Circular No. 99/2025/TT-BTC Guiding the Corporate Accounting Regime

CORPORATE ACCOUNTING GUIDELINES

Pursuant to the Law on Accounting dated November 20, 2015;

Pursuant to the Law on Amendments to the Law on Securities, the Law on Accounting, the Law on Independent Audit, the Law on State Budget, the Law on Management and Use of Public Property, the Law on Tax Administration, the Law on Personal Income Tax, the Law on National Reserves, the Law on Handling of Administrative Violations dated November 29, 2024;

Pursuant to the Government’s Decree No. 29/2025/ND-CP dated February 24, 2025 on functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to the Government’s Decree No. 166/2025/ND-CP dated June 30, 2025 on amendments to the Government’s Decree No. 29/2025/ND-CP dated February 24, 2025 on functions, tasks, powers and organizational structure of the Ministry of Finance;

At the request of the Director of the Department of Accounting and Auditing Regulations;

The Minister of Finance promulgates the Circular on corporate accounting guidelines.

Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Circular provides guidelines for accounting records, chart of accounts, bookkeeping procedures, preparation and presentation of financial statements of enterprises. The determination of an enterprise’s obligations to the State Budget shall be carried out in accordance with tax laws.

Article 2. Regulated entities

1. This Circular provide guidelines for accounting of enterprises in all industries and economic sectors.

2. Credit institutions and foreign bank branches (FBBs) shall implement accounting regulations or legislative documents on accounting under guidance of State Bank of Vietnam (SBV).

Article 3. Corporate governance and internal control 

1. The initiation, execution, management, and control of economic transactions of enterprises must comply with applicable laws and relevant regulatory frameworks.

2. Enterprises are responsible for developing internal governance policies (or equivalent documentation) and carry out internal control to clearly delineate the rights, obligations, and responsibilities of departments and individuals involved in the initiation, execution, management, and control of economic transactions, ensuring ensures compliance with enterprise laws and relevant laws.

Article 4. Accounting currency

1. “accounting currency” shall be the Vietnamese Dong (national symbol: “đ”; international symbol: “VND”), which shall be used for bookkeeping, preparation and presentation of financial statements of enterprises. In cases where an enterprise primarily receives and expends foreign currency, and meets the criteria set forth in Clauses 2, 3, and 4 of this Article, it may designate a foreign currency as its accounting currency for bookkeeping purposes and take legal responsibility for this designation.

2. An enterprise shall determine the accounting currency that satisfies the following criteria:

a) The currency affects the pricing of goods/services, and is regularly used for payment and listing selling prices of goods/services;

b) The currency primarily affects the labor costs, material costs, and other operating costs, and is commonly used to pay such costs.

3. If the enterprise cannot determine its accounting currency based on the criteria specified in Clause 2 of this Article, the following factors may be considered: 

a) The currency is used to raise financial resources (the currency used for issuance of debt instruments, equity instruments, etc.);

b) The currency is regularly received from business operation and retained as reserves.

4. The accounting currency reflects the transactions, events and conditions relevant to the enterprise’s operations. Once determined, the accounting currency shall not be changed unless there is a significant change in the enterprise’s operational or managerial environment that results in a fundamental shift in these transactions, events and conditions.

Article 5. Change of accounting currency

1. Rules for changing the accounting currency

When there is a significant change in the enterprise’s operational or managerial environment such that the its accounting currency no longer satisfies the criteria set out in Clauses 2, 3 and 4 Article 4 of this Circular, the enterprise may change its accounting currency, and such a change is permitted only at the beginning of a new accounting year.

2. Rules for preparing financial statement upon change of the accounting currency

a) In the first accounting period following the change, the enterprise shall translate the balances of all accounts in the accounting books and the Statement of Financial Position into the new accounting currency at the Telegraphic Transfer Middle (TTM) rate (the arithmetic mean of the buying and selling transfer rates) quoted by the commercial bank with which the enterprise most transacts as of the date of the accounting currency change.

b) For comparative information (prior period column) in the Profit and Loss (P&L) Statement and the Cash Flow Statement, the enterprise shall apply the TTM rate of the same commercial bank for the period preceding the period in which the change occurs. 

c) The enterprise shall Financial Statement Notes the reason for the change of accounting currency and any effects that the change has on the Financial Statements.

Article 6. Accounting works when the enterprise selects an accounting currency other than VND

1. The legally binding financial statements that the enterprise must disclose publicly and submit to competent authorities in Vietnam shall be presented in Vietnamese Dong. Therefore, the enterprise must translate its financial statements from the accounting currency into VND in accordance with Clause 3 of this Article, unless otherwise prescribed by law.

2. In cases where the law requires the enterprise’s financial statements to be audited by an independent audit firm, the audited financial statements must be presented in VND.

3. Method for translation of financial statements prepared in a foreign currency into VND

a) When translating financial statements prepared in a foreign currency into Vietnamese Dong, the enterprise shall apply the following principles:

– Assets and liabilities shall be translated into VND at the TTM rate quoted by the commercial bank with which the enterprise most frequently transacts as of the end of the accounting period;

– Equity (owner’s capital contributions, capital surplus, other capital, bond conversion options) shall be translated into VND at the actual exchange rate on the date of capital contribution;

– Differences upon asset remeasurement shall be translated into VND at the actual transaction exchange rate on the date of revaluation;

– Undistributed post-tax profits (retained earnings), funds derived from retained earnings for each period shall be translated into VND according to the items in the P&L Statement. The remaining retained earnings shall be translated into VND at the book exchange rate recorded for retained earnings;

– Items in the P&L Statement and Cash Flow Statement shall be translated into VND at the actual exchange rate at the time of the transaction. If the average exchange rate for the accounting period approximates the actual exchange rate at the time of transaction (the difference does not exceed the spot exchange rate band prescribed by SBV), the enterprise may opt to use the average exchange rate for the accounting period.

b) Accounting of exchange differences due to translation of financial statements from foreign currency into VND.

Exchange differences that occur after translation of Financial Statements from foreign currency into VND shall be recognized under the item “Exchange differences” within the equity section of the Statement of Financial Position.

c) When translating Financial Statements prepared in a foreign currency into VND, the enterprise must clearly disclose in the Financial Statement Notes the impacts of the translation on the Financial Statements

Article 7. Organization of the accounting system and accounting works at affiliated units of the enterprise

1. Affiliated units are dependent units as defined by enterprise laws.

2. The enterprise is responsible for organizing its accounting system and may determine the accounting works to be performed by its affiliated units in a manner that is consistent with the nature of its business operations and management requirements, and conformable with law.

3. The organization of the accounting system and accounting works at affiliated units of the enterprise shall be carried out as follows:

a) The enterprise may delegate its affiliated units to recognize the capital allocated by the enterprise to the affiliated units either as liabilities or as equity; recognize or not to recognize revenues and cost of goods sold (COGS) when transferring products, goods, services between internal stages, regardless of the form of accounting records used (invoices or internally transferred records), as long as it aligns with the enterprise’s operational model and management requirements. 

b) The enterprise may delegate its affiliated units prepare or not to prepare Financial Statements. However, the enterprise’s Financial Statements submitted to competent authorities or disclosed publicly must include financial information from both the headquarters and all affiliated units, regardless of whether the enterprise has delegated its affiliated units prepare or not to prepare Financial Statements.

Chapter II

ACCOUNTING RECORDS 

Article 8. General provisions on accounting records

Accounting records of the enterprise must be prepared in accordance with the Law on Accounting, its elaborating documents, and any amendments or replacements thereto.

Article 9. Standard forms of accounting records

1. Enterprises may refer to and apply the standard forms of accounting records provided in Appendix I attached to this Circular.

2. Enterprises may design additional forms or modify the standard forms of accounting records provided in Appendix I to suit the specific characteristics of business operations and management requirements. Such addition or modification must comply with Article 16 of the Law on Accounting and must ensure that the records fully, promptly, truthfully, and transparently reflect the enterprise’s assets and equity, and are easy to verify, control and compare.

When adding or modifying accounting record forms, the enterprise must issue an internal accounting policy (or equivalent documentation) outlining the changes as the basis for implementation. This policy must clearly state the necessity of the changes and the enterprise’s legal responsibility for such changes.

If the enterprise does not design additional accounting record forms or modify accounting record forms, it shall apply the standard forms of accounting records in Appendix I of this Circular. 

3. If the enterprise has accounting records that are regulated by other laws, they must comply with the other laws.

Article 10. Preparing, signing and controlling accounting records 

1. Every economic or financial transaction related to the enterprise’s operations must be documented into accounting records. Only one accounting record shall be prepared for each economic or financial transaction.

2. Accounting records shall be prepared and signed in accordance with the Law on Accounting, its elaborating documents, provisions of this Circular, and any amendments or replacements thereto.

3. The delegation of signing authority on accounting records must comply with law, management requirements, and internal governance policies of the enterprise to ensure strict control and safety of assets and capital of the enterprise, and clearly determine accountability of involved individuals.

4. The chief accountant (or a person authorized by the chief accountant) must not sign accounting records “on behalf of” the enterprise’s executive, unless otherwise prescribed by law.

Chapter III 

CHART OF ACCOUNTS

Article 11. Chart of accounts

1. The enterprise shall apply the chart of accounts provided in Appendix II hereof to record economic transactions that occur during its operations.

2. Enterprises may add or modify the names, codes, structure, and content of the accounts in Appendix II hereof to suit the specific characteristics of business operations and management requirements. Such addition or modification must ensure proper classification and systematization of transactions by economic substance, avoid duplication of subjects, conformity with applicable accounting principles, and must not alter or affect the line items and information presented in the Financial Statements. 

When adding or modifying names, codes, structure, and content of accounts, the enterprise must issue an internal accounting policy (or equivalent documentation) outlining the changes as the basis for implementation. This policy must clearly state the necessity of the changes and the enterprise’s legal responsibility for such changes.

If the enterprise does not add or modify the names, codes, structure, and content of the accounts, it shall apply the chart of accounts in Appendix II hereof.

3. This Circular only provides guidance on the content and accounting methods for certain key economic transactions. Transactions that are not specifically addressed in this Circular shall, in consideration of their contents and nature, be recorded in accordance with provisions of the Law on Accounting, its elaborating documents, Vietnam’s Accounting Standards, and the principles outlined in this Circular. 

Chapter IV

ACCOUNTING BOOKS

Article 12. Accounting books

1. Accounting books of the enterprise must be prepared in accordance with the Law on Accounting, its elaborating documents, and any amendments or replacements thereto.

2. Enterprises may refer to and apply the accounting book templates in Appendix III hereof.

Enterprises may add or modify the accounting book templates in Appendix III hereof to suit the specific characteristics of business operations and management requirements. Such addition or modification must comply with Clauses 1, 2, 3, 4 Article 24 of the Law on Accounting and must ensure that the records fully, promptly, truthfully, and transparently reflect the enterprise’s assets and equity, and are easy to verify, control and compare.

When adding or modifying accounting book templates, the enterprise must issue an internal accounting policy (or equivalent documentation) outlining the changes as the basis for implementation. This policy must clearly state the necessity of the changes and the enterprise’s legal responsibility for such changes.

If the enterprise does not design additional accounting book templates or modify the existing accounting book templates, it shall apply the model accounting books in Appendix III of this Circular.

Article 13. Opening, recording, and closing accounting books

1. Opening: The accounting book must be opened at the beginning of the accounting year. For newly established enterprises, the accounting book must be opened from the date of establishment.

2. Recording: The enterprise must prepare its accounting books based on accounting records, in accordance with the Law on Accounting and its amendments or replacements. Entries must be recorded in accounting books promptly, clearly, and completely in accordance with the contents of the books. All information and figures recorded in the accounting books must be accurate, truthful, and consistent with the accounting records.

3. Closing: The enterprise must close its accounting book at the end of the accounting period to prepare the Financial Statement, and in other cases as prescribed by law. 

Chapter V

FINANCIAL STATEMENTS

Article 14. Purposes of financial statements

1. Financial statements are used to provide information about the financial position, business performance, and cash flows of the enterprise, meeting the management requirements of the enterprise’s owner, competent authorities, and the needs of users of financial statements in making economic decisions. Financial statements must provide the following information about an enterprise’s:

a) Assets;

b) Liabilities;

c) Equity;

d) Revenues, other incomes, operating expenses and other expenses;

dd) Profit, loss and distribution thereof;

e) Cash flows.

2. In addition to the information in Clause 1 of this Article, the enterprise must also provide other information in the “Financial Statement Notes” to explain the information provided in the financial statements and the accounting policies applied to recognize economic transactions, prepare and present the enterprise’s financial statements.

Article 15. Financial statement reporting period

1. Annual financial statement reporting period: Enterprises shall prepare annual financial statements in accordance with the Law on Accounting.

2. Interim financial statement reporting periods: Interim financial statements include quarter financial statements (including the fourth quarter) and the semi-annual financial statement (6-month financial statement).

3. Other financial statement reporting periods

a) Enterprises shall prepare financial statements for other accounting periods (e.g. monthly financial statements, etc.) as required by law, the parent company, or the owner.

b) Enterprises that are fully divided, acquired, consolidated, converted, dissolved, or bankrupt must prepare financial statements at the time of full division, acquisition, consolidation, conversion, dissolution, or bankruptcy as prescribed by law.

Article 16. Preparing entities and responsibility for preparation of financial statements

1. Preparing entities:

Enterprises in all industries and economic sectors must prepare full annual financial statements as specified in Appendix IV issued with this Circular. The preparation of interim financial statements or financial statements for other accounting periods shall comply with relevant laws or the management requirements of the enterprise. In cases where relevant laws require enterprises to prepare interim financial statements but do not specify the type of interim financial statements, they may choose to prepare either full or condensed interim financial statements.

2. Enterprises with affiliated units must consolidate financial information of the headquarters and the dependent units into the enterprise’s financial statements by eliminating all internal transactions between the headquarters and the affiliated units or among affiliated units. In this case, the headquarters and the dependent units are not required to prepare separate financial statements unless otherwise required by law.

3. The preparation and presentation of consolidated annual financial statements and consolidated interim financial statements shall comply with regulations of law on consolidated financial statements.

4. The preparation and presentation of annual financial statements shall comply with the Law on Accounting, its elaborating documents, and any amendments or replacements thereto. If the enterprise hires an accounting service provider to prepare and present its financial statements or to act as chief accountant, the accounting service practitioner’s license number and the name of the accounting service provider must be specified in the section for the preparer and chief accountant on the enterprise’s financial statements.

