other expenses Net book value of fixed asset sold or leased back Dr. 214 Accumulated depreciation and amortization if any
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 211 - Tangible asset historical cost - In the case, the fixed assets are sold and leased back and their revalued amount is lower than their net book value, the accounting entry should be recorded as follows: Dr. 111, 112, 131 Total amount Cr. 711- Other income sale price Cr. 3331- VAT if any At the same time, write off fixed asset: Dr. 811 - Other expenses sale price Dr. 242 - Long term prepayment difference of lower sale price and net book value Dr. 214 - Depreciation if any Cr. 211 - Tangible asset historical cost Entries for recording leased asset and payable for finance lease, lease payment should be payable ce performed according to guidance in account 212 Finance lease 7. Recording other income from sale and leasing back of fixed assets under operating lease: When selling and leasing back asset under operating lease, the practice will be as follows: operating - If selling price is agreed as reasonable, the loss or profit should be recorded into other income in the period: Dr. 111, 112, 131 Cr. 711 - Other income sale price Cr. 3331 - VAT if any At the same time, the accountant should write off fixed asset as similar to point 6 above - If selling price and leased-back price is less than reasonable one and leased-back price is less than market price, the loss should be suitably allocated in relation to lease payment during suitably lease period. The accountant should record income from sale of fixed assets based on the income invoice and relevant documents as follows: Dr. 111, 112 Cr. 711- Other income sale price Cr. 3331- VAT payable if any At the same time, the accountant should write off the fixed asset as similar to point 6 above. - If selling price and leased-back price is higher than reasonable value, the difference between sale or lease price and reasonable value should be allocated during estimated useful life of fixed assets. The difference between reasonable value and net book value will be recorded as other income in the period. + Based on the VAT invoice of sale of fixed assets, the accounting entry should be recorded as follows: Dr. 111, 112, 131 Cr. 711 - Other income reasonable value of
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 3387 - Deferred income difference between sale price and reasonable price Cr. 3331 - VAT payable if any At the same time, write off fixed assets sold and re-leased as similar to point 6 above . + Periodically, the difference of higher selling price and reasonable one of fixed assets which were sold or re-leased should be allocated in production costs in relation to lease amount in estimated useful life of these assets. Dr. 3387- Deferred income Cr. 623, 627, 641, 642 8. When the warranty period in construction contract is due, however the assets don t have to be warranted or provision for warranty of the contract is higher than actually expense incurred, accoun the unused provision should be reversed. The accounting entry should be recorded as follows: Dr. 352 - Provision Cr. 711 - Other income 9. Recording other income from violation of contract of customers: - Record receipts from violation of contract of customers: Dr. 111, 112 Cr. 711 - Other income - Where the depositor breaks the contract that was signed, it has to pay the penalty as agreed in the contract. + Record the penalty deducted in deposits, collaterals: Dr. 338 - Other payable short term deposits, collaterals Dr. 344 - Long-term deposits, collaterals long-term deposits, collaterals Cr. 711 - Other income + Record payment of deposits, collaterals: Dr. 338, 344 subtracted penalty amount if any Cr. 111, 112 10. Recording other income from compensation of insurance institutions: Dr. 111, 112 Cr. 711 - Other income - Expenses relating to solving damages of which insurance was covered: Dr. 811 - Other expenses Dr. 133 - VAT deductible if any Cr. 111, 112, 152 11. Recording collection from the doubtful debts written off:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC - If it is unlikely to collect some doubtful debts, they should be written off based on settled bad debts request: Dr. 139 - Provision for doubtful debt if provision already made Dr. 642 - General and administration expenses if provision not yet made Cr. 131 Trade receivable At the same time, the accountant should credit account 004 Doubtful debts written off balance accounts in order to follow up those debts. - Record collection of doubtful debts written off: Dr. 111, 112 Cr. 711- Other income At the same time, credit account 004 accounts . Doubtful debts written off Doubtful Off balance sheet Off

