Circular No. 201/2009/TT-BTC guides the method of handling foreign exchange rate differences in enterprises operating in Vietnam, applicable to enterprises except those specialized in buying and selling foreign currencies. This circular specifies detailed regulations on accounting and handling foreign exchange rate differences during production and business activities, basic construction investment, dissolution, liquidation of enterprises, and end-of-period balance revaluation.
적용 범위
Enterprises established and operating in Vietnam (except for enterprises specialized in buying and selling foreign currencies).
핵심 사항
- Enterprises → shall account for foreign exchange rate differences according to the current accounting system regulations, with the conversion rate from foreign currency to Vietnamese Dong implemented according to Decision No. 15/2006/QĐ-BTC.
- During the period of fixed asset construction investment, foreign exchange rate differences are reflected cumulatively and gradually allocated to specific income or production and business expenses over five years.
- Foreign exchange rate differences arising when settling receivables or payables will be recorded as income or expense in the specific fiscal period.
- At the end of the accounting period, foreign exchange rate differences due to the revaluation of year-end foreign currency balances will be handled differently depending on the type of account item and the term of debt.
- Foreign exchange rate differences arising from foreign currency transactions will be recorded as financial income or expense in the period.
🌐 이 문서의 사회적 영향
- Positive impact: Helps enterprises handle foreign exchange rate differences clearly and transparently, avoiding abuse to evade taxes.
- Negative impact: May increase the accounting burden on enterprises when they must comply with complex regulations.
- Enterprises will have a higher responsibility in managing foreign currencies and exchange rates, thereby reducing financial risks.
❓ 자주 묻는 질문
How are foreign exchange rate differences handled when settling long-term payables?
If the actual payment exchange rate is higher than the exchange rate recorded in the books, the foreign exchange rate difference will be accounted for as financial expense in the year. In the case of a lower exchange rate, the foreign exchange rate difference will be accounted for as financial income.
How are foreign exchange rate differences arising from end-of-period balance revaluation handled?
For long-term debts, increased foreign exchange rate differences will be accounted for as financial expense in the year and may be allocated to subsequent years. In the case of decreased foreign exchange rate differences, it will be accounted for as financial income.
How are foreign exchange rate differences arising when settling short-term payables handled?
Not accounted for as expense or income but carried forward on the financial statement, reversed at the beginning of the next year to eliminate the balance.
How are foreign exchange rate differences arising when settling long-term payables handled?
If the actual payment exchange rate is higher, the foreign exchange rate difference will be accounted for as financial expense in the year. In the case of a lower exchange rate, the foreign exchange rate difference will be accounted for as financial income.
How are foreign exchange rate differences arising when settling long-term receivables handled?
If the actual payment exchange rate is lower, the foreign exchange rate difference will be accounted for as financial expense in the year. In the case of a higher exchange rate, the foreign exchange rate difference will be accounted for as financial income.
전문
CIRCULAR
Guidelines for Handling Foreign Exchange Rate Differences in Enterprises
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Pursuant to the Law on Corporate Income Tax 2008;
Pursuant to Decree No. 124/2008/NĐ-CP dated December 11, 2008 of the Government detailing and guiding the implementation of certain provisions of the Law on Corporate Income Tax;
Pursuant to Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;
Pursuant to Decree No. 09/2009/NĐ-CP dated February 5, 2009 of the Government promulgating the Financial Management Regulations for State-Owned Companies and the Management of State Capital Invested in Other Enterprises;
Implementing the directive of Deputy Prime Minister Nguyen Sinh Hung in Circular No. 2225/VPCP-KTTH dated April 9, 2009 of the Government Office regarding the handling of foreign exchange rate differences, the Ministry of Finance issues guidelines for handling foreign exchange rate differences in enterprises as follows:
Part A
GENERAL PROVISIONS
Article 1. Object and Scope of Application:
This Circular applies to enterprises established and operating in Vietnam in accordance with the law. This Circular does not apply to enterprises specializing in buying and selling foreign currencies.
For enterprises established based on Agreements signed between the Government of the Socialist Republic of Vietnam and the Governments of other countries, if the Agreement contains provisions on handling foreign exchange rate differences that differ from the guidance provided in this Circular, such provisions shall be implemented according to the Agreement.
Article 2. The terms used in this Circular are understood as follows:
1. "Foreign currency" means a monetary unit different from the accounting currency of an enterprise.
2. "Foreign Currency Transactions" refers to transactions conducted in foreign currency and for pricing purposes.
3. "Exchange Rate" refers to the rate at which two types of currency are exchanged (hereinafter referred to as the exchange rate).
4. "Foreign Exchange Rate Difference" is the difference between the recorded accounting exchange rate and the exchange rate used for conversion at the time of adjustment for the same type of foreign currency.
Article 3. Enterprises conducting foreign currency transactions shall record foreign exchange rate differences in accordance with the current accounting regulations.
The conversion rate of foreign currency into Vietnamese Dong shall be carried out in accordance with Decision No. 15/2006/QĐ-BTC dated March 20, 2006 of the Minister of Finance on the issuance of Accounting Standards for Enterprises.
Article 4. For foreign currencies for which the State Bank of Vietnam has not published a conversion rate into "Dong" Vietnamese, they shall be uniformly converted through US dollars based on the transaction rate of the bank where the enterprise maintains its account at the actual time of occurrence or revaluation of the balance of foreign currency monetary items at the end of the period.
