Circular No. 24/2022/TT-BTC amends and supplements certain provisions of Circular No. 48/2019/TT-BTC dated August 8, 2019, issued by the Minister of Finance, guiding the establishment and handling of provisions for inventory write-downs, investment losses, bad debts, and product warranties, goods, services, and construction projects at enterprises.

 CIRCULAR

Amending and supplementing certain provisions of Circular No. 48/2019/TT-BTC dated August 8, 2019, issued by the Minister of Finance guiding the establishment and handling of inventory write-down reserves, investment losses, bad debt receivables, and product, goods, service, and construction project warranties at enterprises
Pursuant to Decree No. 218/2013/NĐ-CP dated December 26, 2013 of the Government detailing and guiding the implementation of the Law on Corporate Income Tax;
Pursuant to Decree No. 91/2014/NĐ-CP dated October 1, 2014 of the Government amending and supplementing certain provisions of decrees on tax; Decree No. 12/2015/NĐ-CP dated February 12, 2015 of the Government detailing the implementation of the Law amending and supplementing certain provisions of laws on tax and amending and supplementing certain provisions of decrees on tax;
The Minister of Finance issues this Circular amending and supplementing certain provisions of Circular No. 48/2019/TT-BTC dated August 8, 2019, issued by the Minister of Finance guiding the establishment and handling of inventory write-down reserves, investment losses, bad debt receivables, and product, goods, service, and construction project warranties at enterprises
Article 1. Amending and supplementing certain provisions of Circular No. 48/2019/TT-BTC guiding the establishment and handling of inventory write-down reserves, investment losses, bad debt receivables, and product, goods, service, and construction project warranties at enterprises

1. Amending and supplementing Point a Clause 1 Article 5 as follows:

"a) The object for establishing reserves is securities issued by domestic economic organizations in accordance with the law, owned by the enterprise, listed or registered for trading on the domestic securities market, freely traded on the market, and whose actual market price at the time of preparing the annual financial report is lower than the value of the securities investment recorded in the accounting books.

"1. Principles, authority to decide and methods of transferring state capital at joint stock companies and limited liability companies with two or more members shall be implemented in accordance with Article 38 of Decree No. 91/2015/NĐ-CP; Clause 15 and Clause 16, Article 1 of Decree No. 32/2018/NĐ-CP; Clause 18 and Clause 19, Article 2 and Clause 4 and Clause 5, Article 5 of Decree No. 140/2020/NĐ-CP.

At the proposal of the Director of the Department of Banking and Financial Institutions;

The objects for establishing reserves mentioned above do not include government bonds, government-guaranteed bonds, and local government bonds."

2. Amending and supplementing Point b Clause 1 Article 5 as follows:

"b) The amount of reserve for securities investment write-downs is calculated according to the following formula:

Amount of reserve for securities investment write-downs

Value of securities investment recorded in the enterprise's accounting books at the time of preparing the annual financial report

Quantity of securities owned by the enterprise at the time of preparing the annual financial report

Actual market price of securities

- For corporate bonds that have been listed or registered for trading, the bond price on the market is the most recent transaction price at the Stock Exchange within 10 days before the preparation of the annual financial report. In case there is no transaction within 10 days before the preparation of the annual financial report, the enterprise shall not establish a reserve for this investment."

1. This Circular takes effect from May 25, 2022.

2. Any remaining balances of reserves for government bonds, government-guaranteed bonds, and local government bonds that enterprises have established before the effective date of this Circular (if any) shall be reversed and recorded as a reduction in expenses when preparing the 2022 annual financial report.

3. During the implementation process, if there are difficulties or obstacles, organizations and individuals should reflect them to the Ministry of Finance for consideration and resolution./.

- To be filed with VT, Department of State Treasury (250b).

Article 2. Implementation clause

1. This Circular takes effect from May 25, 2022.

2. The reserve balances for government bond investments, government-guaranteed bond investments, and local government bond investments that enterprises have established before the date this Circular takes effect (if any) shall be reversed and recorded as a reduction in expenses at the time of preparing the financial statements for the year 2022.

3. During the implementation process, if there are difficulties or obstacles, organizations and individuals are requested to report them to the Ministry of Finance for consideration and resolution./.