12. Amount payable by the company, where the company does not know who the creditor is and therefore the amount will not be paid: Dr. 331 - Trade payable Dr. 338 - Other payable Cr. 711 - Other income 13. Recording reduction of VAT payables - To record VAT reduced against VAT payables: Dr. 3331- VAT payable Cr. 711 - Other income - To record the VAT reduced that is refunded in cash by the State Budget: Dr. 111, 112 Cr. 711- Other income 14. Recording refund of import, export tax and special consumption tax: Dr. 111, 112 Cr. 711- Other income 15. Recording sales-related tips or awards in goods or assets if any offered by customers: Dr. 152, 156, 211 Cr. 711- Other income 16. At the end of the year, the accountant should calculate and record VAT payable in direct method: Dr. 711- Other income Cr. 3331- VAT payable
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 17. At the end of the year, other income arisen should be transferred to account 911 Income Summary , the accounting entry should be recorded: Dr. 711- Other income Cr. 911- Income summary

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC CATEGORY 8 OTHER EXPENSES This account is used to reflect expenses arising from other activities which differ from the activities generating sales of the business entity. Other expenses are the expenses or losses incurred from separate events or transactions which are different from the normal activities of the enterprise. This account is only used to record other expenses incurred during the period. At the end of the period, it should be transferred to account 911 Income summary . This account doesn t have ending balance. Category 8 – Other expenses has two sub-accounts: Account 811- Other expenses Account 812 - Enterprise income tax expense

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 811 OTHER EXPENSES This account is used to reflect expenses incurred from separate events or activities other without normal activities of an enterprise. Other expenses include: Expenses from disposal and liquidation of fixed assets and net book value of those assets is any ; Losses from revaluation of materials, goods and fixed asset which are contributed in joint ventures, in associates, and other long term investments; Compensation for breaches of contracts; Tax penalty; Other expenses.

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STRUCTURE AND CONTENTS OF ACCOUNT 811 – OTHER EXPENSES ACCOUNT Debit: Other expense incurred during the period. Credit: At the end of the period, transfer other expenses incurred during the period to account 911 expenses Income summary. Account 811 has no ending balance. MAJOR TRANSACTIONS 1. Recording transactions of disposal and liquidation of fixed assets: To record proceeds from disposal and liquidation of fixed asset: Dr. 111, 112, 131 Cr. 711- Other income Cr. 3331- VAT payable 33311 if any - To write off fixed assets which were sold and liquidated: Dr. 214- Accumulated depreciation and amortization of fixed assets Dr. 811- Other expenses net book value Cr. 211- Tangible assets historical cost Cr. 213- Intangible assets historical cost To record expenses incurred from disposal, liquidation of fixed assets:

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 133 - Deductible VAT 1331 if any Cr. 111, 112, 141 2. Accounting for other expenses incurred after revaluation of materials, goods and fixed assets contributed in associates: Contribution made by goods and merchandise: when investment in associates is made by goods and merchandise and the revalued amount agreed between investors and associates is less than their book value, the accounting entry should be recorded as follows: Dr. 223 - Investment in associates revalued amount Dr. 811 - Other expenses difference of higher revalued amount and book value of goods and merchandise Cr. 152, 153, 156, 611 Book value Contribution made by fixed assets: when investment in associates is made by fixed assets, and the revalued amount is less than the net book value of this fixed asset, the accounting entry should be recorded as follows: Dr. 223 - Investment in associates revalued amount Dr. 214 - Accumulated depreciation and amortisation of fixed assets Dr. 811 - Other expenses difference of the revalued amount and higher net book value difference Cr. 211, 213 - Historical cost 3. Accounting for transactions relating to contribution in jointly controlled entities: contribution 3.1. When contribution in jointly controlled entities is made by goods and merchandise and book entities value of those goods is higher than revalued amount, the accounting entry should be recorded as follows: Dr. 222- Share in joint ventures revalued amount Dr. 811- Other expenses difference of greater revalued amount and book value difference Cr. 152, 153, 155, 15, 611 book value 3.2. When contribution in jointly controlled entities is made by fixed assets and the revalued amount is less than net book value of this asset, the accounting entry should be recorded: Dr. 222- Share in joint ventures revalued amount Dr. 214- Accumulated depreciation and amortization of fixed assets Dr. 811- Other expenses difference of revalued amount and higher net book value Cr. 211- Tangible asset Historical cost Cr. 213- Intangible asset Historical cost 4. Accounting for contribution made by goods, merchandise and fixed asset to other entity for holding 20 % vote right. Where contribution is made by goods and merchandise and the revalued amount that is agreed among investors is less than book value of these assets, the accounting entry should be recorded: Dr. 228- Other long term investment revalued amount Dr. 811- Other expenses difference of revalued amount and higher book value Cr. 152, 153, 156 book value
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- Where contribution is made by fixed assets and if the revalued amount which is agreed among investors is greater than the net book value of this asset, the accounting entry should be recorded as follows: Dr. 228- Other long-term investment revalued amount Dr. 214- Accumulated depreciation and amortisation of fixed assets Dr. 811- Other expenses difference of revalued amount and higher net book value Cr. 211, 213 Historical cost 5. Recording penalty from breaches of contract, tax penalty,: Dr. 811 - Other expenses Cr. 111, 112 Cr. 333 Taxes and statutory obligations Cr. 338 - Other payables 6. Posting other expenses to the income summary: Dr. 911- Income summary Cr. 811- Other expenses

