Circular No. 24/2017/TT-BTC guiding the Accounting System for Cooperatives and Cooperative Federations

CIRCULAR

Guidelines for Cooperative Accounting and Cooperative Federation Accounting

Pursuant to the Accounting Law No. 88/2015/QH13 dated November 20, 2015;

Pursuant to Decree No. 215/2013/NĐ-CP dated December 13, 2013 of the Government on the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Director of the Department of Accounting and Auditing Regime,

The Minister of Finance issues this Circular guiding the accounting regime for cooperatives and cooperative federations.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular guides the principles of journal entries, preparation, and presentation of financial statements for cooperatives and cooperative federations (hereinafter referred to as cooperatives); it does not apply to the determination of tax liabilities of cooperatives towards the State budget.

Article 2. Applicability

1. This Circular applies to all cooperatives operating in all fields and industries of production and business.

2. For large-scale cooperatives with numerous transactions that are not covered by this Circular, they may choose to apply the accounting regime for small and medium-sized enterprises issued pursuant to Circular No. 133/2016/TT-BTC dated August 26, 2016 of the Ministry of Finance guiding the accounting regime for small and medium-sized enterprises (hereinafter referred to as Circular No. 133/2016/TT-BTC) and any subsequent amendments or replacements thereof (if any). The selection of the accounting regime must be consistently applied throughout the fiscal year and must be notified to the tax authority managing the cooperative.

Article 3. General Principles

1. In case cooperatives choose to apply Circular No. 133/2016/TT-BTC, they must comply with all provisions of this Circular regarding accounting vouchers, journals, accounting accounts, financial reports, and other regulations. If cooperatives have economic transactions related to internal credit activities, subsidies, and support from the State to cooperatives, and other matters not provided for in Circular No. 133/2016/TT-BTC, they must follow the provisions of this Circular.

2. In case cooperatives revert to applying the accounting regime issued pursuant to this Circular, they must implement it from the beginning of the fiscal year and must notify the Tax Authority again.

Chapter II

 SPECIFIC PROVISIONS

Article 5. Provisions on accounting accounts

1. Accounting accounts are used to classify and systematize economic and financial transactions according to their economic content.

2. Accounting accounts applicable to cooperatives include account types within the chart (including account types from 1 to 6 and account type 9) and account types outside the chart (account type 0). For accounts within the chart, double-entry bookkeeping must be applied (economic transactions are recorded on the debit side of at least one account and on the credit side of at least another account). For accounts outside the chart, single-entry bookkeeping must be applied (economic transactions are recorded only on the debit side or credit side of one account without corresponding to another account).

3. Regarding modifications to the accounting account system

a) In cases where cooperatives need to add primary or secondary accounts, or modify primary or secondary accounts concerning names, codes, contents, and methods of recording specific economic transactions, such changes must be approved in writing by the Ministry of Finance before implementation.

b) Cooperatives may open additional secondary and tertiary accounts for accounts without specified secondary or tertiary accounts in the list of accounting account systems stipulated in Section I of Appendix 1 attached to this Circular to meet management requirements without needing approval from the Ministry of Finance.

4. The list of accounting account systems, contents, structures, accounting principles, and accounting recording methods are detailed in Appendix 1 attached to this Circular.

Article 5. Provisions on accounting vouchers

1. Accounting vouchers are documents and objects carrying information reflecting economic and financial transactions that have occurred and been completed, serving as the basis for recording in the accounting books.

2. Accounting vouchers must be established clearly, completely, promptly, accurately, easily verifiable, controllable, and reconcilable.

3. The cooperative may proactively develop and design accounting voucher formats but must ensure that they contain all essential contents of accounting vouchers as prescribed by the Accounting Law, suitable for its operational characteristics and management requirements, except where otherwise provided by law.

4. Other matters related to accounting vouchers shall be implemented in accordance with the provisions of the Accounting Law, guiding documents of the Accounting Law, other relevant laws, and the provisions in this Circular.

