JOINT CIRCULAR No. 45/TT-LB GUIDING THE INVENTORY AND HANDLING OF THE RESULTS OF THE INVENTORY OF MATERIALS, GOODS, AND CASH BALANCES AT 00:00 ON OCTOBER 1, 1987

 

JOINT CIRCULAR

Guidelines for inventory and handling the results of inventory of materials, goods, and cash funds at 00:00 on October 1, 1987

Implementing Directive No. 269/Chairman of the Council of Ministers dated September 22, 1987, of the Chairman of the Council of Ministers regarding the inventory of materials, goods, and cash funds in the state-owned economic sector for the period of October 1, 1987, the Ministry of Finance - General Statistics Office guides the inventory, handling, and accounting of the inventory results as follows:

1/ Basic requirements for inventory:

Based on a thorough understanding of the significance, purpose, and principles of the material, goods, and cash fund inventory campaign specifically outlined in the Chairman of the Council of Ministers' directive, the basic requirements set forth for the October 1, 1987, 00:00 inventory are as follows:

- Accurately grasp the entire quantity, quality, and value of existing materials and goods; all sources of cash funds and cash funds currently held by each economic base unit, each industry, each locality, and the entire state-owned economic sector.

- Reassess the working capital quotas of units in accordance with the new pricing system, accurately determine any excess working capital at the time of inventory to provide grounds for recommending measures to ensure normal production and business operations for each unit.

- Conduct the inventory promptly, thoroughly, and strictly adhere to current regulations on inventory. Perform actual physical counts, weigh, measure, and count directly (except where regulations permit reporting stock levels based on accounting records, but actual observations must be made with spot checks); reconcile accounting records with actual inventory figures accurately; identify the causes and responsibilities for discrepancies; promptly handle inventory results and recommend measures to address issues arising during the inventory process. Report inventory results and their handling truthfully and timely.

2/ Scope of Inventory:

The scope of this inventory of materials, goods, and cash funds includes production and business units (industrial, agricultural, forestry, fisheries; basic construction; transportation; domestic trade, foreign trade, supply of materials, services...) and independent economic accounting institutions (institutes, stations, farms...) within the state-owned and public-private joint sectors under central and local authorities, including production and business units within armed forces.

3/ Objects of Inventory:

- All types of raw materials, materials, fuels, spare parts for repair and replacement, labor tools belonging to circulating assets, goods at production, supply, domestic trade, foreign trade, service... units.

- Materials and goods in transit (including goods in transport, lying at docks, ports, or awaiting inspection...) owned by units that have been sent out or entrusted to others for storage or sale; materials and goods for processing, manufacturing, joint ventures, and collaborations...

- Work-in-progress (including work-in-progress in production, manufacturing, construction), semi-finished products, and finished products.

- Various types of funds and cash funds under the unit's control reflected in both formal and informal books:

+ Bank deposits: including all amounts owned by the unit deposited in the State Bank, Investment Bank, Foreign Trade Bank for production and business capital, basic construction investment capital, major repair capital, special-purpose capital, and other unit funds. For deposits in the Foreign Trade Bank, foreign currency amounts must be inventoried and converted to Vietnamese dong using the current internal settlement rate. Unused foreign currency funds available for use by the unit must also be determined and reported separately.

+ Cash balances: including the unit's cash balance; basic construction cash balance (if there is a separate accounting system); cash balances for auxiliary production activities, other business cash balances; unspent wage and bonus balances remaining in workshops and departments; amounts in transit; securities, stamps, and vouchers with monetary value; foreign currency balances kept at the unit.

4/ Time of Inventory:

- Uniform inventory time across the country: 00:00 on October 1, 1987.

For materials and goods that are less volatile or bulky in units that conducted a physical inventory at 00:00 on July 1, 1987, with inventory reports and handling results, the actual quantities and values from the July 1, 1987, inventory can be used, combined with actual import and export data for July, August, and September to calculate the quantities and values of materials and goods present in the unit up to October 1, 1987.

For materials and goods that were adjusted according to the new price before October 1, 1987, the calculation will be based on the actual inventory (physical items and value) at the time of price adjustment (+) added to the increase and (-) subtracted from the decrease from the price adjustment date to October 1, 1987, as the inventory figures for this period.