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 821 ENTERPRISE INCOME TAX EXPENSES This account is used to reflect enterprise income tax expense including: current income tax expense and deferred income tax expense incurred during the year. It is the basis to determine business results of the enterprise in the current fiscal year. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Enterprise income tax expense recorded in this account includes: current income tax and deferred income tax. It is recorded into this account when determining profit or losses of a fiscal year. : 2. Current income tax expense: is the amount of income tax paya payable which is calculated basing on taxable income in year and rate of current income tax. : 3. Deferred income tax expense: is the amount of income tax pa payable in future which incurred from: Recording deferred income tax payable in the year; Refunding deferred tax asset recorded sine previous years. 4. Income from deferred income tax: is the deduction of deferred income tax expense that is tax: resulted from: Recording deferred income tax asset in the year; Reversal of deferred income tax payable recorded in previous years. STRUCTURE AND CONTENTS OF ACCOUNT 821 “ENTERPRISE INCOME TAX” Debit: Current income tax incurred during the year; If immaterial errors relating to current income tax of previous years are discovered, the current enterprise should record addition of current income tax in the current year; Deferred income tax incurred during the year from recording deferred tax payable the difference of the greater deferred income tax payable incurred and deferred income tax payable reversed in the year ; Recording deferred income tax expense difference of higher deferred income tax asset reversed and deferred tax asset incurred during the year ; Transferring the difference of higher credit incurred and debit incurred in account 8212 Deferred income tax in the period to account 911 Income summary .

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Credit: Current income tax payable in the year which is less than temporary income tax paid, should be deducted in current income tax expense which is alreadyrecorded in the year; If immaterial errors relating to income tax payable are discovered, the enterprise should record a decrease in current income tax expense; Decrease of deferred income tax and increase of deferred income asset the difference of greater deferred income tax asset incurred in the year and deferred income tax assets reversed in the year ; Decrease of deferred income tax expense the difference of the greater deferred tax payable reversed and deferred tax payable incurred in the year ; Transfer of the difference between of greater current income tax incurred during the year and the deducted current income tax expense in the year into account 911 Income summary ; incurred Transfer of the positive difference of incurred debit and incurred credit of account 8212 Deferred income tax into debit side of account 911 Income summary .

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Account 821 – Enterprise income tax has no ending balance. Account 821 – Enterprise income tax has two sub-accounts: Account 8211 Account 8212 Current income tax Deferred income tax