5. The list of accounting vouchers, accounting voucher formats, and methods of establishing accounting vouchers are guided in Appendix 2 issued together with this Circular.

Article 6. Provisions on accounting books

1. Accounting books are used to record, systematize, and retain all economic and financial transactions that have occurred and are related to the cooperative.

2. Accounting books must clearly state the name of the cooperative; the name of the book; the date, month, year of establishment; the date, month, year of closing; signatures of the person who established the book, the chief accountant, and the legal representative of the cooperative; page number; and stamped with a matching seal.

3. Other matters related to accounting books shall be implemented in accordance with the provisions of the Accounting Law, guiding documents of the Accounting Law, other relevant laws, and the provisions in this Circular.

4. The list of accounting books, accounting book formats, and methods of recording accounting books are guided in Appendix 3 issued together with this Circular.

Article 7. Provisions on Financial Statements

1. Financial statements of the accounting unit are used to summarize and explain the financial situation and business results of the Cooperative.

2. Other matters related to Financial Statements shall be implemented in accordance with the provisions of the Accounting Law, guiding documents of the Accounting Law, other relevant laws, and the provisions in this Circular.

3. The system of Financial Statements, Financial Statement formats, contents, and methods of preparing and presenting Financial Statements and other related matters are guided in Appendix 4 issued together with this Circular.

Chapter III

IMPLEMENTATION

Article 8. Transfer of balances on accounting books

1. Agricultural, forestry, fishery, and salt production cooperatives applying the accounting system issued pursuant to Circular No. 24/2010/TT-BTC dated February 23, 2010 of the Ministry of Finance shall implement the transfer of balances of accounts on accounting books as follows:

- Short-term term deposits reflected in detail under Account 121 - Short-term financial investments and long-term term deposits reflected in detail under Account 2218 - Other long-term financial investments shall be transferred to Account 1211 - Term Deposits. Other short-term financial investments reflected in detail under Account 121 - Short-term financial investments and other long-term financial investments reflected under Account 2212 - Joint venture capital, Account 2213 - Investments in associated companies, and detailed Account 2218 - Other long-term financial investments shall be transferred to Account 1218 - Other financial investments;

- Balances of principal receivables from loans reflected in the detailed accounts of Account 122 - Loans to members (Accounts 1221, 1222, 1223) shall be transferred to Account 13211 - Principal Receivables from Loans. Balances of interest receivables from loans reflected in Account 1318 shall be transferred to Account 13212 - Interest Receivables from Loans;

- Balances of receivables reflected in Accounts 1311 - Member Receivables, 1312 - Non-member Customer Receivables shall be transferred to Account 131 - Customer Receivables.

- Balances of detailed Account 1318 - Other Receivables (excluding receivables from internal credit activities' interest) shall be transferred to Account 138 - Other Receivables.

- Balances of Account 142 - Prepaid Expenses Short-term, balances of Account 242 - Prepaid Expenses Long-term shall be transferred to Account 2421 - Prepaid Expenses.

- Balances of detailed accounts of Account 241 - Construction in Progress (Accounts 2411, 2412, 2413) shall be transferred to Account 2422 - Construction in Progress.

- Balances of Account 153 - Tools and Equipment shall be transferred to Account 152 - Materials and Equipment. Balances of detailed accounts of Account 155 - Products and Goods (Accounts 1551, 1552) shall be transferred to Account 156 - Finished Goods and Merchandise.

- Balances of provisions reflected in detailed accounts of Account 159 - Provisions (Accounts 1592, 1593) shall be transferred to Account 229 - Provision for Losses on Assets.

- Balances of detailed accounts of Account 311 - Borrowings (Accounts 3111, 3112) shall be transferred to Account 341 - Borrowing Liabilities.

- Balances of Account 322 - Members' Deposits shall be transferred to Account 33211 - Principal Borrowing Liabilities; Balances of interest liabilities from internal credit activities reflected in Account 3388 - Other Payables and Accruals shall be transferred to Account 33212 - Interest Borrowing Liabilities.