- The inventory process may start before the designated time and must be completed before October 20, 1987.

5/ Inventory methods:

- Before closing the accounting books, determine the quantities and values of materials and goods, as well as the cash funds and capital balances according to the accounting records up to 00:00 on October 1, 1987.

- The inventory of cash funds must be conducted at the beginning of the working day on October 1, 1987. Strict adherence to inventory procedures and principles is required.

When inventorying cash balances, they must be classified and the total amount and each type of currency in the balance must be determined (including foreign currency).

Bank deposits must be reconciled directly and confirmed by bank staff.

Securities and stamps, vouchers must be inventoried as rigorously as cash.

- For materials and goods, a direct physical count or direct verification must be performed for each item and type. A record must be established to confirm the inventory, clearly stating the actual quantities and values of materials and goods compared to accounting records; identify the quantity and value of stagnant, slow-moving materials and goods not yet resolved; determine the actual quantity and value of damaged, substandard, or deteriorated materials and goods.

- For unfinished products that need to determine the quantity and degree of completion of the product. Specifically, for unfinished products of construction units, including main and auxiliary construction works; it is necessary to determine the volume and value of construction work completed according to cost items.

6/ Calculate and determine the price difference of inventory materials and goods:

The adjustment of material and goods prices this time will be carried out gradually step by step before or after October 1, 1987. Due to this characteristic, the calculation of the value of materials and goods during this inventory period will be carried out as follows:

- In all cases, each time there is a decision by the State to adjust the price of materials and goods, a physical inventory must be conducted on the actual quantity of those materials and goods, calculating their value according to the old price and new price; determining the price difference to record in the accounting books according to the current regulations at the time of price adjustment.

+ For materials and goods whose prices were adjusted before October 1, 1987, the price difference must also be consolidated in the report of this inventory period.

+ For materials and goods for which the price adjustment decision was made after October 1, 1987, the unit must recalculate the actual quantity of materials and goods at the time of price adjustment to serve as the basis for calculating the value according to the new price of those materials and goods and determine the price difference. The quantity and value of materials and goods (according to the old price) at the time of price adjustment are calculated by adding the figures at the inventory date (October 1, 1987) with the increase and subtracting the decrease arising from October 1, 1987 to the time of the new price.

- Determining the value according to the new price and the price difference for unfinished products and finished goods in stock is quite complex. Therefore, to facilitate price adjustments, the calculation method is specified as follows:

+ Take October 31, 1987 as the date to calculate the value of unfinished products and finished goods in stock according to the new price.

+ The new value of unfinished products and finished goods in stock is determined according to the coefficient method: first, the price difference coefficient of materials must be determined by dividing the total price difference of materials by the total value of materials according to the old price; then multiply the coefficient obtained with the cost items of unfinished products and finished goods. The difference between the new value and the old value of unfinished products and finished goods is summarized together with the price difference of materials and goods to determine the total price difference of the enterprise.

- For labor tools belonging to circulating assets allocated 50% that were issued and used before the price adjustment date, the unit bases on the new price to adjust the remaining 50% price (see guidance in Circular No. 67 TC/CĐKT dated October 12, 1981 of the Ministry of Finance).

The price differences of materials and goods inventoried in this period are summarized up to October 31, 1987, including:

+ Price difference due to price adjustment before October 1, 1987

+ Price difference due to price adjustment at the time of October 1, 1987

+ Price difference due to price adjustment from after October 1, 1987 to October 31, 1987.

7/ Handling the results of the inventory:

Handling the results of this inventory period needs to be carried out promptly and conclusively right at the grassroots units. Specifically:

- Based on the inventory results, units must immediately implement necessary measures to mobilize and put into effective use the existing material resources, goods, and monetary capital for the purpose of developing production and business operations; while recalculating and determining the new standard cost and circulating capital prices according to the new price level and related plan indicators, ensuring the normal operation of the unit.

- All cases of surplus or shortage of materials, goods, and capital funds; funds outside the books; improper, illegal, and ineffective use of materials, capital, foreign currency... must be strictly handled according to the current regulations and clearly define individual or collective responsibility.