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 8211 CURRENT INCOME TAX This account is used to reflect current income tax of an enterprise incurred in the year. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. Each quarter, based on the tax declaration, the accountant records estimated current income tax into current income tax expense. 2. At the end of fiscal year, if the estimated income tax is less than the actual current income tax to be paid, the accountant should record additional tax into current income tax expense. In the case, estimated income tax is higher than the actua income tax to be paid for this year, the actual accountant should decrease the current income ta expense by the difference between the tax estimated income tax and the actual income tax payable. 3. If the entity detects immaterial errors relating to income tax payables of previous year, the enterprise should record an increase or decrease of income tax payables of previous years in current income tax of the current year. 4. At the end of the fiscal year, the accountant should transfer current income tax incurred in the should year to account 911 Income summary to determine profit made from business and production activities in the year. STRUCTURE AND CONTENTS OF ACCOUNT 8211 – CURRENT INCOME TAX ACCOUNT EXPENSE Debit: Income tax payable recorded in current income tax incurred in the year; current If immaterial errors relating to current income tax payable of previous years are discovered, the additional tax payable should be recorded into current income tax expense of the current into year.

Credit: If the actual income tax payable in the year is less than estimated income tax, the difference will be recorded in current income tax of the current year; If immaterial errors relating to income tax payable are discovered, the entity should record a decrease in current income tax expense of the current year; Transferring current income tax into debit of account 911 Income summary .

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Account 8211 – Current income tax has no ending balance.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 8212 DEFERRED INCOME TAX EXPENSE This account is used to reflect deferred income tax incurred during the period. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. At the end of the fiscal year, the accountant must determine deferred income tax payable in order to record into deferred income tax expenses. At the same time, the accountant also determines deferred income tax asset in order to record into income a decrease in deferred income tax expense . 2. The accountant should not record into this account deferred income tax asset and deferred income tax payable which are incurred from the tr transactions that are directly recorded into paid-in capital. 3. At the end of the period, the accountant must transfer the difference between the incurred debit and credit of account 8212 Deferred income tax into account 911 Income summary . income STRUCTURE AND CONTENTS OF ACCOUNT 8212 “DEFERRED INCOME TAX ACCOUNT EXPENSE Debit: Deferred income tax incurred during the year from recording deferred income tax payable the difference of higher deferred income tax payable incurred in the year and deferred tax income tax refunded in the year . Reverse of deferred income tax asset which was recorded in previous years the difference of recorded higher deferred income tax asset refunded in the year and deferred income tax asset incurred in the year ; Transferring the positive difference of credit incurred and debit incurred in account 8212 Deferred income tax to credit side of account 911 Income summary . side

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Credit: Decreasing deferred income tax expense difference of the higher deferred income tax asset incurred in the year and deferred income tax refunded in the year ; Decreasing deferred income tax expense difference of higher reversed deferred income tax expense in the year and deferred income tax payable in the year ; Transferring the difference of lower credit incurred and higher debit incurred in account 8212 deferred income tax into account 911 Income summary .

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Account 8212 – Deferred income tax has no ending balance. I. Method for recording major transactions relevant with the current income tax expense

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 1. Each quarter, when the accountant determines income tax payable according to the law on enterprise income tax, the accountant should record estimated income tax payable to the State Budget into current income tax expense. The accounting entry should be recorded as follows: Dr. 8211- Current income tax Cr. 3334- Enterprise income tax When income tax is paid to the State Budget by an enterprise, the following entry should be recorded: Dr. 3334- Enterprise income tax Cr. 111, 112 2. At the end of the fiscal year, basing on the income tax payable according to the income tax declaration or the amount of tax announced by the tax agency: If the actual income tax payable in the year is higher than the income tax previously paid, the accountant must record the additional income tax payable. The accounting entry should be recorded as follows: Dr. 8211- Current income tax Cr. 3334- Enterprise income tax When enterprise income tax is paid to the State Budget, the following entry should be recorded: Dr. 3334- Enterprise income tax Cr. 111, 112 If the actual income tax payable in the year is less than the estimated income tax, the accountant should record a decrease in current income tax. The accounting entry should be recorded as follows: Dr. 3334- Enterprise income tax Cr. 8211- Current income tax 3. If an enterprise detects immaterial errors incurred in the previous years that are related to incurre enterprise income tax payable of previous years, the enterprise will be allowed to record increasing income tax payable of previous years into the current income tax in this year. In the case, an enterprise detects immaterial errors of previous years relating to current income tax, the additional current income tax of previous years should be recorded increasing current income tax of the current year. The accounting entry should be recorded as follows: Dr. 8211- Current income tax Cr. 3334- Enterprise income tax When the enterprise pays enterprise income tax, the following entry should be recorded: Dr. 3334- Enterprise income tax Cr. 8211- Current income tax