Part B
SPECIFIC PROVISIONS
Article 5. All foreign exchange rate differences arising during the production and business operations period, including construction investment activities (for enterprises engaged in both production and business operations and construction investment activities), shall be immediately recorded as financial expenses or financial activity income in the period.
Article 6. Content of Handling Foreign Exchange Rate Differences:
1. Handling foreign exchange rate differences of foreign currency transactions in the period:
1.1. During the construction phase to form fixed assets of newly established enterprises:
During the construction phase to form fixed assets of newly established enterprises, foreign exchange rate differences arising when paying off monetary items with a foreign currency origin for investment construction and foreign exchange rate differences arising when revaluing monetary items with a foreign currency origin at the end of the fiscal year shall be cumulatively reflected separately on the Balance Sheet. When the fixed asset is completed and put into use, the foreign exchange rate differences arising during the construction phase shall be gradually allocated into income or production and business costs specifically:
- In the case of increased foreign exchange rate differences, they shall be gradually allocated into financial income of the enterprise, with the allocation period not exceeding five years from the date the project is put into operation.
- In the case of decreased foreign exchange rate differences, they shall be gradually allocated into financial expenses of the enterprise, with the allocation period not exceeding five years from the date the project is put into operation.
1.2. During the period of ongoing production and business operations:
During the production and business operations phase, including investment construction to form fixed assets of operating enterprises, foreign exchange rate differences arising when paying off monetary items with a foreign currency origin will be recorded as income or expenses in the specific fiscal year:
a. For receivables:
- In the case of increased foreign exchange rate differences, they shall be recorded as financial income in the period.
- In the case of decreased foreign exchange rate differences, they shall be recorded as financial expenses in the period.
b. For payables:
- In the case of decreased foreign exchange rate differences, they shall be recorded as financial income in the period.
- In the case of increased foreign exchange rate differences, they shall be recorded as financial expenses in the period.
1.3. During the liquidation and dissolution period of the enterprise:
a. For receivables:
- In the case of increased foreign exchange rate differences, they shall be recorded as liquidation income of the enterprise.
- In the case of decreased foreign exchange rate differences, they shall be recorded as liquidation expenses of the enterprise.
b. For payables:
- In the case of decreased foreign exchange rate differences, they shall be recorded as liquidation income of the enterprise.
- In the case of increased foreign exchange rate differences, they shall be recorded as liquidation expenses of the enterprise.
1.4. Foreign exchange rate differences arising in the period due to the purchase and sale of foreign currency:
- In the case of increased foreign exchange rate differences, they shall be recorded as financial income in the period.
- In the case of decreased foreign exchange rate differences, they shall be recorded as financial expenses in the period.
2. Handling foreign exchange rate differences arising from the revaluation of foreign currency balances at the end of the period:
At the end of the accounting period, enterprises must convert cash, deposits, funds in transit, receivables, and payables with a foreign currency origin into "Vietnamese Dong" according to the rate specified in Article 3 of this Circular. The difference between the post-conversion rate and the rate currently recorded in the accounting books shall be handled as follows:
2.1. For foreign exchange rate differences arising from the revaluation of year-end balances, which are cash, deposits, funds in transit, short-term receivables (within one year) with a foreign currency origin at the time of preparing financial statements, these shall not be recorded as expenses or income but shall be reflected as a balance on the financial statements, reversed at the beginning of the next year to eliminate the balance.
2.2. For foreign exchange rate differences arising from the revaluation of year-end balances of long-term receivables (over one year) with a foreign currency origin at the time of preparing financial statements, they shall be handled as follows:
a. For long-term receivables:
For receivables in foreign currency, the company must revalue the year-end balances of various foreign currencies, after offsetting, the remaining difference shall be handled as follows:
- In case of an increase in the difference, it shall be recorded as financial income for the year.
- In case of a decrease in the difference, it shall be recorded as financial expense for the year.
b. For long-term liabilities:
For foreign currency payable debts, the company must re-evaluate the end-of-year balance of each type of foreign currency, after offsetting, the remaining difference shall be handled as follows:
- In case of an increase in the exchange rate difference, the exchange rate difference shall be recorded as financial expense for the year and included in reasonable expenses when calculating corporate income tax. If recording the exchange rate difference as an expense results in the company's business outcome being a loss, then part of the exchange rate difference can be allocated to the following year so that the company does not incur a loss, but the amount recorded as an expense for the year must be at least equal to the exchange rate difference of the long-term foreign currency payable balance for that year. The remaining exchange rate difference will be monitored and continued to be allocated to expenses for subsequent years but not exceeding 5 years at most.
- In case of a decrease, it shall be recorded as financial income.
When settling individual long-term receivables and payables, if the actual exchange rate at settlement is higher or lower than the exchange rate recorded in the books, the resulting exchange rate difference shall be handled as provided for in Point 1.2 Clause 1 Article 6 of this Circular.
Part C
IMPLEMENTING PROVISIONS
Article 7. This Circular takes effect 45 days from the date of signature and replaces Circular No. 44/TC-TCDN dated July 8, 1997 of the Ministry of Finance guiding the handling of exchange rate differences in state-owned enterprises and Circular No. 38/2001/TT-BTC dated June 5, 2001 of the Ministry of Finance amending and supplementing Circular No. 44/TC-TCDN dated July 8, 1997.
During the implementation process, if there are difficulties or obstacles, please promptly reflect them to the Ministry of Finance for consideration and resolution./.
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