Article 17. Financial statement system of enterprises

1. The financial statement system includes:

– Statement of Financial Position;

– Profit and Loss (P&L) Statement;

– Cash Flow Statement;

– Financial Statement Notes;

2. Annual Financial Statements:

a) Annual Financial Statements of enterprises assumed to be going concerns include:

– Statement of Financial Position – Profit and Loss (P&L) Statement – Cash Flow Statement – Financial Statement Notes

Form No. B 01 – DN Form No. B 02 – DN Form No. B 03 – DN Form No. B 09 – DN

b) Annual financial statements of enterprises not assumed to be going concerns include:

– Statement of Financial Position – Profit and Loss (P&L) Statement – Cash Flow Statement – Financial Statement Notes

Form No. B 01 – DNKLT Form No. B 02 – DNKLT Form No. B 03 – DNKLT Form No. B 09 – DNKLT

3. Interim Financial Statements include:

a) Full Interim Financial Statements, including:

– Interim Statement of Financial Position – Interim Profit and Loss (P&L) Statement – Interim Cash Flow Statement – Selected Financial Statement Notes

Form No. B 01a – DN Form No. B 02a – DN Form No. B 03a – DN Form No. B 09a – DN

b) Condensed Interim Financial Statements, including:

– Interim Statement of Financial Position – Interim Profit and Loss (P&L) Statement – Interim Cash Flow Statement – Selected Financial Statement Notes

Form No. B 01b – DN Form No. B 02b – DN Form No. B 03b – DN Form No. B 09a – DN

4. Templates for Annual Financial Statements and Interim Financial Statements (both full and condensed forms) are provided in Appendix IV hereof. Line items without data are exempt from presentation in the financial statements. The enterprise may renumber the line items continuously within each section but must not change the “Code” of the items.

Article 18. Amendments and supplementation of Financial Statements

1. Enterprises shall apply the financial statement system provided in Appendix IV hereof to prepare their own financial statements.

Enterprises may more line items to the Financial Statements provided in Appendix IV hereof to suit the specific characteristics of business operations and management requirements. Such addition must comply with Clause 1 and Clause 2 Article 29 of the Law on Accounting and adhere to the rules for preparation and presentation of Financial Statements prescribed in this Circular. The enterprise must specify in their financial statements the additions to the financial statement templates in Appendix IV hereof.

When adding new line items to the financial statements, the enterprise must issue an internal accounting policy (or equivalent documentation) outlining the additions as the basis for implementation. This policy must clearly state the necessity of the additions and the enterprise’s legal responsibility for such additions.

If the enterprise does not add any new line items to the financial statements, it shall apply the financial statement templates provided in Appendix IV hereof.

2. In cases where it is impossible for the enterprise to add or modify line items of the financial statement templates in Appendix IV hereof due to its specific characteristics, a report shall be sent to the Ministry of Finance for guidance on the preparation and presentation of financial statements.

Article 19. Requirements for information presented in Financial Statements

1. Information presented in Financial Statements must truthfully and reasonably reflect the financial position, business performance, cash flows, and other financial information of the enterprise. The information must be complete, objective, and free from errors.

– Information is considered complete when the Financial Statements include all necessary information to help users understand the nature, form, and risks of transactions and events. For certain items, completeness also requires description of quality, influencing factors, and circumstances that may affect the nature and quality of the items. 

– Objective information is information which is presented without bias, ensuring neutrality, accuracy, and truthfulness, without being distorted or manipulated in a manner that alters the impact of financial information to the financial statement users’ advantage or disadvantage.

– A financial statement is considered free from errors if it does not contain omissions, misstatement, or fraudulent information when describing phenomena, selecting, applying and providing reported information. Being free from errors does not imply absolute accuracy in every aspect. An estimate is considered error-free if its nature and limitations of the estimation process are clearly explained and described, and there is no error during the selection of appropriate data during the estimation process.

2. Financial information must be appropriate to help financial statement users forecast, analyze, and make economic decisions.

3. Financial information must be presented fully in all material aspects. Information is considered material if its omission or misstatement could significantly distort the financial statement and affect the economic decisions of financial statement users. Materiality depends on the size or nature, or both, of the omissions or misstatements assessed in the specific context.

4. Information must be verifiable, timely, and understandable.

5. Financial information must be presented consistently and be comparable across accounting periods and among enterprises. When an enterprise changes its going concern status, it must disclose in the Financial Statement Notes the nature, figures, and reasons for reclassifying data for comparison of indicators and line items of the financial statement to ensure comparability with the current period (unless this is impracticable).

Article 20. Preparation and presentation of Financial Statements of enterprises assumed to be going concerns

1. The preparation and presentation of financial statements must comply with the provisions of Vietnam’s Accounting Standard No. 21 – Presentation of Financial Statements and other relevant Vietnam’s Accounting Standards. Material information must be explained to help users accurately understand the financial position of the enterprise.

2. Financial statements must reflect the economic substance of transactions and events rather than their legal form (substance over form).

3. Asset must not be recognized at a value higher than their recoverable value; liabilities must not be recognized at a value lower than the obligations to be settled.

4. Classification of assets and liabilities: Assets and liabilities in the Statement of Financial Position must be presented as current and non-current; line items must be arranged in decreasing order of liquidity.

a) An asset shall be classified as a current asset in one of the following cases:

(i) The enterprise expects to recover, sell, or use the asset within one normal operating cycle;

(ii) The enterprise holds the asset primarily for commercial purposes;

(iii) The enterprise expects to recover the asset within 12 months after the end of the accounting period;

 (iv) The asset is cash or a cash equivalent, unless it is banned from exchange or has not been used to settle a liability for more than 12 months after the end of the account reporting period.

Assets that not classified as current assets under the above guidance are classified as non-current assets.

b) A liability shall be classified as a current liability in one of the following cases:

(i) The enterprise expects to settle the liability within one normal operating cycle;

(ii) The enterprise holds the liability primarily for business purposes;

(iii) The liability is due within 12 months after the end of the accounting period;

(iv) The enterprise does not have the right to reject settlement of the liability (due borrowings, loans, finance lease liabilities, even if the liability will be settled by issuing equity instruments at the counterparty’s option) at any time within 12 months after the end of the accounting period.

Liabilities (such as amounts payable to suppliers, amounts payable to employees, and other operating expenses) that are part of working capital used in the normal operating cycle must be classified as current liabilities even if they are due after 12 months after the end of the accounting period.

Liabilities that not classified as current liabilities under the above guidance are classified as non-current liabilities.

Regarding liabilities classified as current liabilities, if the following events occur during the period between the end of the accounting period and the issuance date the financial statement, they are considered non-adjusting subsequent events:

– Agreements to extend the maturity of a current liability into a non-current liability;

– Remedies for covenant breaches related to non-current liabilities; and

– Grace period granted by the creditor to remedy covenant breaches related non-current liabilities for at least 12 months after the end of the accounting period.

The enterprise must disclose these subsequent events in the Financial Statement Notes as per regulations.

c) If the enterprise chooses to classify assets and liabilities in the Statement of Financial Position based on the normal operating cycle, it must disclose the expected amounts recoverable or payable after 12 months for each line of assets and liabilities when the amounts are expected to be recovered or settled:

(i) within 12 months after the end of the accounting period, and

(ii) after 12 months after the end of the accounting period.

The same normal operating cycle shall be applied to classify both assets and liabilities of the enterprise. For enterprises whose normal operating cycle cannot be clearly determined, the operating cycle is assumed to be 12 months.

d) When preparing financial statements, the enterprise must reclassify non-current assets and liabilities of the previous period as current assets and liabilities in the current period if, as of the end of the accounting period, these assets and liabilities meet the criteria for classification current assets and liabilities under Point a and Point b of this Clause, except for cases where reclassification is not permitted under this Circular.

5. Assets and liabilities must be presented separately. The enterprise may offset assets and liabilities only when they are related to the same counterparty, have quick turnover, short maturity, and arise from transactions and events of the same type.

6. Revenue, income, and expenses directly related to generating such revenue and income must be presented on the matching principle and conservatism principle. The P&L Statement and Cash Flow Statement must reflect revenue, income, expenses, and cash flows for the reporting period. If material errors are discovered in the financial statement of the previous period, they must be retrospectively adjusted as per regulations.

7. If the enterprise has affiliated units, the enterprise’s financial statements must consolidate financial information of both the headquarters and the affiliated units. Internal balances in the Statement of Financial Position, unrealized revenue, expenses, profits, and losses arising from internal transactions must be eliminated.

Article 21. Preparation and presentation of financial statements upon change of accounting period

When the accounting period is change, e.g. the enterprise changes its accounting period from the calendar year to a different fiscal year, it must close its accounting books and prepare financial statements according to the following principles:

1. The change of accounting period must comply with the Law on Accounting. When changing the accounting year, the enterprise must prepare separate financial statements for the period between the old and the new fiscal years.

2. For the Statement of Financial Position: All balances of assets, liabilities, and equity at the end of the previous accounting period before the change must be recorded as the opening balances of the new accounting period and presented in the column “Số đầu năm” (“Start of year”).

3. Regarding the P&L Statement and Cash Flow Statement for the accounting period from the end of the previous accounting period to the date of change: figures from the end of the previous accounting period to the date of change must be presented in the column “Kỳ này” (“Current period”). The column “Kỳ trước” (“Previous period”) presents the corresponding figures from the previous accounting period or the figures of 12 months in the financial statement of the preceding fiscal year.

4. The enterprise must clearly disclose:

a) The reason for changing the ending date of the fiscal year;

b) The comparative figures presented in the P&L Statement, Cash Flow Statement, and the relevant Financial Statement Notes. In cases where the “Previous period” figures in the P&L Statement and Cash Flow Statement of the current period are from the 12-month period of the preceding fiscal year, the enterprise must disclose the incomparability between information of the current reporting period and the information of the comparative period in accordance with Vietnam’s Accounting Standard No. 21 – Presentation of Financial Statements.

Article 22. Preparation and presentation of financial statements upon business type conversion

Upon business type conversion (changing the type of enterprise), the enterprise must close its accounting books and prepare financial statements as prescribed by law. In the first accounting period following the conversion, the enterprise must do bookkeeping and present financial statements according to the following principles:

1. For accounting books reflecting assets, liabilities, and equity: All balances of assets, liabilities, and equity in the accounting books of the old enterprise before conversion must be recorded as opening balances in the accounting books of the new enterprise.

2. For the Statement of Financial Position: All balances of assets, liabilities, and equity inherited from the old enterprise before conversion must be recorded as the opening balances of the new enterprise and presented in the column “Số đầu năm” (“Start of year”).

3. For the P&L Statement and Cash Flow Statement: figures from the time of conversion to the end of the first reporting period must be presented in the column “Kỳ này” (“Current period”). The column “Kỳ trước” (“Previous period”) presents the cumulative figures from the beginning of the reporting year to the time of conversion, and the enterprise must clearly disclose the reason for any incomparability between information of the reporting period and the comparative period in accordance with Vietnamese Accounting Standard No. 21 – Presentation of Financial Statements.

Article 23. Preparation and presentation of financial statements upon full division (split-up), partial division (split-off), consolidation, acquisition of enterprises

1. General principles

a) Enterprise acquisition

a1) Upon enterprise acquisition, the involved enterprises (the acquiring enterprise and the acquired enterprise) must comply with enterprise laws and other relevant laws.

a2) The net asset value received by the acquiring enterprise from the acquired enterprise shall be determined as follows: 

(i) If the acquisition transaction qualifies as a business activity under the definition in Vietnam’s Accounting Standard No. 11 – Business consolidation and the acquisition is conducted between enterprises under common control, the acquiring enterprise shall recognize the assets and liabilities received from the acquired enterprise in its accounting books at the carrying amounts recorded in the separate financial statements of the acquired enterprise at the acquisition time.

(ii) If the acquisition transaction qualifies as a business activity under the definition in Vietnam’s Accounting Standard No. 11 – Business consolidation and the acquisition is conducted between enterprises that are not under common control, the acquiring enterprise shall recognize the assets and liabilities received from the acquired enterprise following the purchase method prescribed in Vietnam’s Accounting Standard No. 11 – Business consolidation.

(iii) If the acquisition transaction does not qualify as a business activity under the definition in Vietnam’s Accounting Standard No. 11 – Business consolidation, the acquiring enterprise shall recognize the assets and liabilities received from the acquired as enterprise a group of assets or net assets.

a3) Determining the acquisition transaction costs

(i) In cases where the acquiring enterprise uses investments in subsidiaries, joint ventures, associate companies, other investments, or pays additional cash, or uses non-monetary assets such as inventories, fixed assets, investment properties, etc., or issues equity instruments to pay other investors when conducting the acquisition, the value of investments, non-monetary assets, or equity instruments issued by the acquiring enterprise shall be determined as follows:

– If the acquisition transaction qualifies as a business activity under the definition in Vietnam’s Accounting Standard No. 11 – Business consolidation: The value of exchanged non-monetary assets, incurred liabilities and issued equity instruments for the acquisition shall be determined in accordance with Vietnam’s Accounting Standard No. 11 – Business consolidation.

– If the acquisition transaction does not qualify as a business activity under the definition in Vietnam’s Accounting Standard No. 11 – Business consolidation: The acquiring enterprise shall prioritize the use of fair value of the assets and liabilities received on the exchange date for determining the payment value of the exchanged non-monetary assets or equity instruments issued for the acquisition transaction. If the fair value of the received assets and liabilities on the exchange date cannot be determined or are unreliable, the fair value of the exchanged assets, or another value that is more reliable according to other evidence and calculation methods, shall be used. Any difference (if any) between the issued share value and the par value shall be recorded as capital surplus. Any difference (if any) between the fair value and the carrying amounts of inventories, fixed assets, investment properties, etc., shall be recorded as profit or loss for the period similarly to sale or exchange of those assets.

If the payment value is determined collectively for multiple non-monetary assets exchanged, based on the understanding of the parties on the transaction date, the acquiring enterprise shall determine the selling price of each asset given using a systematic method (such as allocation based on carrying amount, fair value of given assets on the exchange date, etc.).

The parties must comply with relevant regulations of law when determining the value of non-monetary assets exchanged for the acquisition. The remeasurement of the carrying amount of non-monetary assets exchanged for the acquisition shall only be carried out when there is clear and reliable evidence that the market value of those non-monetary assets at the time of exchange differs from their carrying amount. The parties involved in the acquisition and related parties shall be legally responsible for any intentional mispricing or incorrect valuation of non-monetary assets exchanged for the acquisition.