- Balances of Accounts 33311 - VAT Output Tax, 33312 - VAT Import Tax shall be transferred to Account 3331 - VAT Payable.

- Balances of Accounts 3332 - Special Consumption Tax, 3333 - Export and Import Taxes, 3335 - Personal Income Tax, 3336 - Resource Tax, 3337 - Property and Land Rent Tax, 3339 - Fees and Other Payables shall be transferred to Account 3338 - Other Taxes, Fees, and Other Payables.

- Balances of Accounts 3341 - Member Payables, 3348 - Other Employee Payables shall be transferred to Account 334 - Employee Payables.

- Balances of Accounts 3383 - Social Insurance, 3384 - Health Insurance, 3389 - Unemployment Insurance, and other payables based on salary (if any) reflected in Account 3388 - Other Payables and Accruals shall be transferred to Account 335 - Salary-Based Payables.

- Balances of Accounts 3386 - Advance Deposits, 3387 - Unearned Revenue, 3388 - Other Payables and Accruals (excluding interest liabilities from internal credit activities and other salary-based payables) shall be transferred to Account 338 - Other Payables.

- Balances of Accounts 4111 - Members' Capital Contributions and 4113 - Received Joint Venture Capital shall be transferred to Account 4111 - Members' Capital Contributions.

- Balances of Accounts 4112 - Cooperative Accumulated Capital and 4118 - Other Capital shall be transferred to Account 4118 - Other Capital.

- Balances of Account 4114 - State Support Investment Capital shall be transferred to Account 442 - Non-Repayable Subsidies and Assistance from the State.

- The balances of the accounts 4181- Production and Business Development Fund, account 4182- Contingency Fund, and account 4188- Other Funds shall be transferred to account 418- Various Funds belonging to the owners' equity.

- The balances of account 4211- Undistributed Profit of the previous year and account 4212- Undistributed Profit of the current year shall be transferred to account 421- Undistributed Post-Tax Profit.

2. Non-agricultural cooperatives shall apply the accounting system issued pursuant to Decision No. 48/2006/QD-BTC dated September 14, 2006, and Circular No. 138/2011/TT-BTC dated October 4, 2011, of the Ministry of Finance, and shall implement the transfer of balances on the accounting books as follows:

- The balances of account 1113- Gold, Silver, Precious Metals, and Gemstones, and the balances of account 1123- Gold, Silver, Precious Metals, and Gemstones shall be transferred for monitoring on accounts 152- Materials and Tools, 156- Finished Goods and Merchandise (for gold, silver, precious metals, and gemstones classified as inventory), and account 1218- Other Financial Investments (for gold, silver, precious metals, and gemstones invested for profit).

- Short-term time deposits reflected on the detailed ledger of account 121- Short-term Financial Investments and long-term time deposits reflected on the detailed ledger of account 2218- Other Long-term Financial Investments shall be transferred to account 1211- Time Deposits. Other short-term financial investments reflected on the detailed ledger of account 121- Short-term Financial Investments and other long-term investments reflected on account 2212- Joint Venture Capital Contributions, account 2213- Investments in Associated Companies, and the detailed ledger of account 2218- Other Long-term Financial Investments shall be transferred to account 1218- Other Financial Investments.

- The balances of account 1381- Assets Missing Awaiting Disposal; short-term guarantees and pledges, and other receivables reflected on account 1388- Other Receivables, and the balances of account 244- Long-term Guarantees and Pledges shall be transferred to account 138- Other Receivables.

- Balances of Account 142 - Prepaid Expenses Short-term, balances of Account 242 - Prepaid Expenses Long-term shall be transferred to Account 2421 - Prepaid Expenses.

- The balances of account 241- Uncompleted Construction Projects shall be transferred to account 2422- Uncompleted Construction Projects.

- The balances of tools and equipment reflected on account 153- Tools and Equipment shall be transferred to account 152- Materials and Tools. The balances of finished goods reflected on account 155- Finished Goods shall be transferred to account 156- Finished Goods and Merchandise.