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC 4. At the end of the accounting period, transferring current income tax, the accounting entry should be recorded as follows: If the incurred debit of account 8211 is higher than the incurred credit of account 8211, the difference should be recorded as follows: Dr. 911- Income summary Cr. 8211- Current income tax If the incurred debit of account 8211 is less than the incurred credit of this account, the difference should be recorded as follows: Dr. 8212- Current income tax Cr. 911- Income summary II. Method for recording major transactions that are relevant with deferred income tax that expense 1. Deferred income tax expense incurred in the year from recording deferred tax payable it is year the difference between deferred tax payable incurred in the year greater than deferred income tax tax payable refunded in this year : Dr. 8212- Deferred income tax Cr. 347- Deferred tax payable 2. Deferred income tax expense incurred in the year from refunding deferred tax asset which recorded since previous years it is the difference between deferred tax asset refunded in the difference year greater than deferred tax asset incurred in the year , the accounting entry should be recorded: Dr. 8212- Deferred income tax Cr. 243- Deferred tax asset 3. Decreasing deferred income tax expense the difference between deferred tax asset incurred in the year greater than deferred tax asset refunded in this year , the accounting entry should refunded be recorded as follows: Dr. 243- Deferred tax asset Cr. 8212- Deferred income tax 4. Decreasing deferred income tax the difference between deferred tax payable refunded in the year greater than deferred tax payable incurred in the year : Dr. 347- Deferred tax payable Cr. 8212- Deferred income tax 5. At the end of the accounting period, transferring the difference between the incurred debit and the incurred credit of account 8212 Deferred income tax : If the incurred debit is greater than the incurred credit of account 8212, the difference is recorded as follows: Dr. 911- Income summary
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Cr. 8212- Deferred income tax If the incurred debit is less than the incurred credit of account 8212, the difference should be recorded: Dr. 8212- Deferred income tax Cr. 911- Income summary

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC CATEGORY 9 INCOME SUMMARY ACCOUNT 911 INCOME SUMMARY This account is used to determine and record the result of the enterprise s business operation and other activities in the accounting year. The result of the enterprise s business operation includes production result, trading, financial result and other activities. 1. The production and business results is the difference between net sale and cost of goods sold finished goods, merchandises, property investment and services, cost of construction products, ty cost related to trading of property investment, such as depreciation cost, repair and upgraded cost, on, operating lease paid by the lesson, liquidation cost of property investment , selling expenses, general and administration expenses. 2. Financial result is the difference of financial income and financial expense. 3. Other result is the difference of other income and other expenses and enterprise income tax. THIS ACCOUNT MUST COMPLY WITH THE FOLLOWING REGULATIONS 1. This account should accurately and fully record the results from the enterprise s business operation enterprise in compliance with the current financial system. 2. The results from the enterprise s business operation must be maintained in detail for each operation production, processing activity, trading, service provision, and financial activit . The individual and activity, activity product or service should be recorded in a sub-account, if necessary. recorded sub-account, 3. The sales and income recorded in this account should be the net sales and the net income. STRUCTURE AND CONTENTS OF ACCOUNT 911 – INCOME SUMMARY Debit: rchandises, Cost of finished goods, merchandises, property invest investment and services rendered; Financial expenses, enterprise income tax and other expenses; Selling expenses and general and administration expenses; Transferred profit.