(ii) The acquiring enterprise must cease recognizing the assets given or spent to carry out the acquisition transaction, such as investments in subsidiaries, joint ventures, associate companies, other investments, issuance of equity instruments, cash, non-monetary assets, or other benefits, etc. at the carrying amount of those assets in the separate financial statements of the acquiring enterprise. This carrying amount equals (=) the original cost minus (-) asset impairment provisions, or carrying amount equals (=) original cost minus (-) accumulated depreciation of fixed assets or investment properties.

a4) Accounting principles for the difference between the acquisition transaction cost (the value of assets or benefits that the acquiring enterprise must give up or that are reduced) and the net asset value received from the acquired enterprise in cases where the acquisition transaction qualifies as a business activity under the definition in Vietnam’s Accounting Standard No. 11 – Business consolidation:

(i) If the acquisition transaction is conducted between enterprises under common control, the difference between the acquisition transaction cost and the carrying amount of net assets in the separate financial statements of the acquired enterprise shall be fully recorded in Account 4118 – Other Capital and periodically transferred to Account 421 – Undistributed Post-Tax Profit in the accounting books of the acquiring enterprise over a period not exceeding 10 years, starting from the acquisition date, using the straight line method or another reasonable method.

(ii) If the acquisition transaction is conducted between enterprises that are not under common control, the difference between the acquisition transaction cost and the fair value of net identifiable assets in the separate financial statements of the acquired enterprise shall be accounted for as goodwill or negative goodwill arising from the business consolidation transaction, in accordance with the guidance in Vietnam’s Accounting Standard No. 11 – Business Consolidation.

a5) In cases where the acquisition involves internal transactions related to the purchase and sale of goods, services, fixed assets, etc., after receiving the net assets of the subsidiary, the parent company must eliminate internal transactions before preparing and presenting its separate financial statements for the accounting period in which the acquisition occurs.

a6) Tax obligations related to internal transactions involving the purchase and sale of goods, services, fixed assets, etc., during the acquisition shall be determined in accordance with tax laws. Deferred corporate income tax (CIT) related to temporary differences between the net asset value and the tax base of net assets (which may arise from unrealized profits/losses on internal transactions) shall be accounted for by the acquiring enterprise in accordance with Vietnam’s Accounting Standard No. 17 – Corporate Income Tax.

a7) In the cases of enterprise acquisition other than those specified above, enterprises shall apply the principles set out in the Vietnam’s Accounting Standards system, the guidance in this Circular, and the nature of the acquisition transaction to do bookkeeping appropriately.

b) Full division, partial division, consolidation of enterprises

b1) Upon full division, partial division, consolidation, the involved enterprises (the new enterprises and the divided enterprises or consolidating enterprises) must comply with enterprise laws and other relevant laws.

b2) The net asset value received by the new enterprise from the divided enterprises or consolidating enterprises shall be determined as follows:

(i) Consolidation of enterprises:

– If the consolidation transaction qualifies as a business activity under the definition in Vietnam’s Accounting Standard No. 11 – Business consolidation and the consolidation is conducted between enterprises under common control, the new enterprise shall recognize the assets and liabilities received from the consolidating enterprises in its accounting books at the carrying amounts recorded in the separate financial statements of the consolidating enterprises at the consolidation time.

– If the consolidation transaction qualifies as a business activity under the definition in Vietnam’s Accounting Standard No. 11 – Business consolidation and the consolidation is conducted between enterprises that are not under common control, the new enterprise shall recognize the assets and liabilities received from the consolidating enterprises following the purchase method prescribed in Vietnam’s Accounting Standard No. 11 – Business consolidation.

– If the consolidation transaction does not qualify as a business activity under the definition in Vietnam’s Accounting Standard No. 11 – Business consolidation, the new enterprise shall recognize the assets and liabilities received from the consolidating enterprises as a group of assets or net assets.

(ii) Fully division and partial division of enterprises: The new enterprise shall recognize in its accounting books the net asset value received from the divided enterprise at the carrying amounts recorded in the separate financial statements of the divided enterprise at the time of division.

b3) In cases where the new enterprises issue equity instruments to carry out the division or consolidation transaction, the new enterprise shall prioritize the use of the fair value of the assets and liabilities received on the exchange date to determine the fair value of the equity instruments, except when determining the value of issued equity instruments for calculating business consolidation cost, in which case the enterprise shall follow the guidance in Vietnam’s Accounting Standard No. 11 – Business Consolidation. If the fair value of the assets and liabilities received on the exchange date cannot be determined or is unreliable, the fair value of the equity instruments shall be the market price listed on the stock exchange. If the equity instruments are not listed, the value that is more reliable according to other evidence and calculation methods shall be used. Any difference between the issued share value and the par value shall be recorded as capital surplus.

b4) In the cases of enterprise division and consolidation other than those specified above, enterprises shall apply the principles set out in the Vietnam’s Accounting Standards system, the guidance in this Circular, and the nature of the division or consolidation transaction to do bookkeeping appropriately.

c) If the full division, partial division, consolidation, or acquisition of state-owned enterprises is regulated by different provisions from the principles specified in this Article, the provisions applicable to state-owned enterprises shall be complied with.

2. The bookkeeping and preparation of financial statements of relevant enterprises upon full division, partial division, consolidation, or acquisition shall be carried out as follows:

a) For accounting books reflecting assets, liabilities, and equity:

a1) The value of assets, liabilities, and equity received from the acquired enterprise shall be recorded by the acquiring enterprise as current-period entries in its accounting books. The opening balances of assets, liabilities, and equity in the accounting books of the acquiring enterprise shall remain unchanged.

a2) The value of assets, liabilities, and equity received from the consolidating enterprises shall be recorded by the new enterprise as current-period entries in its accounting books. The opening balances of assets, liabilities, and equity in the accounting books of the acquiring enterprise shall be left blank.

a3) The value of assets, liabilities, and equity transferred from the fully divided enterprise (original enterprise) to the new enterprises shall be recorded by the new enterprises as current-period entries in the new enterprises’ accounting books. The opening balances of assets, liabilities, and equity in the accounting books of the new enterprises shall be left blank.

a4) The value of assets, liabilities, and equity transferred from the partially divided enterprise (parent company) to the new enterprise (divested entity) shall be recorded by the new enterprise as current-period entries in the new enterprise’s accounting books. The opening balances of assets, liabilities, and equity in the accounting books of the new enterprise (divested entity) shall be left blank. The opening balances of assets, liabilities, and equity in the accounting books of the partially divided enterprise (parent company) shall remain unchanged.

b) For Statements of Financial Position:

b1) The value of assets, liabilities, and equity received from the acquired enterprise shall be consolidated by the acquiring enterprise and presented in the “Số cuối năm” (“End of year”) column in its Statement of Financial Position. The “Số đầu năm” (“Start of year”) column in the Statement of Financial Position of the acquiring enterprise shall remain unchanged.

b2) The value of assets, liabilities, and equity received from the consolidating enterprises shall be consolidated by the new enterprise and presented in the “Số cuối năm” (“End of year”) column in its Statement of Financial Position. The “Số đầu năm” (“Start of year”) column in the Statement of Financial Position of the new enterprise shall be left blank.

b3) The value of assets, liabilities, and equity inherited from the fully divided enterprise (original company) or partially divided enterprise (parent company) shall be consolidated by the new enterprises and presented in the “Số cuối năm” (“End of year”) column in their Statement of Financial Position. The “Số đầu năm” (“Start of year”) column in the Statement of Financial Position of the new enterprises shall be left blank. The “Số đầu năm” (“Start of year”) column in the Statement of Financial Position of the partially divided enterprise (parent company) shall remain unchanged.

c) For P&L Statements and Cash Flow Statements:

c1) The acquiring enterprise shall only recognize and present the figures of the acquired enterprise in its statement of P&L Statement and Cash Flow Statement from the acquisition date to the end of the reporting period in the “Current year” column. The “Previous year” column of the acquiring enterprise shall remain unchanged.

c2) The new enterprises shall only present the figures from the date or division or consolidation to the end of the first reporting period in the “Current year” column. The “Previous year” column of the new enterprises shall be left blank. The partially divided enterprise (parent company) shall no longer recognize and present figures of the divested entity from the date of partial division to the end of the reporting period.

Article 24. Rules for preparation and presentation of Financial Statements of enterprises not assumed to be going concerns

1. When preparing and presenting financial statements, the enterprise must consider the signs that it is not assumed to be a going concern. An enterprise is not considered a going concern if it is expected to be dissolved, go bankrupt, cease operations, or significantly downsize within 12 months from the end of the accounting period. The enterprise must disclose its going concern status when there are material uncertainties that may cast significant doubt on its ability to operate continuously.

2. In any of the following cases, an enterprise is still considered a going concern and thus is not required to prepare and present financial statements on a non-going concern basis:

– The enterprise is undergoing conversion, including equitization of a state-owned enterprise into a joint-stock company;

– The enterprise is undergoing full division, partial division, consolidation, or acquisition;

– An enterprise (subsidiary company) is converted into an affiliated unit (branch) or vice versa.

3. When the enterprise is not assumed to be a going concern, the enterprise must still prepare the following financial statements:

– Statement of Financial Position for enterprises not assumed to be going concerns	Form B 01 – DNKLT presented following a separate template
– P&L applicable to enterprises for enterprises not assumed to be going concerns	Form B 02 – DNKLT and presented following the same template as that for enterprises assumed to be going concerns
– Cash Flow Statement for enterprises not assumed to be going concerns	Form B 03 – DNKLT and presented following the same template as that for enterprises assumed to be going concerns
– Financial Statement Notes for enterprises not assumed to be going concerns	Form B 09 – DNKLT presented following a separate template

4. If the going concern assumption is no longer appropriate at the end of the accounting period, the enterprise must reclassify its non-current assets and liabilities as current assets and liabilities. At the same time, the enterprise must remeasure all assets and liabilities, unless a third party inherits the rights to the assets or obligations for the liabilities at their book value. The enterprise must record the remeasured values in its accounting books before preparing the Statement of Financial Position.

5. The enterprise is not required to remeasure assets and liabilities if a third party assumes the rights to the assets or obligations for the liabilities in the following specific cases:

a) Another party guarantees the recovery of each specific asset item for the dissolved or bankrupt entity at book value, and recovery occurs before the entity officially ceases operations;

b) A third party guarantees the payment of each specific liability item for the dissolved or bankrupt entity, and the dissolved or bankrupt entity only has the obligation to repay the third party at book value.

6. Remeasurement shall be performed for each type of asset and liability at the end of the accounting period according to the following principles:

a) For assets:

– Inventories, biological assets, long-term work in progress, equipment, materials, and long-term spare parts shall be measured and recognized at the lower of original cost and net realizable value;

– Tangible fixed assets, intangible fixed assets, investment properties, and construction in progress shall be measured and recognized at the lower of carrying amount and recoverable amount (defined as liquidation price minus (-) estimated liquidation expenses). Finance-leased fixed assets with a mandatory buy-back clause shall be remeasured and recognized similarly to fixed assets owned by the enterprise; if returned to the lessor, the assets shall be remeasured and recognized at the remaining finance lease liability payable to the lessor.

– Trading securities shall be measured and recognized at fair value;

– Held-to-maturity investments, receivables, investments in subsidiaries, joint ventures, associate companies, and other entities shall be measured and recognized at the lower of carrying amount and recoverable amount (saleable price minus estimated selling expenses).

b) For liabilities: If there is a written agreement between parties regarding the payable amount, remeasurement shall be performed following the agreed amount. If no specific agreement exists:

– Monetary liabilities shall be remeasured and recognized at the higher of the carrying amount of the liability and the amount settled early as per contract terms;

– Liabilities payable in financial assets shall be remeasured and recognized at the higher of the carrying amount of the liability and the fair value of the financial asset;

– Liabilities payable in inventories shall be remeasured and recognized at the higher of the carrying amount of the liability and the buying price (plus directly related costs) or production cost of the inventories;

– Liabilities payable in fixed asset shall be remeasured and recognized at the higher of the carrying amount of the liability and the buying price (plus directly related costs) or residual value of the fixed assets.

c) Monetary items denominated in foreign currencies shall be remeasured at the Telegraphic Transfer Middle (TTM) rate quoted by the commercial bank with which the enterprise most frequently transacts as of the end of the accounting period. The enterprise shall remeasure demand deposits in foreign currencies at the TTM rate quoted by the commercial bank where the enterprise opens its demand deposit account.

7. Accounting methods for certain asset items of enterprises not assumed to be going concerns:

a) Provisions or impairment assessment shall be directly deducted from the carrying amount of the asset, and not recorded under Account 229 – Provision for Asset Impairment;

b) Depreciation or impairment of fixed assets and investment properties shall be directly deducted from the carrying amount of the asset, and Account 214 – Depreciation of Fixed Assets shall not be used to reflect accumulated depreciation.

8. When going concern assumption is no longer appropriate, the enterprise must address the following financial issues:

– Record expected future losses as accrued expenses if the likelihood of loss is reasonably certain and the amount of loss can be reliably estimated; recognize current obligations for payables even if full documentation is not yet available (such as contractor acceptance reports, etc.), provided payment is certain.

– Cumulative asset revaluation differences under equity shall be transferred to other income (in case of profit) or other expenses (in case of loss);

– Cumulative asset revaluation differences under equity shall be transferred to other income (in case of profit) or other expenses (in case of loss);

– Unallocated expenses pending allocation shall be fully written off and charged to relevant operating expenses for the period, depending on the specific transaction and similar to recognition by an enterprise that is a going concern;

– The parent company shall cease recognizing goodwill in the consolidated financial statements; any unallocated goodwill shall be immediately charged to administrative expenses;

– Profits or losses from revaluation of assets and liabilities, after offsetting against previously recognized provisions, shall be recorded in financial income, other income, financial expenses, or other expenses depending on the specific item, similar to recognition by an enterprise that is a going concern.

9. When preparing financial statements while the going concern assumption is no longer appropriate, the enterprise must disclose details about its ability to generate cash and settle liabilities and equity for shareholders. It must also reclassify comparative figures in the financial statements of the first period in which the enterprise is no longer assumed to be a going concern (unless impracticable), to ensure comparability with the current reporting period. The nature, figures, and reasons for reclassification must also be disclosed. If reclassification of comparative figures is not possible, the enterprise must clearly explain the reasons for the incomparability between the reporting period and the comparative period. To be specific:

– Amounts expected to be recovered from liquidation, sale of assets, or collection of receivables;

– Ability to settle liabilities in order of priority, such as payments to the State Budget, employees, creditors, suppliers, etc.;

– Ability to pay owners; for joint-stock companies, disclose the expected amount per share;

– Timeline for settling liabilities and equity;

– Reason for incomparability between the reporting period and comparative period: The financial statements of the prior period were prepared under the going concern assumption, but the enterprise is expected to be dissolved, go bankrupt, cease operations, or significantly downsize in the reporting period, and therefore presents the financial statements on a non-going concern basis.

Article 25. Deadlines for submission of Financial Statements

Enterprises must submit their annual financial statements to the competent authorities within 90 days from the ending date of the accounting year.

