Joint Circular No. 46 TT/LB/TC-NH guides the handling of price discrepancies for materials and goods in inventory checks.

JOINT CIRCULAR

Guidelines for handling price discrepancies of inventory materials and goods.

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Implementing Circular No. 726/V13 dated July 13, 1987 of the Council of Ministers on the handling of price discrepancies of inventory materials and goods; the Ministry of Finance - State Bank of Vietnam hereby provides specific guidelines as follows:

1/ Organizing inventory and determining price discrepancies of inventory materials and goods:

Starting from July 1, 1987, whenever the State decides to change prices, production and business enterprises, material supply units, commerce, transportation, and independently accounting service enterprises under central control or local management (hereinafter referred to collectively as enterprises) must organize an inventory of materials and goods in stock (including raw materials and work-in-progress and finished products in stock); materials and goods in transit, including those distributed according to plans by the central government, produced locally, imported, or through joint ventures and associations, to re-determine the prices of inventory materials and goods based on new prices.

Each enterprise must fully implement the inventory of materials and goods in stock in terms of quantity and value; determine the total value of inventory materials and goods at old prices and at new prices to identify the price discrepancy of inventory materials and goods at the time of inventory.

The price discrepancy of inventory materials and goods identified during the inventory is a source of capital of the State used to supplement working capital shortages for enterprises and to supplement bank credit. This price discrepancy is recorded in Account 15 "Revaluation of Materials and Goods" for processing as stipulated in Point 2 below.

2. Handling price discrepancies of inventory materials and goods:

Within the latest period of 15 days after the inventory date, enterprises must report the results (with quantities and values), the price discrepancy of inventory materials and goods, to the superior management agency (Ministry, Department in charge, Corporation, or Association of Enterprises), and send copies to the financial and banking agencies at the same level. Immediately thereafter, the enterprise, together with the financial and banking agencies at the same level, will organize and handle the price discrepancy of inventory materials and goods as follows:

a) Based on the revised working capital quota for 1987 approved according to the new price level, calculate the self-owned working capital and consider it planned self-owned capital according to the ratio specified in Joint Circular No. 46 of the Ministry of Finance - State Bank dated December 6, 1986. If the actual self-owned working capital and considered self-owned working capital (surplus of 85.2 + debt of planned quota) is insufficient according to the new quota, the price discrepancy of inventory materials and goods will first be used to supplement the self-owned working capital within the new quota; accounting procedures shall be carried out according to the accounting regulations prescribed by the Ministry of Finance.

b) Any remaining price discrepancy (if any) will be handled by the enterprise applying for a loan within the credit limit from the basic bank.

Upon receiving the loan, the basic bank will record the received price discrepancy in Account 07012 of the Central Bank Accounting Department. The State Bank of Vietnam is responsible for consolidating the loans received from enterprises using the price discrepancy of inventory materials and goods and transferring them to the Ministry of Finance to process the revenue and expenditure through the budget to provide the State Bank with funds for lending within the credit limit.

Example: Handling the price discrepancy of inventory materials and goods:

- The revised working capital quota for 1987 calculated according to the new price level for the enterprise is 200 million dong, of which the self-owned capital and considered self-owned capital is 100 million dong; the maximum loanable amount from the bank is 100 million (50% ratio).

- The actual self-owned capital and considered self-owned capital up to the inventory date due to price changes is 45 million dong.

- Current inventory of circulating assets at the time of inventory:

+ At old prices: 150 million dong

+ At new prices: 250 million dong

+ Price discrepancy of inventory materials and goods: 100 million dong (250 million - 150 million), calculated and processed as follows:

- Supplementing self-owned capital and considered self-owned capital according to the new price level for the enterprise (100 million - 45 million): 55 million dong

- Applying for a loan from the basic bank (increasing borrowing within the credit limit): 45 million dong

c) Apart from the purposes mentioned above, no levels of the budget, sectors, or enterprises may use this price discrepancy for any other purpose (except in special cases approved by the Chairman of the Council of Ministers).

4. The provisions stated in Point 2 above apply to handling the price discrepancy of inventory materials and goods to ensure the increased working capital quota requirements for enterprises and to increase the source of bank credit; all other price discrepancies must be submitted to the State budget according to the current regulations of the Ministry of Finance.

5. This Circular takes effect for price discrepancies of inventory materials and goods from July 1, 1987 onwards, and applies to all economic base production and business enterprises, material supply, transportation, commerce, and service enterprises under all state-owned sectors at both central and local levels that have generated price discrepancies of inventory materials and goods each time the State decides to adjust prices.

Enterprises, Departments in charge, and financial and banking agencies at all levels must strictly comply with the provisions of this Circular. Any provisions of levels, sectors, and localities regarding the handling of price discrepancies of inventory materials and goods that contradict this Circular are not enforceable. During implementation, if there are difficulties, they should be reported promptly to the Ministry of Finance - State Bank of Vietnam for resolution./.

CHAIRMAN OF THE STATE BANK

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