Credit: Net sales of finished goods, merchandises, property investment and services sold in the period; Financial income, other income and reduction of enterprise income tax; Transferred loss.
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Account 911 does not have a closing balance. 1. At the end of the period, net sales should be transferred into Income summary account: Dr. 511 Sales Dr. 512 Inter-company sales Cr. 911 Income summary 2. Cost of finished goods, merchandises, services sold in the period, expenses related to trading of property investment, such as depreciation, repair and upgrading cost, operating lease cost and cost resulted from liquidation of property investment: Dr. 911 Income summary Cr. 632 Cost of goods sold 3. At the end of the period, financial income and other income should be transferred: Dr. 515 Financial income Dr. 711 Other income Cr. 911 Income summary 4. At the end of the period, financial expenses and other expenses should be transferred: expenses Dr. 911 Income summary Cr. 635 Financial expenses Cr. 811 Other expenses 5. At the end of the period, current income tax should be transferred to income summary: tax Dr. 911 Income summary Cr. 8211 Current income tax 6. At the end of the period, the difference between the arisen amount in the debit and the arisen amount in the credit of account 8212 Deferred income tax is transferred: + Should the debit of account 8212 is greater than its credit, the difference is recorded as follows: Dr. 911 Income summary Cr. 8212 Deferred income tax + Should the debit of account 8212 is less than its credit, the difference is recorded as follows: Dr. 8212 Deferred income tax Cr. 911 Income summary 7. At the end of the period, selling expenses should be transferred to income summary: Dr. 911 Income summary Cr. 641 Selling expenses 8. At the end of the period, general and administration expenses should be transferred to income summary:
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MINISTRY OF FINANCE Decision 15/2006/QD-BTC Dr. 911 Income summary Cr. 642 General and administration expenses 9. Calculating and posting the profit made during the period: Dr. 911 Income summary Cr. 421 Undistributed earnings 10. Accounting for the loss: Dr. 421 Undistributed earnings Cr. 911 Income summary ncial entri Where the entity prepares interim financial statement quarterly , entries from 1 to 10 is recorded for the quarterly accounting period.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC CATEGORY 0 OFF BALANCE SHEET ACCOUNTS Off balance sheet accounts are used to record assets kept by the enterprise which are not their property such as: operating lease assets; goods held under trust or for processing; goods received on consignment for sale, deposit and collateral. At the same time, these accounts also include several economic transactions already recorded in the accounts of the balance sheet, but which are to be separately followed up for management purpose, e.g. settled bad debts, budget funds, foreign currency detailed for each original currency , subsidies. In principle, these accounts are recorded as s single entry which means that any transaction recorded on one of these accounts should not be corresponded for on another account. b The value of assets, materials and cash recorded in these accounts is based on the contractual cost or the cost stipulated in receipts, invoices or other supporting documents. The value of leased assets from outside is recorded at the cost of these assets stipulated in the leasing contract. All assets, raw materials, and goods recorded in the off balance sheet accounts should be maintained the and controlled. Category 0 – Off balance sheet accounts includes six accounts: Account 001 Operating lease asset Account 002 Goods held under trust or for processing Account 003 Received on consignment for sale Account 004 Bad debts written off Account 007 Foreign currencies Account 008 Subsidies of State Budget

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 001 OPERATING LEASE ASSETS This account is used to record value of all assets including fixed assets, property investment and tools and instruments leased by the enterprise from other entities. STRUCTURE AND CONTENTS OF ACCOUNT 001 – OPERATING LEASE ASSETS Debit: Value of lease assets increased. Credit: Value of lease assets decreased. Debit balance: Value of lease assets is currently being leased. This account is used to record the value of lease assets under operating lease agreement the leased assets should be returned to the lessor at the termination of the leasing contract . This account is not used to record financial lease assets. Accounting for operating lease assets must be maintained in detail for each lessor individuals or detail organizations and each type of asset. A receipt note should be prepared and signed by the lessee and lessor when the lease is undertaken. It is responsibility of the lessee to safeguard and reasonably use responsibility the leased assets. Should any supplementary equipment be installed or a change made with respect to supplementary the leased assets nature and technical function, the lessor s approval must first be obtained. All expenses which have risen while the lease assets has been in use are to be recorded in the relevant re been accounts in the balance sheet.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 002 GOODS HELD UNDER TRUST OR FOR PROCESSING This account is used to record the value of assets, materials and goods held under trust or for processing. The value of goods held under trust or for processing is accounted at their current valuation when exchange object on display. Where the valuation is not available, an estimated valuation must be used. STRUCTURE AND CONTENTS OF ACCOUNT 002 – GOODS HELD UNDER TRUST OR FOR PROCESSING Debit: Value of goods held under trust or for processing. Credit: Value of assets, materials, goods delivered to use for processing and returned to their owners; Unused materials, goods returned to their owners; Value of assets, materials and goods held under trust returned to their owners.