Parent companies and corporations shall stipulate the deadlines for submission of financial statements by their subsidiaries and affiliated units for consolidation or aggregation in accordance with applicable laws and their own management requirements.

For enterprises required to submit financial statements for other accounting periods under relevant laws (quarterly or semi-annual financial statements, etc.), the deadlines for submitting such financial statements shall comply with the provisions of those relevant laws.

Article 26. Receiving authorities of Financial Statements

1. The submission of Financial Statements to competent authorities must comply with applicable laws.

2. For enterprises required by law to have their Financial Statements audited, the audit reports must be enclosed with their Financial Statements when they are submitted to competent authorities.

3. In cases where the enterprise’s Financial Statements are stored in the National Business Registration Information System, the authorities that receive these Financial Statements may request access to information about these Financial Statements as prescribed by law.

Article 27. Disclosure of Financial Statements

1. Disclosure of financial statements means the enterprise’s disclosure of information about its Financial Statements following one or some disclosure methods specified in Clause 3 of this Article so that users such as owners, creditors, suppliers, investors, etc., can access information on the enterprise’s Financial Statements.

2. Disclosees

Disclosees are entities that receive disclosed information about Financial Statements of enterprises under the Law on Enterprises and relevant laws.

3. Disclosure methods

– Printed publication: The Financial Statements are printed in booklet form to provide information to the disclosees as required by enterprise laws and other relevant laws. The enterprise must retain this publication as part of its accounting records.

– Written notification: The enterprise sends a written notification along with the Financial Statement to the disclosees in accordance with the Law on Enterprises and other relevant laws.

– Posting: The Financial Statements are publicly posted at the enterprise’s headquarters to provide information for the disclosees in accordance with the Law on Enterprises and other relevant laws.

– Website publication: The Financial Statements are published on the enterprise’s website, with a link to the Financial Statements.

– Other methods prescribed by relevant laws.

4. The content and timeline of financial statement disclosure shall comply with the Law on Accounting, its amending, supplementing, replacing documents.

5. For enterprises required by law to have their Financial Statements audited, the disclosed Financial Statements must be accompanied by the audit reports as per regulations. 

Chapter VI

IMPLEMENTATION ORGANIZATION 

Article 28. Use of accounting software

1. Enterprises may use accounting software to perform accounting tasks in accordance with this Circular. The accounting software selected by the enterprise must meet at least the following professional and technical accounting requirements:

a) The accounting procedures and operations established in the software must comply with the provisions of accounting laws, tax laws, and other relevant laws, and must not alter the nature, principles, methods of accounting, information and figures presented in the accounting books and Financial Statements as prescribed.

b) The processing of accounting procedures and related figures and information must ensure accuracy, consistency, and non-duplication. When corrections are made, traces of previously recorded accounting entries must be retained in chronological order.

c) Information and data in the accounting software must be secure and comply with regulations of law on information security and safety. The information system must be capable of alerting or preventing intentional interference that alters recorded accounting information and figures.

d) The software must provide complete and timely output information and data as required by competent authorities and users.

dd) The software must be capable of connecting or ready to connect with other relevant software for accounting operations (e-invoice software, digital signature software, etc.).

e) The software must be capable of being upgraded and modified to comply with changes in accounting laws, tax laws and other relevant laws.

2. The enterprise’s executive, chief accountant/accounting manager, and other relevant individuals shall be responsible for the accuracy and truthfulness of the accounting information and figures provided by the accounting software.

Article 29. Conversion of balances in accounting books

1. Enterprises shall convert balances of the following accounts:

– Based on the balances of detailed Subaccounts 111, 112, 113, 121, 153, 154, 156, 211, 212, 213, enterprises shall carry out conversion to suit their management requirements (if any).

– If the enterprise is a capital contributor but not acting as the accounting party for business cooperation contract, and such contract has not ended as of the effective date of this Circular, the detailed balance of Account 138 – Other Receivables (specifically the capital contributed to business cooperation contracts not under common control) shall be converted to Account 2281 – Investment in Other Entities, in accordance with the nature and position of the enterprise in the business cooperation contract as instructed in this Circular.

– Detailed balance of Account 2413 – Major Repairs of Fixed Assets related to unfinished upgrade and renovation costs shall be converted to Account 2414 – Upgrades and Renovations of Fixed Assets.

– Detailed credit balance of Account 338 – Other Payables regarding payable dividends and profits shall be converted to Account 332 – Payable Dividends and Profits.

– The balance of Account 441 – Capital for Capital Construction Investment and Account 466 – Finances for formation of fixed assets shall be converted to Account 4118 – Other Capital.

2. Other details reflected in other relevant accounts that differ from this Circular must be adjusted to comply with the provisions of this Circular.

Article 30. Transition clauses

1. Enterprises shall apply the following principles when there are changes to accounting policies:

a) In cases where the enterprise must change its accounting policies due to the first-time application of legal regulations or Vietnam’s Accounting Standards, accounting regulations that include specific conversion guidance (using retrospective adjustment, simplified retrospective adjustment, or non-retrospective adjustment), the enterprise must follow such guidance. To be specific:

– Retrospective adjustment or non-retrospective adjustment shall be carried out in accordance with Vietnam’s Accounting Standard No. 29 – Changes in Accounting Policies, Accounting Estimates and Errors.

– The simplified retrospective adjustment method does not require restating comparative figures from the first affected period but calculates the cumulative impact as of the first day of the accounting period in which the new accounting policies are applied, and adjusts the relevant asset and liability items to retained earnings or other equity items as of that date.

b) In cases where the enterprise must change its accounting policies due to the first-time application of legal regulations or Vietnam’s Accounting Standards, accounting regulations without requirements retrospective adjustment or simplified retrospective adjustment, non-retrospective adjustment method may be applied.

c) In cases where the enterprise voluntarily changes its accounting policies, retrospective adjustment shall be applied to such changes.

2. In cases where an enterprise invests in bonds with discounts or bond premiums and the bonds have not yet matured on the effective date of this Circular, it may choose to apply either the retrospective adjustment method or simplified retrospective adjustment method as instructed in Clause 1 of this Article to account for the discounts or bond premiums in the financial statements of the first period in which this Circular is applied.

3. If an enterprise has foreign exchange differences arising from conversion of its accounting currency from VND to another currency or vice versa, and such differences have been reflected in the credit or debit balance of Account 412 – Asset Revaluation Differences and presented in the balance sheet, the enterprise shall transfer the credit or debit balance of Account 412 to Account 421 – Retained Earnings (Account 4211), and must clearly disclose in the Financial Statement Notes the reasons and impacts on Financial Statements.

4. If an enterprise has been recording accrued expenses for major repairs of fixed assets, but the repairs have not been carried out by the effective date of this Circular, the enterprise shall stop recording accrued expenses for major repairs of fixed assets. When the major repairs are carried out, the enterprise shall offset the actual major repair expenses against the previously accrued amount. Any difference between the accrued expenses and actual expenses shall be gradually allocated to operating expenses over each period.

Article 31. Implementation clauses

1. This Circular comes into force from January 01, 2026 and is applicable to fiscal years starting from or after January 01, 2026. This Circular supersedes Circular No. 200/2014/TT-BTC dated December 22, 2014 of the Ministry of Finance on corporate accounting (except the cases specified in Clause 2 of this Article), Circular No. 75/2015/TT-BTC dated May 18, 2015 on Amendments to Article 128 of Circular No. 200/2014/TT-BTC, Circular No. 53/2016/TT-BTC dated March 21, 2016 on Amendments to some Articles of Circular No. 200/2014/TT-BTC, and Circular No. 195/2012/TT-BTC dated November 15, 2012 on accounting for investors.

2. Contents related to equitization of state-owned enterprises in Clause 3.11, Clause 3.12 Article 21; Clause 3.3 Article 35; Point h, i Clause 3 Article 38; Point c Clause 5 Article 40; Point c Clause 3.1, Point d Clause 3.2, Point e Clause 3.3, Point d Clause 3.4 Article 45; Point k, l, m Clause 3 Article 47; Point l Clause 3 Article 54; Clause 3.2, Clause 3.9 Article 57; Point đ Clause 3 Article 62; Point p Clause 3 Article 63; Clause 3.13 Article 67; Article 71; Point g Clause 3 Article 74; Point d Clause 3 Article 77; Clause 3.15, Clause 3.16 Article 92; Point m Clause 3 Article 93; Point d Clause 3 Article 94 of Circular No. 200/2014/TT-BTC shall continue to be implemented until replacing documents are issued.

Small and medium enterprises, non-public facilities and other accounting units may choose to apply this Circular to suit the characteristics of their business operation and management requirements, in which cases this Circular must be applied consistently for at least one full accounting year. When an enterprise changes its accounting regime, it must restate comparative figures and information in a manner similar to a change in accounting policy, and explain the reasons and impacts of such change in the Financial Statement Notes as prescribed.

4. Ministries, central authorities, the People’s Committees, Departments of Finance and Tax Offices of provinces and cities shall instruct enterprises to implement this Circular. Difficulties that arise during the implementation of this Circular should be reported to the Ministry of Finance for settlement./.

PP MINISTER
DEPUTY MINISTER




Nguyen Duc Tam

APPENDIX II

CHART OF ACCOUNTS FOR ENTERPRISES
(Promulgated together with Circular No. 99/2025/TT-BTC dated October 27, 2025 of the Minister of Finance)

A – CHART OF ACCOUNTS

No.	Account code		Account name
	Level 1	Level 2
1	2	3	4
			ASSETS
01	111		Cash on hand
02	112		Cash in banks
03	113		Cash in transit
04	121		Trading securities
05	128		Held-to-maturity (HTM) investments
		1281	Term deposits
		1282	Bonds
		1283	Loans granted
		1288	Other HTM investments
06	131		Trade receivables
07	133		Deductible VAT
		1331	Deductible VAT on goods and services
		1332	Deductible VAT on fixed assets
08	136		Intra-company receivables
		1361	Working capital provided to subsidiary units
		1362	Intra-company receivables on foreign exchange differences
		1363	Intra-company receivables on borrowing costs eligible for capitalization
		1368	Other intra-company receivables
09	138		Other receivables
		1381	Shortage of assets pending resolution
		1383	Excise duty on imports
		1388	Other receivables
10	141		Advances
11	151		Goods in transit
12	152		Raw materials and supplies
13	153		Tools and instruments
14	154		Work-in-progress expenses
15	155		Finished goods
16	156		Merchandise inventory
17	157		Goods on consignment
18	158		Raw materials and supplies in tax-suspension warehouse
19	171		Government bonds purchased for resale
20	211		Tangible fixed assets
21	212		Finance-lease fixed assets
22	213		Intangible fixed assets
23	214		Depreciation of fixed assets
		2141	Depreciation of tangible fixed assets
		2142	Depreciation of finance-lease fixed assets
		2143	Amortization of intangible fixed assets
		2147	Depreciation of investment properties
24	215		Biological assets
		2151	Bearer animals
		21511	Immature bearer animals
		21512	Mature bearer animals
		215121	Historical cost
		215122	Accumulated depreciation
		2152	Consumable  animals
		2153	Seasonal or consumable plants
25	217		Investment properties
26	221		Investments in subsidiaries
27	222		Investments in joint ventures or associates
28	228		Other investments
		2281	Equity investments in other entities
		2288	Other investments
29	229		Allowance for asset impairment
		2291	Allowances for decline in value of trading securities
		2292	Allowance for impairment of investments in other entities
		2293	Allowance for doubtful debts
		2294	Allowance for decline in value of inventory
		2295	Allowance for biological asset impairment
30	241		Construction in progress
		2411	Acquisition of fixed assets
		2412	Capital construction
		2413	Periodic repair and maintenance of fixed assets
		2414	Upgrade and renovation of fixed assets
31	242		Prepaid expenses
32	243		Deferred tax assets
33	244		Collaterals and deposits
			LIABILITIES
34	331		Trade payables
35	332		Dividends and profit distribution payable
36	333		Taxes and other payables to the State
		3331	VAT payable
		33311	Output VAT
		33312	VAT on imports
		3332	Excise duty
		3333	Export and import duties
		3334	Corporate income tax
		3335	Personal income tax
		3336	Natural resources tax
		3337	Tax on housing and land, land rents
		3338	Environment protection tax and other taxes
		33381	Environment protection tax
		33382	Other taxes
		3339	Fees, charges and other payables
37	334		Payables to employees
38	335		Accrued expenses
39	336		Intra-company payables
		3361	Intra-company payables for working capital received
		3362	Intra-company payables for foreign exchange differences
		3363	Intra-company payables for borrowing costs eligible for capitalization
		3368	Other intra-company payables
40	337		Progress billings
41	338		Other payables
		3381	Surplus assets pending resolution
		3382	Trade union contributions
		3383	Social insurance
		3384	Health insurance
		3386	Unemployment insurance
		3387	Unearned revenue
		3388	Other payables
42	341		Borrowings and finance lease liabilities
		3411	Borrowings
		3412	Finance lease liabilities
43	343		Issued bonds
		3431	Ordinary bonds
		3432	Convertible bonds
44	344		Deposits received
45	347		Deferred income tax liabilities
46	352		Provisions
		3521	Product warranty provisions
		3522	Construction warranty provisions
		3523	Enterprise restructuring provisions
		3525	Other provisions
47	353		Bonus and welfare fund
		3531	Bonus fund
		3532	Welfare fund
		3533	Welfare fund used for fixed asset acquisition
		3534	Management bonus fund
48	356		Science and technology development fund
		3561	Science and technology development fund
		3562	Science and technology development fund used for asset acquisition
49	357		Price stabilization fund
			EQUITY
50	411		Owner’s equity
		4111	Owner’s contributed capital
		41111	Ordinary shares with voting rights
		41112	Preference shares
		4112	Capital surplus
		4113	Conversion options on convertible bonds
		4118	Other capital
51	412		Differences upon asset revaluation
52	413		Exchange differences
53	414		Development and investment fund
54	418		Other equity funds
55	419		Treasury shares
56	421		Retained earnings
		4211	Retained earnings – prior years
		4212	Retained earnings – current year
			REVENUE
57	511		Revenue from sale of goods and provision of services
58	515		Financial income
59	521		Revenue deductions
			PRODUCTION AND BUSINESS OPERATION COSTS
60	621		Direct raw material costs
61	622		Direct labor costs
62	623		Construction machinery costs
		6231	Labor costs
		6232	Raw material costs
		6233	Costs of production tools
		6234	Depreciation of construction machinery
		6237	External service costs
		6238	Other cash expenses
63	627		Factory overheads
		6271	Factory staff expenses
		6272	Raw material costs
		6273	Costs of production tools
		6274	Fixed asset depreciation
		6275	Taxes, fees and charges
		6277	External service costs
		6278	Other cash expenses
64	632		Cost of goods sold
65	635		Financial expense
66	641		Selling expenses
		6411	Staff expenses
		6412	Materials and packaging expenses
		6413	Costs of tools and instruments
		6414	Fixed asset depreciation
		6415	Taxes, fees and charges
		6417	External service costs
		6418	Other cash expenses
67	642		General administrative expenses
		6421	Administrative staff expenses
		6422	Administrative material expenses
		6423	Office supplies expenses
		6424	Fixed asset depreciation
		6425	Taxes, fees and charges
		6426	Provisions
		6427	External service costs
		6428	Other cash expenses
			OTHER INCOME
68	711		Other income
			OTHER EXPENSE
69	811		Other expense
70	821		Corporate income tax
		8211	Current corporate income tax
		82111	Current corporate income tax under the Law on Corporate Income Tax
		82112	Top-Up Tax under global minimum tax regulations
		8212	Deferred corporate income tax
			INCOME SUMMARY
71	911		Income summary

 

ACCOUNT 151 – GOODS IN TRANSIT

1. Rules for accounting

a) This account is used to record current value and fluctuation of externally purchased goods and supplies (raw materials and supplies, tools, instruments) that have been owned by the enterprise but still in transit.

b) Goods and supplies considered in transit include:

– Externally purchased goods and supplies for which payment has been made or accepted but still in warehouses of sellers, in ports, depots, bonded warehouses or being transported;

– Goods and supplies that have arrived at the enterprise pending inspection and grant of entry into the warehouse.

c) Goods in transit shall be recorded to Account 151 according to their historical costs as prescribed in Vietnam Accounting Standard No. 02 – Inventory

d) Every day, when receiving purchase invoices before the goods are received into inventory, the enterprise shall defer recording, compare the invoices with economic contracts, and file them in a separate dossier titled “Goods in transit”.