Regarding the procedures and methods of accounting, they must be implemented in accordance with the provisions in Circular No. 16 TC/CĐKT dated October 20, 1980 "guidelines for accounting the results of comprehensive inventory and revaluation of assets and materials at 00:00 on September 1, 1980", Circular No. 164 TC/CĐKT dated March 17, 1986 "guidelines for accounting the results of inventory of materials and goods at 00:00 on June 19, 1986" of the General Statistics Office, and Circular on inventory of technical materials at 00:00 on July 1, 1987 of the Ministry of Finance.

- Materials and goods that are substandard, deteriorated, and those identified as stagnant, slow-moving raw materials, and by-products shall be handled according to Decision No. 177/HĐBT dated May 26, 1987 of the Council of Ministers and Circular No. 40 TC/TNVT dated August 5, 1987 of the Ministry of Finance.

- For price differences arising from the adjustment of material and goods prices, they shall be processed and recorded as follows:

When price differences arise due to price adjustment:

+ If it is a price difference of inventory materials and goods, the accountant records:

Debit Account - Materials and Goods (05, 06,..., 40, 41)

Credit Account 15 - Revaluation of Materials and Goods

+ If it is a price difference of unfinished products, self-manufactured finished goods, the accountant records:

Debit Accounts 20, 21, 23, 30 or 31

Credit Account 15 - Revaluation of Materials and Goods.

By October 31, 1987, calculate the entire price difference arising from the adjustment of prices in this inventory period. The handling of the price difference of materials and goods in inventory shall be carried out according to the guidelines of the Joint Circular of the Ministry of Finance and the State Bank of Vietnam.

8/ Indicators and reporting forms:

a) System of indicators:

- For materials and goods:

+ Physical quantities: quantity of materials and goods according to accounting books and actual inventory; excess or shortage; substandard, deteriorated materials and goods, stagnant, slow-moving.

+ Value: calculated according to the old price, new price, and price difference due to adjustment.

- For capital and fund in cash:

+ Cash balance according to accounting books and actual inventory (separated into Vietnamese dong and foreign currency, cash of each type of fund); excess or shortage.

+ Deposits in banks of various types (including savings deposits if any).

+ Foreign currency reflected in original currency and converted into Vietnamese dong (including foreign currency in the fund, deposited in banks, lent or borrowed if any).

The above indicators are summarized by each grassroots unit, each ministry, each locality, and the entire state-owned economic sector.

b) Reporting forms:

In accordance with the above criteria, two types of reports for this inventory period are specified:

- Report on the results of the inventory at 00:00 on October 1, 1987.

- Report on price differences and handling of price differences up to October 1, 1987.

All grassroots economic units, Ministries, General Departments, and localities must prepare and submit both types of reports.

c) Deadline for submission and preparation of reports:

- The report on the results of the inventory must be submitted no later than October 20, 1987, for grassroots units, and no later than October 31, 1987, for Ministries, General Departments, provinces, and cities.

- The report on price differences and handling of price differences for grassroots units must be submitted no later than November 15, 1987, and for Ministries, General Departments, provinces, and cities, no later than November 25, 1987.

(The contents of the forms and methods for preparing the reports are detailed in the attached annex).

The Ministry of Finance and the General Statistics Department request that all Ministries, General Departments, State Councils, People's Committees of provinces and cities, and directly governed special zones implement this based on the spirit and content of Directive No. 269 issued by the Chairman of the Council of Ministers on September 22, 1987, and this circular. Any difficulties encountered during implementation should be promptly reported to the Ministry for study and resolution.

 

Place of Receipt:

- Ministries, ministerial-level agencies

  agencies under the Council of Ministers

- Provincial People's Committees,

  directly under the Central Government

- Council of Ministers

- Vietnam General Confederation of Labor

- Ho Chi Minh City Youth Union

- Vietnam Women's Union

- Central Propaganda and Education Committee, National Front Committee

  - Central Trade Union Committee, Central Economic Committee, Central Finance and Foreign Trade Committee.

  People's Daily Newspaper

- Provincial Finance Departments, Statistics Inspection Branches

  and National Financial Management Office, Provincial Statistical Bureaus

- To be filed: Ministry of Finance - General Statistics Department.