- The balances of provisions reflected on the detailed accounts of account 159- Provisions (accounts 1591, 1592, 1593), and the balances of provisions for the reduction of long-term financial investment reflected on account 229 shall be transferred to account 229- Provision for Loss of Assets.

- The balances of accounts 311- Short-term Loans, account 315- Due Long-term Debts, account 3411- Long-term Loans, and account 3412- Due Long-term Debts shall be transferred to account 341- Debts to be Repaid.

- The balances of accounts 33311- Output VAT, account 33312- Import VAT shall be transferred to account 3331- VAT Payable.

- Balances of Accounts 3332 - Special Consumption Tax, 3333 - Export and Import Taxes, 3335 - Personal Income Tax, 3336 - Resource Tax, 3337 - Property and Land Rent Tax, 3339 - Fees and Other Payables shall be transferred to Account 3338 - Other Taxes, Fees, and Other Payables.

- The balances of account 335- Expenses Payable and the balances of account 352- Provision for Expenses Payable shall be transferred to account 338- Other Debts Payable.

- The balances of account 3381- Excess Assets Awaiting Resolution, the balances of account 3387- Unexecuted Revenue, and the balances of account 3388- Other Debts and Payments Payable (excluding payments according to salaries) shall be transferred to account 338- Other Debts Payable.

- The balances of accounts 3382- Union Fees, account 3383- Social Insurance, account 3384- Health Insurance, account 3389- Unemployment Insurance, and other salary-related payments reflected on account 3388- Other Debts and Payments Payable shall be transferred to account 335- Salary-Related Payments Payable.

- The balances of account 3386- Short-term Guarantees and Pledges Received, and the balances of account 3414- Long-term Guarantees and Pledges Received shall be transferred to account 338- Other Debts Payable.

- The balances of account 351- Employment Assistance Fund (if any) shall be transferred to account 418- Various Funds belonging to the owners' equity.

- The balances of account 3353- Welfare Fund that has formed Fixed Assets shall be transferred to account 3532- Welfare Fund. The balances of account 3534- Management Incentive Fund shall be transferred to account 3531- Reward Fund.

- The balances of account 356- Science and Technology Development Fund shall be transferred to account 338- Other Debts Payable.

- The balances of account 4111- Owners' Investment Capital shall be transferred to account 4111- Members' Capital Contributions.

- The balances of account 4211- Undistributed Profit of the previous year and account 4212- Undistributed Profit of the current year shall be transferred to account 421- Undistributed Post-Tax Profit.

- The balances of other accounts related to internal credit activities of non-agricultural cooperatives, if any, shall be applied with the principle of transferring balances on the accounting books as stipulated in Clause 1 of this Article for implementation.

3. Any other contents currently reflected in detail on relevant accounts that contradict this Circular shall be adjusted in accordance with the provisions of this Circular.

4. During the process of transferring balances on the accounting books, if there are any difficulties, cooperative unions are requested to report to the Ministry of Finance for research and resolution.

Article 9. Effective Date

1. This Circular shall take effect for the fiscal year starting from or after January 1, 2018. All conflicting regulations shall be abolished. This Circular replaces the applicable content for cooperatives in Decision No. 48/2006/QD-BTC dated September 14, 2006, of the Minister of Finance guiding the accounting system for small and medium enterprises, Circular No. 138/2011/TT-BTC dated October 4, 2011, of the Ministry of Finance amending and supplementing Decision No. 48/2006/QD-BTC, and Circular No. 24/2010/TT-BTC dated February 23, 2010, of the Ministry of Finance guiding the accounting system applicable to agricultural, forestry, fisheries, and salt production cooperatives.

2. Ministries, sectors, People's Committees, Departments of Finance, Tax Bureaus of provinces and centrally governed cities shall be responsible for implementing and guiding cooperatives to comply with this Circular.

3. During the implementation process, if there are any difficulties, they are requested to report to the Ministry of Finance for research and resolution./.