If additional goods are received into inventory during the period, the accountant shall directly record them to Account 152, Account 153, etc. according to goods received notes and purchase invoices.

dd) If goods do not arrive at the end of the warehouse, the enterprise shall record them to Account 151 – Goods in transit according to purchase invoices. For internal management purposes, the enterprise may monitor purchased goods in transit by category, shipment, economic contracts, etc.

2. Structure and contents of Account 151 – Goods in transit

Debit side:

– Value of purchased goods and supplies in transit;

Credit side:

– Value of purchased goods and supplies in transit which have been received into inventory or directly delivered to customers;

Debit balance:

Value of goods and supplies that have been purchased but still in transit (not received into inventory) at the end of the accounting period.

3. Accounting of some primary transactions

a) At the end of accounting period, according to purchase invoices of purchased goods that have not been received into inventory, if input VAT is deductible:

Debit Account 151 – Goods in transit

Debit Account 133 – Deductible VAT

Credit Accounts 111, 112, 141, 331, etc.

If input VAT is not deductible, value of purchased goods shall be inclusive of VAT.

b) In the next accounting period, if the goods are received into inventory or arrived on schedule to serve business or production, according to the invoices and relevant documents:

Debit Accounts 152, 153, 156, 621, etc.

Credit Account 151 – Goods in transit

c) In the next accounting period, if the purchased goods and supplies in transit which are not stocked but instead directly delivered to customers under economic contracts from the seller’s warehouse, the port, depot or directly delivered to the agent:

Debit Accounts 157, 632

Credit Account 151 – Goods in transit

d) In case loss or shortage of purchased goods in transit is detected upon their receipt into inventory or delivery to the buyer, according to relevant documents, the enterprise shall record the loss or shortage of inventory as follows:

Debit Account 138 – Other receivables (1381, 1388).

Credit Account 151 – Goods in transit.

 

ACCOUNT 152 – RAW MATERIALS AND SUPPLIES

1. Rules for accounting

a) This account is used to record current values and fluctuation in values of materials in the enterprise’s inventory or storage locations (except materials recorded in Account 151 – Goods in transit and Account 158 – Raw materials and supplies in tax-suspension warehouse). Materials can be purchased externally or self-processed for the enterprise’s production or business. Depending on the enterprise’s business characteristics and management requirements, raw materials and supplies can be classified as follows:

– Primary materials and supplies: Raw materials and supplies that are used during the manufacturing processes and are incorporated into the products. Each manufacturing enterprise shall define its own primary raw materials and supplies. Primary raw materials and supplies also include externally purchased semi-finished products serving the manufacture of the finished products.

– Secondary supplies: Supplies that are used during the manufacturing processes but are not incorporated into the products and can be combined with primary materials to change colors, tastes, shapes, or improve quality of the products, or facilitate the manufacturing processes, or serve technological purposes, packaging, preservation or work processes.

– Fuels: Materials providing heat energy and facilitate the usual manufacturing processes. Fuels may exist in liquid, solid and gaseous forms.

– Spare parts: Materials used for replacement or repair of machinery, equipment, vehicles, manufacturing tools or instruments, etc.

– Fundamental construction supplies: Supplies and equipment used for fundamental construction. Fundamental construction equipment also includes equipment requiring assembly and equipment not requiring assembly, tools, instruments and structures to be installed in the fundamental construction works.

b) The receipt, dispatch and inventory of raw materials and supplies in Account 152 shall be recorded at their historical costs as prescribed in Vietnam Accounting Standard No. 02 – Inventory. Historical costs of raw materials and supplies shall be determined by source of acquisition.

– Historical costs of externally purchased raw materials and supplies include: Buying prices written on invoices, non-refundable taxes as prescribed by tax laws, costs of transport, material handling, classification, insurance, etc. from the place of purchase to the enterprise’s warehouse, other costs directly related to the purchase of raw materials and supplies, and normal wastage (if any);

+ If VAT on imports is deductible, the value of purchased raw materials and supplies shall be recorded at the VAT-exclusive prices. If VAT on imports is non-deductible, the value of purchased raw materials and supplies shall be recorded at the VAT-inclusive prices.

+ Accounting for raw materials and supplies purchased in foreign currencies shall comply with instructions for Account 413 – Exchange difference.

– Historical costs of self-processed raw materials and supplies include: actual prices of raw materials and supplies, and processing costs.

– Historical costs of raw materials and supplies processed by contract manufacturers include: actual prices of raw materials and supplies, costs of transport of the raw materials and supplies from the enterprise to the processing facility and vice versa, and payment for contract manufacturing (outsourced processing).

– Historical costs of materials contributed as capital are the values that are accepted by the contributing parties of the joint venture and conformable with law.

c) Raw materials and supplies shall be accounted for by warehouse and category. If the enterprise record receipt and dispatch of raw materials and supplies at provisional prices, the enterprise shall calculate the difference coefficient between the provisional prices and actual prices at the end of the period, which shall be the basis for calculating actual prices of raw materials and supplies used in the period, using the formula below:

Difference coefficient between actual price and provisional price of raw materials and supplies	=	Actual price of existing raw materials and supplies	+	Actual price of raw materials and supplies received during the period
		Provisional price of existing raw materials and supplies	+	Provisional price of raw materials and supplies received during the period

 

Actual price of raw materials and supplies used during the period

=

Provisional price of raw materials and supplies used during the period

x

Difference coefficient between actual price and provisional price of raw materials and supplies

d) Raw materials and supplies are not owned by the enterprise e.g. raw materials and supplies held in custody or received for processing, etc. shall not be recorded to this account. Instead, they shall be monitored in a separate book for products, goods, supplies held in custody, entrusted for export/import, received for processing, etc., and explained in the financial statement.

2. Structure and contents of Account 152 – Raw materials and supplies

Debit side:

– Actual value of materials externally purchased, self-manufactured, processed by contract manufacturers, contributed capital, and from other sources;

– Value of excess materials detected upon stocktaking;

Credit side:

– Actual value of materials dispatched for production, business, sale, contract manufacturing, or contribution as capital, etc.

– Value of materials returned to sellers or discounted;

– Trade discounts on purchases of materials;

– Value of shortage and loss of materials detected upon stocktaking;

Debit balance:

Actual value of materials in stock at the end of the accounting period.

3. Accounting of some primary transactions

3.1. When buying materials to add to inventory, according to invoices, goods received notes and relevant documents recording the value of materials received:

Debit Account 152 – Raw materials and supplies 

Debit Account 133 – Deductible VAT (1331) (if any).

Credit Accounts 111, 112, 141, 331, etc. (total settlement price).

3.2. Accounting of materials returned to sellers and discounts on purchase of materials:

– When materials are returned to sellers:

Debit Accounts 111, 112, 331, etc. 

Credit Account 152 – Raw materials and supplies

Credit Account 133 – Deductible VAT (if any).

– Discounts on purchase of raw materials and supplies shall be allocated according to the quantity of raw materials and supplies in stock, dispatched for production construction, or consumed during the period:

Debit Accounts 111, 112, 331, etc. 

Credit Account 152 – Raw materials and supplies (if still in stock)

Credit Accounts 154, 621, 623, 627 (if raw materials and supplies have been dispatched for production)

Cr 241 – Works-in-progress (if raw materials are dispatched for construction investment)

Credit Account 632 – Cost of goods sold (if the product in which those materials are incorporated is consumed during the period)

Credit Accounts 641, 642 (materials used for sale or enterprise management)

Credit Account 133 – Deductible VAT (1331) (if any).

3.3. In case the enterprise has received sales invoices but the raw materials and supplies have not been received into inventory, these sales invoices shall be retained for monitoring goods in transit.

– If the raw materials and supplies arrive and are received into inventory in the period, according to invoices and goods received notes, they shall be recorded to Account 152 – Raw materials and supplies.

– If the raw materials and supplies do not arrive by the end of the period:

Debit Account 151 – Goods in transit

Debit Account 133 – Deductible VAT (1331) (if any).

Credit Accounts 111, 112, 141, 331, etc.

– When the raw materials and supplies arrive and are received into inventory in the next period, according to the invoices and goods received notes:

Debit Account 152 – Raw materials and supplies 

Credit Account 151 – Goods in transit.

3.4. If discounts are given when the seller is paid, such discounts shall be recorded as financial income, and:

Debit Account 331 – Payables to sellers

Credit Account 515 – Financial income

3.5. For imported raw materials and supplies:

– When importing raw materials and supplies:

Debit Account 152 – Raw materials and supplies 

Credit Account 331 – Payables to sellers

Credit Account 3331 – VAT payable (33312) (if input VAT on the imports is not deductible)

Credit Account 3332 – Excise duty (if any)

Credit Account 3333 – Export and import duties (in details).

Credit Account 33381 – Environment protection tax (if any).

– If input VAT on imported goods is deductible, the following accounts shall be recorded:

Debit Account 133 – Deductible VAT

Credit Account 3331 –VAT payable (33312).

– If the seller is paid in advanced in foreign currencies, the value of materials equivalent to the advanced payment shall be recorded at the actual exchange rates at the time of advanced payment. The value of materials not paid for shall be recorded at the actual exchange rates at the time of receipt of the materials.

3.6. Regarding expenditures on purchase, material handling, transport of raw materials and supplies to the enterprise’s warehouse:

Debit Account 152 – Raw materials and supplies

Debit Account 133 – Deductible VAT (1331) (if any).

Credit Accounts 111, 112, 141, 331, etc.

3.7. Regarding raw materials and supplies pending contract manufacturing:

– When dispatching raw materials and supplies to the contract manufacturers:

Debit Account 154 – Work-in-progress costs

Credit Account 152 – Raw materials and supplies.

– When incurring costs of contract manufacturing:

Debit Account 154 – Work-in-progress costs

Debit Account 133 – Deductible VAT (1331) (if any).

Credit Accounts 111, 112, 131, 141, etc.

– When the raw materials and supplies processed by contract manufacturers are stocked:

Debit Account 152 – Raw materials and supplies

Credit Account 154 – Work-in-progress costs.

3.8. Regarding raw materials and supplies pending self-processing:

– When dispatching raw materials and supplies for self-processing:

Debit Account 154 – Work-in-progress costs

Credit Account 152 – Raw materials and supplies.

– When stocking self-processed raw materials and supplies:

Debit Account 152 – Raw materials and supplies

Credit Account 154 – Work-in-progress costs.

3.9. When dispatching materials for production or business operation:

Debit Accounts 621, 623, 627, 641, 642, etc.

Credit Account 152 – Raw materials and supplies.

3.10. When dispatching materials for fundamental construction, repair, maintenance, upgrade or renovation of fixed assets:

Debit Account 241 – Fundamental construction in progress

Credit Account 152 – Raw materials and supplies.

3.11. When contributing materials as capital to subsidiary companies, joint ventures and associate companies:

Debit Accounts 221, 222 (at remeasured value)

Debit Account 811 – Other expense (remeasured value smaller than book value)

Credit Account 152 – Raw materials and supplies (at book values)

Credit Account 711 – Other income (remeasured value greater than book value).

3.12. When dispatching materials to repurchase stakes in subsidiary companies, joint ventures and associate companies:

– For revenues from sale of raw materials and investment in subsidiary companies, joint ventures and associate companies:

Debit Accounts 221, 222 (at fair values)

Credit Account 511 – Revenues from goods sale and service provision

Credit Account 3331 – Output VAT payable.

– For cost prices of raw materials used for purchase of stakes in  subsidiary companies, joint ventures and associate companies:

Debit Account 632 – Costs of goods sold

Credit Account 152 – Raw materials and supplies.

3.13. Excess and shortage of raw materials and supplies detected upon stocktaking:

Every excess and shortage of raw materials and supplies detected upon stocktaking must be documented and investigated to identify the causes and responsible persons. Accounting shall be carried out on the basis of the stocktaking record and handling decision of the competent authority.

a) If the cause for the excess or shortage of materials is found:

– If the excess or shortage is caused by confusion or omission, the enterprise shall supplement or adjust the accounting books;

– If the shortage is caused by normal wastage:

Debit Account 632 – Costs of goods sold

Credit Account 152 – Raw materials and supplies.

– If the responsible person is found:

Debit Account 138 – Other receivables (1388) (the compensation to be paid by the responsible person)

Debit Account 334 – Amounts payable to employees (deduction of the compensation from the responsible person’s salary)

Debit Account 632 – Cost of goods sold (if the shortage after deduction of compensation is recorded as cost of goods sold under the handling decision)

Credit Account 152 – Raw materials and supplies

b) If the cause for excess or shortage of materials is not found:

– In case of shortage:

Debit Account 138 – Other receivables (1381)

Credit Account 152 – Raw materials and supplies.

+ When a handling decision is issued:

Debit Accounts 111, 112, etc. (if compensation has to be paid by the responsible person)

Debit Account 138 – Other receivables (1388) (if compensation has to be collected from the responsible person)

Debit Account 334 – Amounts payable to employees (if the compensation is deducted from the responsible person’s salary)

Debit Account 632 – Costs of goods sold (if the remaining value of shortage of raw materials and supplies is recorded as costs of goods sold)

Credit Account 138 – Other receivables (1381).