Debit balance: Value of assets, materials and goods are being held under trust, or being processed. being Expenses with respect to the processing, or maintenance of assets, materials, goods received assets, processing, processing or held under trust, should not be recorded in this account. Such e this trust, expenses should be accounted in the balance sheet items. Accounting for goods held under trust or for processing should be maintained in detail for each type of item; each location and each owner. Materials, goods held under trust should not be used and should be maintained as carefully as the enterprise s assets. A receipt note signed by the two parties should be prepared when receiving or returning consigned assets.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 003 GOODS RECEIVED ON CONSIGNMENT FOR SALE, DEPOSIT OR COLLATERAL This account is used to record the value of goods received on consignment for sales, deposits from other entities or individuals. STRUCTURE AND CONTENTS OF ACCOUNT 003 – GOODS RECEIVED ON CONSIGNMENT FOR SALE Debit: Value of goods received on consignment for sale, deposit or collateral.

Credit: Value of goods on consignment that were sold or returned to the consignor; Value of goods received for deposits that were sold by order of the court because the partner has breached the contract.

Debit balance: Value of goods is currently kept by the entity. Upon receiving goods consigned for sale, two parties must weigh, measure and determine quantity parties and quality of consigned goods. The accounting for goods consigned for sale should be detailed by each item, consignor, maintenance, and in-charge person. Consigned goods sold or returned to consignors should be credited to account 003 at the contractual price. At the same time, the accountant the should also record entries for balance sheet item in order to reflect sale transaction and payment to entries reflect consignors.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 004 BAD DEBTS WRITTEN OFF This account is used to record receivables which have been written off, but should still be followed up in order to claim money from the debtors. Although the bad debts have been written off, they should be followed up to separately in accordance with the existing financial management system in order to collect them in the case the debtor s financial situation has improved. STRUCTURE AND CONTENTS OF ACCOUNT 004 – BAD DEBTS WRITTEN OFF Debit: Bad debts are written off the balance sheet that still are followed up in the off balance sheet accounts. Credit: Amount collected from bad debts; Amount of bad debts that were written off, yet don t have to be followed up according to the decision made by the authorized body.

Debit balance: Bad debts to be followed up. If a bad debt which has been written off is collected, the amount received should be recorded in other income balance sheet items , as well as credited to account 004 Bad debts written off . In the case, it is unlikely to collect the bad debts written off, a report asking for writing off of the off balance sheet account should be submitted to the authorized body. Upon the decision made by the authorized body, a credit should be recorded in account 004. t fo Accounting for this account should be maintained in detail for each individual bad debt and each debtor.

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 007 MULTI-FOREIGN CURRENCIES This account is used to record cash received, spent and balance in original monetary unit for each currency. STRUCTURE AND CONTENTS OF ACCOUNT 007 – MULTI-FOREIGN CURRENCIES Debit: Amount of foreign currency received at original monetary unit . Credit: Amount of foreign currency spent at original monetary unit . Debit balance: Amount of foreign currency being held by the entity at original monetary unit . The foreign currencies should not be converted into VND when they are recorded in this account. The records should include details for each foreign currency. details

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MINISTRY OF FINANCE Decision 15/2006/QD-BTC ACCOUNT 008 SUBSIDIES OF STATES BUDGET This account is used to record budget resources received by the entity which have been approved with administrative budget or project budget from the authorized body. This account should be kept track in detail: administrative subsidies and project subsidies. STRUCTURE AND CONTENTS OF ACCOUNT 008 – SUBSIDIES OF STATES BUDGET Debit: Budget to be received. Credit: ve Budget for administrative and project spent. Debit balance: Budgets to be received. At the end of the year, the outstanding balance shall be either abolished or carried forward to the following year according to the decision of authorized body. Since entity has different kinds of decision Since budgets, details of subsidies for administrative budget and for project budget must be kept track by budget each kind of budget.

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