+ If the owner or the owner’s representative agency decides to record the asset shortage pending settlement in the income statement, on the basis of the value of the shortage of raw materials and supplies:

Debit Account 632 – Costs of goods sold

Credit Account 138 – Other receivables (1381)

– In case of excess of raw materials and supplies pending settlement:

Debit Account 152 – Raw materials and supplies

Credit Account 338 – Other payables and receivables (3381).

+ When a handling decision is issued:

Debit Account 338 – Other payables and receivables (3381)

Credit relevant accounts.

c) When liquidating or selling materials and scrap:

– To record cost prices:

Debit Account 632 – Costs of goods sold

Credit Account 152 – Raw materials and supplies.

– To record revenues from sale of materials and scrap:

Debit accounts 111, 112, 131

Credit Account 511 – Revenues from goods sale and service provision

Credit Account 333 – Taxes and other amounts payable to the State (if any).

 

ACCOUNT 156 – MERCHANDISE INVENTORY

1. Rules for accounting

a) This account is used to record current value and increase or decrease in merchandise inventory of an enterprise, including merchandise in warehouses, retail outlets, real estate and other assets held or purchased for sale (except trading securities), e.g. phone cards, service usage rights, rights to receive goods, gift vouchers, discount coupons, etc. Merchandise in warehouses and retail outlets refers to supplies and products purchased by the enterprise for sale (wholesale and retail). Real estate inventory includes: land use rights; houses; houses and land use rights; infrastructure purchased for sale during normal business operations; investment property reclassified as inventory when it is put up for sale by the owner.

If the purchased merchandise is used both sale and as raw materials for production or business operations, and these purposes cannot be clearly distinguished, it shall be recorded to Account 152 – Raw materials and supplies.

In case of import-export entrustment transaction, this account is only used by the trustor and not by the trustee. The accounting of purchase and sales of goods related to transactions paid for in foreign currencies shall comply with instructions for Account 413 – Exchange difference.

b) The following merchandise shall not be recorded to Account 156 – Merchandise inventory:

– Consignment goods sold or kept on behalf of other enterprises;

– Goods purchased as raw materials or tools serving production or business operation (recorded to Account 152 – raw materials and supplies or Account 153 – Tools and instruments, etc.).

c) The receipt, dispatch and balance of merchandise inventory shall be recorded to Account 156 at historical costs as prescribed in Vietnam Accounting Standard No. 02 – Inventory. Historical cost of purchased merchandise includes: buying price, purchasing costs, import duties, excise tax, environmental protection tax (if any), and import VAT (if non-deductible). If merchandise purchased for sale requires processing, refurbishing, sorting to increase value or marketability, the buying price shall include such processing costs. 

– The historical cost of purchased merchandise shall be determined by sources of acquisition. Buying prices and purchasing costs may be monitored separately according to the enterprise’s business characteristics and management requirements.

Purchasing costs include the costs directly related to the processing of purchasing the merchandise, such as: insurance, depot rents, costs of transport, material handling, preservation and transport of the merchandise from the supplier to the enterprise’s warehouse; normal wastage during the process of purchase, etc.

If the purchasing cost is related to multiple types of merchandise, they can be allocated to each type according to appropriate criteria and must ensure uniformity according to Vietnam Accounting Standard. If the purchasing cost is insignificant and multiple types of merchandise, they can be recorded as cost of goods sold.

d) Merchandise inventory shall be specifically accounted for according to each warehouse, type, article with detailed tracking of both quantity and value.

2. Structure and contents of Account 156 – Merchandise inventory

Debit side:

– Historical cost of purchased merchandise received into inventory by source of acquisition;

– Value of merchandise processed by contract manufacturers (including buying prices and processing cost);

– Cost of goods returned;

– Value of excess merchandise inventory detected upon stocktaking;

– Value of real estate inventory purchased or converted from investment property.

Credit side:

– Value of merchandise dispatched for sale, to agents, contract manufacturing, or used for production or business operation, etc.

– Trade discounts on purchased merchandise;

– Value of merchandise returned to sellers;

– Value of inventory shortage detected upon stocktaking;

– Value of real estate sold or converted to investment property, real estate used by owners or fixed assets.

Debit balance:

Actual value of merchandise inventory at the end of the accounting period.

Enterprises may open additional detailed accounts for merchandise inventory (such as types of purchased goods, real estate inventory, etc.) appropriate to their business characteristics and management requirements. 

3. Accounting of some primary transactions

3.1. Merchandise purchased and delivered to the enterprise’s warehouse, according to sales invoices, goods received notes and relevant documentary evidence:

a) When the merchandise is received into inventory:

Debit Account 156 – Merchandise inventory (details about purchased merchandise)

Debit Account 133 – Deductible VAT (1331) (if any).

Credit Accounts 111, 112, 141, 331, etc. (total settlement price).

b) When importing merchandise:

Debit Account 156 – Merchandise inventory

Credit Account 331 – Payables to sellers

Credit Account 3331 – VAT payable (33312) (if input VAT on the imports is not deductible)

Credit Account 3332 – Excise duty (if any)

Credit Account 3333 – Import and export duties (details on import duty).

Credit Account 33381 – Environment protection tax (if any).

– If input VAT on the imports is deductible:

Debit Account 133 – Deductible VAT

Credit Account 3331 –VAT payable (33312).

– If the seller is paid in advanced in foreign currencies, the value of purchased merchandise equivalent to the advanced payment shall be recorded at the actual exchange rates at the time of advanced payment. The value of merchandise not paid for shall be recorded at the actual exchange rates at the time of receipt of the merchandise.

– The merchandise purchased under import entrustment shall comply with regulations on Account 331 – Trade payables.

3.2. At the end of the accounting period, if the invoice sent by the seller has been received by the enterprise but the merchandise has not been received into inventory:

Debit Account 151 – Goods in transit

Debit Account 133 – Deductible VAT (if any)

Credit Accounts 111, 112, 331, etc.

– Next accounting period, when the purchased merchandise in transit:

Debit Account 156 – Merchandise inventory

Credit Account 151 – Goods in transit.

3.3 In case discounts are given after buying merchandise, they shall be allocated according to the quantity of merchandise in stock and sold in the period:

Debit Accounts 111, 112, 331, etc.

Credit Account 156 – Merchandise inventory (if in stock)

Credit Account 632 – Costs of goods sold (if consumed during the period)

Credit Account 133 – Deductible VAT (1331) (if any).

3.4. Value of merchandise returned to sellers due to non-conforming specifications:

Debit Accounts 111, 112, 331, etc.

Credit Account 156 – Merchandise inventory.

Credit Account 133 – Deductible VAT (1331) (if any).

3.5. To record costs of purchasing merchandise:

Debit Account 156 – Merchandise inventory (if recorded as value of purchased merchandise)

Debit Account 632 – Costs of goods sold (if recorded as costs of goods sold)

Debit Account 133 – Deductible VAT (if any)

Credit Accounts 111, 112, 141, 331, etc.

3.6. When purchasing merchandise under a deferred payment or instalment plan:

Debit Account 156 – Merchandise inventory (at cash price)

Debit Account 133 – Deductible VAT (if any)

Credit Accounts 111, 112 (the down payment)

Credit Account 331 – Payables to sellers.

– To periodically record the instalments and late payment interests paid to the seller:

Debit Account 635 – Financial expense

Credit Account 331 – Payables to sellers.

– To record periodic payments to the seller, including the principal, instalments and late payment interests:

Debit Account 331 – Payables to sellers

Credit Accounts 111,112

3.7. When purchasing real estate for sale, the buying prices and costs directly related to the purchase of such real estate shall be recorded as follows:

Debit Account 156 – Merchandise inventory

Debit Account 133 – Deductible VAT (1332) (if any).

Credit Accounts 111, 112, 331, etc.

3.8. In case of conversion of investment property into inventory when the owner issues the decision on repair, renovation, upgrade for sale:

– When the owner issues the decision on repair, renovation, upgrade of the investment property for sale:

Debit Account 156 – Merchandise inventory (residual value of investment property)

Debit Account 214 – Depreciation of fixed assets (2147) (accrued depreciation)

Credit Account 217 – Investment properties (historical cost).

– When incurring costs of repair, renovation, upgrade of investment properties for sale:

Debit Account 154 – Work-in-progress costs

Debit Account 133 – Deductible VAT

Credit Accounts 111, 112, 152, 334, 331, etc.

– When finishing the repair, innovation or upgrade of the investment property for sale, the total cost shall be recorded as an increase in real estate inventory:

Debit Account 156 – Merchandise inventory

Credit Account 154 – Work-in-progress costs.

3.9. Value of merchandise dispatched for sale and determined as consumed:

Debit Account 632 – Costs of goods sold

Credit Account 156 – Merchandise inventory.

Concurrently, sales revenues shall be recorded as follows:

– If the merchandise is subject to indirectly collected taxes (VAT, excise duty, export duty, environment protection tax), sales revenues shall be recorded as tax-exclusive prices. The indirectly collected taxes shall be separately recorded when revenues are recorded as follows:

Debit Accounts 111, 112, 131, etc.

Credit Account 511 – Revenues from goods sale and service provision (tax-exclusive prices)

Cr 333 – Taxes and other amounts payable to the State.

– If the taxes payable are not separately recorded, the enterprise shall record the tax-inclusive revenue. The enterprise shall periodically determine tax obligations and record them as decreases in revenue as follows:

Debit Account 511 – Revenues from goods sale and service provision

Credit Account 333 – Taxes and other amounts payable to the State.

3.10. In case merchandise is processed by a contract manufacturer:

– When merchandise is delivered to the contract manufacturer:

Debit Account 154 – Work-in-progress costs

Credit Account 156 – Merchandise inventory.

– Processing costs shall be recorded as follows:

Debit Account 154 – Work-in-progress costs

Debit Account 133 – Deductible VAT (if any)

Credit Accounts 111, 112, 331, etc.

– When the processing is finished and the processed merchandise is received into inventory:

Debit Account 156 – Merchandise inventory

Credit Account 154 – Work-in-progress costs.

3.11. When merchandise inventory is delivered to customers, agencies, consigning companies, etc.:

Debit Account 157 – Goods on consignment

Credit Account 156 – Merchandise inventory.

3.12. When merchandise inventory is delivered to affiliated units for sale:

– If the affiliated unit is assigned to record revenues and costs, the affiliated unit shall:

Debit Account 632 – Costs of goods sold

Credit Account 156 – Merchandise inventory

Credit Account 333 – Taxes and other amounts payable to the State (if any).

– In case the affiliated unit is not assigned to record revenues and costs, affiliated unit shall record the value of internally circulated goods as intra-company receivables, and:

Debit Account 136 – Intra-company receivables (1368)

Credit Account 156 – Merchandise inventory

Credit Account 333 – Taxes and other amounts payable to the State (if any).

3.13. When dispatching merchandise inventory for internal use:

Debit Accounts 641, 642, 241, 211, etc.

Credit Account 156 – Merchandise inventory

Credit Account 333 – Taxes and other amounts payable to the State (if any).

3.14. In cases where the enterprise uses merchandise inventory for promotion, advertising, or donation:

a) If the merchandise inventory is used promotion, advertising, or donation without payment and without conditions (the customer does not have to purchase other products, the price of the main product is unchanged whether the customer receives the promotional product or not), the enterprise shall record the value of the merchandise used for promotion or advertising as selling expense, and:

Debit Account 641 – Selling expense

Credit Account 156 – Merchandise inventory.

b) If merchandise inventory is used for promotion or advertising but the customer has to satisfy other conditions to receive the promotional product (e.g. buy one 2 get 1 free), the enterprise shall allocate the revenue to both the sold product and the promotional product. By nature, this transaction is a trade discount, thus the value of the promotional product shall be recorded as cost of goods sold.

– When dispatching promotional goods, the enterprise shall record the value of the promotional goods as cost of goods sold, and:

Debit Account 632 – Costs of goods sold

Credit Account 156 – Merchandise inventory.

– Record the revenue from promotional goods shall on the basis of allocation of revenue to both the promoted goods and the promotional goods, and:

Debit Accounts 111, 112, 131, etc.

Credit Account 511 – Revenues from goods sale and service provision

Credit Account 3331 – VAT payable (33311) (if any).

c) If merchandise inventory is dispatched as gifts for employees and paid for by the welfare fund, the enterprise shall record revenue and costs as in normal sales transactions, and:

– Record the cost of goods sold of the merchandise gifted to employees, and:

Debit Account 632 – Costs of goods sold

Credit Account 156 – Merchandise inventory.

– Merchandise for giving using welfare fund shall be recorded to revenues as follows:

Credit Account 353 – Welfare fund (total payment)

Credit Account 511 – Revenues from goods sale and service provision

Credit Account 3331 – VAT payable (33311) (if any).

d) If merchandise inventory is dispatched as gifts or donation:

Credit Accounts 641, 642, etc.

Credit Account 156 – Merchandise inventory

Credit Account 3331 – VAT payable (33311) (if any).

3.15. When paying salaries to employees in merchandise:

– The enterprise shall record revenue as follows:

Debit Account 334 – Payables to employees (total payment)

Credit Account 511 – Revenues from goods sale and service provision

Credit Account 333 – Taxes and other amounts payable to the State (if any)

Credit Account 3335 – Personal income tax (if any).

– To record the value of merchandise paid to employees as salaries:

Debit Account 632 – Costs of goods sold

Credit Account 156 – Merchandise inventory.

3.16 When merchandise inventory is contributed as capital to subsidiary companies, joint ventures, associate companies, or other investment ventures:

Debit Accounts 221, 222,228 (at remeasured value)

Debit Account 811 – Other expense (remeasured value is smaller than book value of merchandise)

Credit Account 156 – Merchandise inventory

Credit Account 711 – Other income (remeasured value greater than book value of merchandise).

3.17. At the end of the period, when allocating purchasing costs of merchandise sold during the period:

Debit Account 632 – Costs of goods sold

Credit Account 156 – Merchandise inventory.

3.18. Any excess or shortage of merchandise is detected in any stage of business operation must be documented and investigated. The excess or shortage shall be recorded as instructed in Article 152 – Raw materials and supplies.

3.19. For real estate sold in the period, according VAT invoice or sales invoice, transfer note of real estate for sale:

– To record costs:

Debit Account 632 – Costs of goods sold

Credit Account 156 – Merchandise inventory.

Concurrently, sales revenues shall be recorded as follows:

Debit Accounts 111, 112, 131, etc.

Credit Account 511 – Revenues from goods sale and service provision

Credit Account 3331 – VAT payable (33311) (if any).

3.20. To record cost prices of unsold, expired, unneeded merchandise when they are liquidated:

Debit Account 632 – Costs of goods sold

Credit Account 156 – Merchandise inventory.

 

ACCOUNT 352 – PROVISIONS

1. Rules for accounting

a) This account is used to record of current provisions, recognition and use of provisions by enterprises.

b) Provisions shall only be recognized when the following conditions are met:

– The enterprise has a present obligation (legal obligation or constructive obligation) that is the result of a past event;

– Probable outflow of economic benefits require settlement of such obligation; and

– The value of such obligation can be reliably estimated.

c) The recognized value of a provision is the best estimate of the amount to be paid by the enterprise to settle the present obligation at the end of the accounting period.

The enterprise must disclose in the Notes to its Financial Statement the basis for estimating provisions and the information used in making such estimates e.g. best estimate of costs, owner’s assessment, historical data, valuation methods, etc.

d) Provisions shall be determined at the end of the accounting period for recognition. If the provision to be recognized in the current accounting period exceeds the provision previously recognized but not fully used, the difference shall be recorded as operating expenses of the current accounting period. If the provision to be recognized in the current accounting period is less than the provision previously recognized but not fully used, the difference must be reversed and recorded as a decrease in operating expenses of the current accounting period.

Provisions for construction warranty shall be recognized at end of the accounting year of each project, based on construction service revenue recognized during the year in accordance with construction law, and recorded as to selling expenses. If the provision exceeds actual warranty costs incurred, the excess is reversed to Account 641 – Selling expense.

dd) Only expenses related to recognized provisions may be offset against those provisions.

e) Provisions must not be recognized for future operating losses, unless they are related to an onerous contract and meet recognition criteria. If the enterprise has an onerous contract, the present obligation under such contract must be recognized and measured as a provision, which is recognized separately for each separate onerous contract. An onerous contract is one in which unavoidable costs of settling the obligations exceed the economic benefits expected to be received from such contract, in such cases the current obligation under such contract must be recognized and measured as a provision.

Example: An enterprise must recognize a provision for onerous contracts (where the committed sales volume of inventory under a non-cancellable contract exceeds the current inventory plus (+) inventory that can be purchased or produced to fulfill the contract). Such provisions shall be determined in accordance with Vietnam Accounting Standard No. 18 – Provisions, Contingent Assets and Liabilities (hereinafter referred to as “VAS 18”), and recorded as Cost of Goods Sold (COGS).

g) Common provisions include:

– Product warranty provisions;

– Construction warranty provisions;

– Enterprise restructuring provisions;

– Other provisions, including provisions for severance pay and redundancy pay severance as prescribed by law, provisions for onerous contracts; provisions form environmental restoration, etc. where unavoidable costs of fulfilling contractual obligations exceed the economic benefits expected to be received from such contracts.

h) An enterprise restructuring provision shall only be recognized when the criteria in VAS 18 are fully met. A constructive obligation only arises when the enterprise:

– Has an official and specific plan to clearly determine the enterprise’s restructuring, which includes at least 5 contents below:

+ All or a part of business concerned;

+ Important positions affected;

+ Positions, duties and estimated quantity of employees who will receive compensation for termination;

+ Expenses to be incurred; and

+ Implementation timeline.

– Has a valid anticipation of affected entities by starting implementation such plan or notifying major issues to those affected by the restructuring.

i) A restructuring provision shall only be estimated for direct expenses arising from restructuring activities, which have to meet both conditions below:

– It is needed for the restructuring;

– It is not related to the enterprise’s regular activities.

Restructuring provisions do not cover costs such as retraining or reassigning existing staff; marketing; investment in new systems and distribution networks. 

k) When recognizing provisions, depending on their nature, the enterprise shall record them related accounts as follows:

– Enterprise restructuring provisions shall be recorded as administrative expenses.

– Onerous contract provisions: Provisions related to inventory for contract fulfillment shall be recorded as cost of goods sold; provisions for pother onerous contracts shall be recorded as other expenses.

– Product and construction warranty provisions shall be recorded as selling expenses.

l) If the contract for finance lease of fixed assets requires the enterprise to carry out restoration, repair, or maintenance at the end of the lease term, the enterprise may recognize provisions for the costs of restoration, repair, or maintenance in accordance with VAS 18. Accounting of costs of restoration, repair, or maintenance shall be similar to environmental restoration provisions.

2. Structure and contents of Account 352 – Provisions

Debit side:

– Decrease in provisions when incurring expenses related to the initially recognized provisions;

– Decrease (reversal) in provisions when enterprise is certain that outflow of economic benefits is no longer required to settle the obligation.

– Decrease in provisions when the current year’s required provision is lower than the unused provision recognized in the previous year. 

Credit side:

Provisions recognized in the period.

Credit balance:

Current balance of provisions at the end of the accounting period.

Account 352 comprises 4 sub-accounts:

– Account 3521- Product warranty provisions: This account is used to recognize provisions for warranty of products and goods sold in the period;

– Account 3522 – Construction warranty provisions: This account is used to recognize provisions for warranty of construction works and items completed in the period based on construction service revenue recognized;

– Account 3523 – Enterprise restructuring provisions: This account is used to recognize provisions for restructuring activities e.g. relocation costs, employee support, etc.

– Account 3524 – Other provisions:  This account is used to recognize provisions other than those specified above, such as environmental restoration, dismantlement and site restoration; severance pay, redundancy pay; provisions for onerous contracts, etc.

The enterprise may open detailed sub-accounts Account 3524 – Other provisions, to monitor other types of appropriate for its business characteristics and management requirements.

The enterprise must disclose in the Notes to its Financial Statement the legal obligation or constructive obligation, the basis for estimating (if any) the obligation to environmental restoration, dismantlement and site restoration.

3. Accounting of some primary transactions

a) Method for accounting of product warranty provisions

– In cases where the enterprise sells goods to customers with an accompanying obligation to repair manufacturing defects during the warranty period, the enterprise shall estimate the warranty costs based on the quantity of goods sold during the period. When recognizing product warranty provisions:

Debit Account 641 – Selling expense

Credit Account 352 – Provisions (3521)

– When incurring expenses related to initially recognized product warrant provisions such as material costs, direct labor costs, fixed-asset depreciation, externally purchased services, etc.:

+ If the enterprise does not have a separate warranty department:

(+) When incurring expenses related to product warranty provision:

Debit Accounts 621, 622, 627, etc.

Debit Account 133 – Deductible VAT (if any)

Credit Accounts 111, 112, 152, 214, 331, 334, 338, etc.

(+) At the end of the period, when carrying forward product warranty expenses:

Debit Account 154 – Work-in-progress costs

Credit Accounts 621, 622, 627, etc.

(+) When repaired products are returned to customers:

Debit Account 352 – Provisions (3521)

Debit Account 641 – Selling expenses (shortfall in product warranty provisions)

Credit Account 154 – Work-in-progress costs.

+ If the enterprise has a separate warranty department:

When paying the separate warranty department for the warranty expenses:

Debit Account 352 – Provisions (3521)

Debit Account 641 – Selling expenses (negative difference between product warranty provision and actual warranty expenses)

Credit Account 336 – Intra-company payables

– At the end of the accounting period, the enterprise shall determine the product warranty provision to be recognized:

+ If the product warranty provision to be recognized in the current accounting period exceeds the unused provision recognized in the previous period, the difference shall be recognized as expenses, and:

Debit Account 641 – Selling expense

Credit Account 352 – Provisions (3521)

{>+ If the product warranty provision to be recognized in the current accounting period is less than the unused provision recognized in the previous period, the difference shall be recognized as a decrease in expenses, and:

Debit Account 352 – Provisions (3521)

Credit Account 641 – Selling expenses.

b) Method for accounting of construction warranty provision

– When estimating or determining construction warranty provisions based on construction service revenue recognized in the period:

Debit Account 641 – Selling expense

Credit Account 352 – Provisions (3522)

– When incurring expenses related to initially recognized construction warranty provisions, such as material costs, direct labor costs, fixed-asset depreciation, externally purchased services, etc.:

+ If the enterprise carries out construction warranty itself:

(+) When incurring warranty-related expenses:

Debit Accounts 621, 622, 627, etc.

Debit Account 133 – Deductible VAT (if any)

Credit Accounts 111, 112, 152, 214, 331, 334, 338, etc.

(+) At the end of the period, when carrying forward actual warranty expenses:

Debit Account 154 – Work-in-progress costs

Credit Accounts 621, 622, 627, etc.

(+) Upon delivery of the repaired construction work to the customer:

Debit Account 352 – Provisions (3522)

Debit Account 641 – Selling expense (the negative difference between the recognized provision and actual warranty expenses)

Credit Account 154 – Work-in-progress costs.

+ If the enterprise hires another enterprise to carry out construction warranty:

Debit Account 352 – Provisions (3522)

Debit Account 641 – Selling expense (the negative difference between the recognized provision and actual warranty expenses)

Debit Account 133 – Deductible VAT (if any)

Credit Accounts 112, 331, etc.

– Upon expiration of the construction warranty period, if no repair is carried out under warranty or the construction warranty provision exceeds the actual expenses, the difference shall be reversed and recorded as follows:

Debit Account 352 – Provisions (3522)

Credit Account 641 – Selling expenses.

c) Method for accounting of provisions for enterprise restructuring provisions and other provisions

– When recognizing enterprise restructuring provisions, other provisions, onerous contract provisions:

Debit Accounts 632, 642, 811, etc.

Credit Account 352 – Provisions (3523, 3524)

– When recognizing provisions for environmental restoration, dismantlement and site restoration; severance pay, etc.:

Debit Accounts 627, 641, 642, etc.

Credit Account 352 – Provisions.

– When incurring expenses related to the recognized provisions:

Debit Account 352 – Provisions (3523, 3524)

Credit Accounts 111, 112, 241, 331, etc.

d) At the end of the accounting period, the enterprise shall determine the provisions to be recognized:

– If the provisions to be recognized in the current period exceeds the unused provisions recognized in the previous period, the difference shall be recognized as expense, and:

Debit Accounts 627, 632, 641, 642, 811, etc.

Credit Account 352 – Provisions.

– If the provisions to be recognized in the current period is less than the unused provisions recognized in the previous period, the difference shall be recognized as a decrease in expense, and:

Debit Account 352 – Provisions.

Credit Accounts 627, 632, 641, 642, 811, etc.

dd) In some cases, instead of recognizing provisions, the enterprise may obtain reimbursement for all or part of its obligation from a third party (e.g. through insurance policies, compensations or suppliers’ warranty). When such reimbursement is received, the difference between the reimbursement and actual expenses incurred shall be recognized as follows:

Credit Accounts 111, 112, etc.

Credit Account 711 – Other income.

 

ACCOUNT 413 – EXCHANGE DIFFERENCE

1. General provisions

1.1. Exchange difference means a difference occurs when exchanging or converting an amount of foreign currency to another currency at different exchange rates. Exchange differences usually occur in the following cases:

– Economic transactions occurring in the period related to the trade, exchange, payment in foreign currencies;

– Remeasurement of monetary items denominated in foreign currencies at the end of the accounting period;

– Conversion of foreign currency in a financial statement into VND.

1.2. Exchange rates used in accounting

An enterprise making economic transactions in foreign currency shall record them in its accounting books and prepare its financial statements in VND or the accounting currency. The conversion of a foreign currency into VND Dong or the accounting currency must be based on the actual exchange rate or the book exchange rate, depending on the content and nature of the economic transaction and the principles for applying exchange rates specified in this Circular.

When determining tax obligations related to transactions in foreign currencies (declaring, settling and paying tax), enterprises shall comply with regulations of law on taxation.

1.2.1. Actual exchange rates

Depending on the characteristics and management requirements of each enterprise, it may choose the Telegraphic Transfer Middle (TTM) rate of the commercial bank with which the enterprise most transacts or the exchange rate approximate to the TTM rate on the transaction date of the commercial bank with which the enterprise most transacts (hereinafter referred to as “approximate rate” as the actual exchange rate.  The approximate rate must not exceed +/-1% of the TTM rate on the transaction date. For instance, the approximate rate can be the TTM rate determined daily, weekly, or monthly based on the arithmetic mean of the daily buying and selling rates of the commercial bank. The use of the approximate rate must not materially affect the enterprise’s finance and business performance in the accounting period.

In cases where the commercial bank with which the enterprise most transacts does not announce the exchange rate for the specific foreign currency, the enterprise may choose an intermediate currency for conversion into its accounting currency but must apply it consistently according to Vietnamese accounting standards. The enterprise must disclose in the Financial Statement Notes the basis for choosing that intermediate currency and the method for converting the transaction foreign currency into its accounting currency.

1.2.2. Book exchange rates

Book exchange rates include specific identification rates and weighted average exchange rates. Specific identification rates or weighted average exchange rates shall be applied according to the enterprise’s characteristics and requirements for management of its monetary items denominated in foreign currencies.

a) Specific identification book rate is the exchange rate determined when recovering receivables, other assets, or when paying liabilities in foreign currency, determined according to the specific actual exchange rate at the time of transaction (if no remeasurement has occurred) or the remeasured exchange revalued at the end of the previous period (if remeasurement has occurred).

b) Weighted average exchange rate is the exchange rate determined on the basis of the average between the value converted into the accounting currency at the actual exchange rate applied to the Debit side of money, receivables, and other asset accounts or the Credit side of liability accounts, divided by the amount of original currency at the beginning of the period and the increase in amount of original currency during the period for each item. Weighted average exchange rate can be determined at the end of the period or separately for each payment time.

The enterprise shall simultaneously track in its detailed accounting records the amount of original currency and the value converted into the accounting currency for accounts including money, demand deposits, cash in transit, receivables, payables, and other monetary items denominated in foreign currencies to serve as a basis for determining the book exchange rate for each monetary items denominated in foreign currencies. The enterprise shall separately calculate the book exchange rate of each type of money and assets (cash, demand deposits, etc.) or each debtor (customer X, seller Y, etc.) and each foreign currency (USD, EUR, JPY, etc.).

1.3. Monetary items denominated in foreign currencies

Monetary items denominated in foreign currencies are recoverable assets in foreign currencies or liabilities in foreign currencies. Monetary items denominated in foreign currencies may include:

a) Cash, demand deposits, cash in transit, term deposits in foreign currencies, and other financial investments recovered in foreign currencies;

b) Debts receivable and payable denominated in foreign currencies, except:

– Advance payments to buyers and deferred expenses in foreign currencies. If it is evident at the end of the accounting period that the seller is not able to provide goods/services and the enterprise will have the advance payments in foreign currency returned, these advance payments will be considered monetary items denominated in foreign currencies.

– Advance payments by buyers and unearned revenues in foreign currencies. If it is evident at the end of the accounting period that the enterprise is not able to provide goods/services and will have to return the unearned revenues in foreign currency to the buyers, these unearned revenues will be considered monetary items denominated in foreign currencies.

c) Loans taken or granted in any shape or form to be recovered or repaid in foreign currencies.

d) Deposits and collateral with the right to be returned in foreign currencies; deposits and collateral received that must be returned in foreign currencies.

1.4. Rules for applying exchange rates to record economic transactions in the period in foreign currencies

1.4.1. When buying or selling a foreign currency (under a spot contract, forward contract, futures contract, option contract or swap contract), it shall be the exchange rate specified in the foreign currency exchange contract between the enterprise and the commercial bank;

1.4.2. Application of actual exchange rates

a) In case where the enterprise has economic transactions in foreign currencies but the contract does not specify the exchange rate, the enterprise shall apply the actual exchange rate specified in paragraph 1.2.1 as the recorded exchange rate for economic transactions in the period. To be specific:

– Other revenue and income accounts. When advance payment is made by the buyer, it shall be recorded at the actual exchange rate at the time of advance payment (do not apply the actual exchange rate at the time of recording the unearned revenue).

– + Accounts reflecting operating expenses and other expenses accounts. In case of allocation of deferred expenses to operating expenses in the period, these expenses shall be recorded at the actual exchange rate at the time of advance payment (do not apply the actual exchange rate at the time of allocation).

– Asset accounts. In cases where advance payment is made for purchase of assets, the value of the prepaid assets shall be recorded at the actual exchange rate at the time of advance payment (do not apply the actual exchange rate at the time of asset recording).

– Debit side of cash accounts or other asset accounts; debit side of receivables; debit side of payable accounts when making advance payments to sellers.

– Credit side of payable accounts; credit side of receivable accounts when receiving advance payments from buyers;

– Equity accounts;

b) In case where the enterprise uses the actual exchange rate specified in paragraph 1.2.1 to convert the transactions in foreign currencies into its accounting currency, it may use such actual exchange rate in both the Debit side and Credit side of all monetary items denominated in foreign currencies.

1.4.3. Application of book exchange rates

Depending on each enterprise’s characteristics and management requirements, it may choose to apply the book exchange rate specified in paragraph 1.2.2 as the recorded exchange rate for economic transactions in the period for each of the following monetary items denominated in foreign currencies:

– Credit side of cash accounts or other asset accounts;

– Credit side of receivable accounts (except advance payments from buyers);

– Debit side of receivable accounts when clearing advance payments from buyers after delivery of products, goods, fixed assets, services, accepted works; Credit side of accounts for deposits, collateral and deferred expenses;

– Debit side of payable accounts (except advance payments to sellers); Credit side of payable accounts when clearing advance payments to sellers upon receipt of products, goods, fixed assets, services, accepted works.

1.4.4. Handling exchange differences in the period

When applying the exchange rates specified in paragraphs 1.4.1, 1.4.2 and 1.4.3 to transactions in foreign currencies occurring in the period, all exchange differences that occur must be recorded as financial income (in case of profits) or financial expense (in case of losses).

1.4.5. Enterprises must clearly describe their accounting policy for exchange rates applied to transactions in foreign currencies in their Financial Statement Notes, ensuring the application of exchange rates is consistent with Vietnamese accounting standards.

1.5. Rules for application of exchange rates upon remeasurement of monetary items denominated in foreign currencies at the end of the accounting period.

1.5.1. When preparing the financial statement, the enterprise must remeasure the balances of all monetary items denominated in foreign currencies at the TTM rate of the commercial bank with which the enterprise most transacts at the end of the accounting period. For balances of demand deposits in foreign currencies, the enterprise must remeasure the balances of all monetary items denominated in foreign currencies at the TTM rate of the commercial bank at which the enterprise’s deposit account is opened. The enterprise shall not remeasure part or all of the receivables denominated in foreign currencies for which doubtful debt provisions have been made.

1.5.2. All exchange differences due to of remeasurement of monetary items denominated in foreign currencies at the end of the period shall be recorded as financial expense (in case of loss) or financial income (in case of profits). The exchange difference due to remeasurement of monetary items denominated in foreign currencies at the end of the period must be presented in the Profit and Loss (P&L) Statement as the net value between the total profit and total loss due to remeasurement of monetary items denominated in foreign currencies.

– In case the exchange differences due to remeasurement of monetary items denominated in foreign currencies incurred before inauguration of a wholly state-owned enterprise having national key projects for macroeconomic stability or national defense are different from the rules specified herein (in terms of both exchange difference allocation time and allocation method, etc.), regulations of law applicable to state-owned enterprises may be applied. If pursuant to these regulations the state-owned enterprise may defer the profits/losses on exchange differences due to remeasurement of monetary items denominated in foreign currencies, the deferred profits/losses must be recorded to Account 413 – Exchange differences and gradually allocated to financial income or financial expense as the enterprise operates following these principles:

+ Accumulated exchange rate losses incurred before the enterprise’s operation shall be directly allocated from Account 413 – Exchange differences to financial expense (not through Account 242 – Deferred expenses);

+ Accumulated exchange rate profits earned before the enterprise’s operation shall be directly allocated from Account 413 to financial income (not through Account 3387 – Deferred revenues);

1.5.3. Enterprises must clearly describe the exchange rates applied to remeasurement of monetary items denominated in foreign currencies at the end of the accounting period in their Financial Statement Notes, ensuring the application of exchange rates is consistent with Vietnamese accounting standards.

1.5.4. Exchange differences must not be aggregated with value of work-in-progress.

3. Structure and contents of Account 413 – Exchange differences

Debit side:

– Losses on exchange differences due to remeasurement of monetary items denominated in foreign currencies of wholly state-owned enterprises having national key projects associated with macroeconomic stability or national defense if gradually allocated in accordance with regulations of law on state-owned enterprises.

– Allocation of profits on exchange differences due to remeasurement of monetary items denominated in foreign currencies of wholly state-owned enterprises having national key projects associated with macroeconomic stability or national defense financial income to determine periodic business outcomes as per regulations.

Credit side:

– Profits on exchange differences due to remeasurement of monetary items denominated in foreign currencies of wholly state-owned enterprises having national key projects associated with macroeconomic stability or national defense if gradually allocated in accordance with regulations of law on state-owned enterprises;

– Allocation of losses on exchange differences due to remeasurement of monetary items denominated in foreign currencies of wholly state-owned enterprises having national key projects for macroeconomic stability or national defense financial expense to determine periodic business outcomes as per regulations.

Account 413 can have Debit balance or Credit balance.

Debit balance:

Foreign exchange losses due to remeasurement of monetary items denominated in foreign currencies at the end of the accounting period reflected in Account 413 as per regulations.

Credit balance:

Foreign exchange profits due to remeasurement of monetary items denominated in foreign currencies at the end of the accounting period reflected in Account 413 as per regulations.

4. Accounting of some primary transactions

4.1. Accounting exchange differences in the period

4.1.1. Accounting exchange differences in the period if book exchange rates are used in the Credit side of the Cash account, Credit side of the Receivables account, Debit side of the foreign currency liabilities account:

a) When buying supplies, goods, fixed assets, services paid for in foreign currencies:

Debit Accounts 151, 152, 153, 156, 157, 211, 213, 217, 241, 627, 641, 642, etc. (at actual exchange rate on transaction date)

Debit Account 635 – Financial expense (in case of losses)

Credit Accounts 111, 112 (at book exchange rate of Accounts 111, 112).

Credit Account 515 – Financial income (in case of profits).

b) When buying supplies, goods, fixed assets, services with deferred payment; when taking loans or assuming internal debts, etc. in foreign currencies, according to the actual exchange rate on the transaction date:

Debit Accounts 111, 112, 152, 153, 156, 211, 627, 641, 642, etc.

Credit Accounts 331, 341, etc.

c) When advancing payment to sellers in foreign currencies to buy supplies, goods, fixed assets services:

– The advance payment to the seller shall be recorded at the actual exchange rate on the date of advance payment, and:

Debit Account 331 – Amounts payable to sellers (at the actual exchange rate on the date of advance payment)

Debit Account 635 – Financial expense (in case of losses)

Credit Accounts 111, 112 (at book exchange rate of Accounts 111, 112)

Credit Account 515 – Financial income (in case of profits).

– When receiving supplies, goods, fixed assets, services from sellers:

+ The value of supplies, goods, fixed assets, services in foreign currencies paid for in advance shall be recorded at the actual exchange rate on the date of advance payment, and:

Debit Accounts 151, 152, 153, 156, 157, 211, 213, 217, 241, 627, 641, 642, etc.

Debit Account 133 – Deductible VAT (if any)

Credit Account 331 – Amounts payable to sellers (at the actual exchange rate on the date of advance payment).

+ The value of unpaid supplies, goods, fixed assets, services shall be recorded at the actual exchange rate on the date of receipt of the goods, services, fixed assets, and:

Debit Accounts 151, 152, 153, 156, 157, 211, 213, 217, 241, 627, 641, 642, etc. (at actual exchange rate on transaction date)

Debit Account 133 – Deductible VAT (if any)

Credit Account 331 – Amounts payable to sellers (at the actual exchange rate on the transaction date).

d) When paying debts in foreign currencies (debts payable to sellers, loans, finance lease liabilities, etc.):

Debit Accounts 331, 338, 341, etc. (at book exchange rate of each liability account)

Debit Account 635 – Financial expense (in case of losses)

Credit Accounts 111, 112 (at book exchange rate of Accounts 111, 112).

Credit Account 515 – Financial income (in case of profits).

dd) When there are other revenues and incomes in foreign currencies, on the basis of actual exchange rates at the time of occurrence of such revenues and incomes:

Debit Accounts 111, 112, 131, etc.

Credit Accounts 511, 711, etc.

Credit Account 3331 – VAT payable (if any)

e) When receiving advance payment in foreign currencies from buyers for provision of supplies, goods, fixed assets, services:

– Record the advance payment from the seller at the actual exchange rate on the date of payment, and:

Debit Accounts 111, 112

Credit Account 131 – Trade receivables.

– When transferring supplies, goods, fixed assets, services to buyers:

+ Record the revenue and income in foreign currencies from the seller’s advance payment at the actual exchange rate at the time of payment, and

Credit Account 131 – Trade receivables (at the actual exchange rate on the date of payment)

Credit Accounts 511, 711

Credit Account 3331 – VAT payable (if any)

+ Record the uncollected revenue and income at the actual exchange rate at the time of occurrence, and:

Debit Account 131 – Trade receivables

Credit Accounts 511, 711

Credit Account 3331 – VAT payable (if any)

g) Upon collection of receivables in foreign currencies (trade receivables, other receivables, etc.):

Debit Accounts 111, 112 (at the actual exchange rate on the transaction date)

Debit Account 635 – Financial expense (in case of losses)

Credit Accounts 131, 138, etc. (at book exchange rate of each receivable account)

Credit Account 515 – Financial income (in case of profits).

h) When granting loans or investing in foreign currencies:

Debit Accounts 121, 128, 221, 222, 228 (at the actual exchange rate on the transaction date)

Debit Account 635 – Financial expense (in case of losses)

Credit Accounts 111, 112 (at book exchange rate of Accounts 111, 112)

Credit Account 515 – Financial income (in case of profits).

i) Deposits and collateral in foreign currencies

– When foreign currencies are used as deposits or collateral:

Debit Account 244 – Deposits and collateral (at the actual exchange rate on the date of depositing or collateralization)

Debit Account 635 – Financial expense (in case of losses)

Credit Accounts 111, 112 (at book exchange rate)

Credit Account 515 – Financial income (in case of profits).

– When retrieving the deposit or collateral:

Debit Accounts 111, 112 (at the actual exchange rate on the date of retrieval)

Debit Account 635 – Financial expense (in case of losses)

Credit Account 244 – Deposits and collateral (at the book exchange rate of Account 244 for each deposit and collateral)

Credit Account 515 – Financial income (in case of profits).

4.1.2. If the actual exchange rate is used to credit the Cash accounts and Receivable accounts, and debit the foreign currencies liabilities accounts, exchange differences in the period shall be recorded at the time of transaction or periodically depending on the enterprise’s characteristics and management requirements.

At the end of the accounting period:

a) If the balance of monetary items denominated in foreign currencies is zero (0), the enterprise must record the entirety of the exchange differences in the period as financial income or financial expense of the period:

– When recording profits on exchange differences:

Debit Accounts 111, 112, 128, 228, 131, 138, 331, 341, etc.

Credit Account 515 – Financial income

– When recording losses on exchange differences:

Debit Account 635 – Financial expense

Credit Accounts 111, 112, 128, 228, 131, 138, 331, 341, etc.

b) If the balance of monetary items denominated in foreign currencies is greater than zero (0), the enterprise shall remeasure them by multiplying the balance of each item by the exchange difference as instructed in paragraph 1.5.1 at the weighted average exchange rate of the entire period.

4.2. Accounting exchange differences due to remeasurement of monetary items denominated in foreign currencies at the end of the period.

– For monetary items denominated in foreign currencies that are demand deposits in foreign currencies, the enterprise must remeasure the balances of all monetary items denominated in foreign currencies at the TTM rate of the commercial bank at which the enterprise’s deposit account is opened at the end of the accounting period:

+ For foreign exchange profits due to remeasurement of deposits in foreign currencies:

Debit Account 112 – Demand deposits

Credit Account 515 – Financial income

+ For foreign exchange losses due to remeasurement of deposits in foreign currencies:

Debit Account 635 – Financial expense

Credit Account 112 – Demand deposits.

– Monetary items denominated in foreign currencies other than demand deposits in foreign currencies shall be at the TTM rate of the commercial bank with which the enterprise most transacts.

+ In case of foreign exchange profits:

Debit Accounts 111, 128, 228, 131, 138, 331, 341, etc.

Credit Account 515 – Financial income

+ In case of foreign exchange losses:

Debit Account 635 – Financial expense

Credit Accounts 111, 128, 228, 131, 138, 331, 341, etc.

– When presenting exchange differences due to remeasurement of monetary items denominated in foreign currencies at the end of the period in the Profit and Loss (P&L) Statement, the enterprise shall present the net value between the total profit and total loss on exchange difference due to remeasurement of monetary items denominated in foreign currencies at the end of the period.

4.3. In cases where regulations of law on state-owned enterprises permit wholly state-owned enterprises having national key projects associated with macroeconomic stability or national defense to defer the profits/losses due to remeasurement of monetary items denominated in foreign currencies before inauguration:

– Exchange rate profits shall be reflected on the Credit side of Account 413 – Exchange difference;

– Exchange rate profits shall be reflected on the Debit side of Account 413 – Exchange difference;

– Upon the enterprise’s inauguration, the exchange difference shall be recorded as financial income or financial expense of each period.