Circular No. 53/2016/TT-BTC Amending and Supplementing Certain Provisions of Circular No. 200/2014/TT-BTC dated December 22, 2014 of the Ministry of Finance guiding the accounting system for enterprises

CIRCULAR

Amending and supplementing certain provisions of Circular No. 200/2014/TT-BTC dated December 22, 2014 of the Ministry of Finance guiding the accounting system for enterprises
Regarding the accounting system for enterprises

Pursuant to the Accounting Law dated June 17, 2003;

Pursuant to Decree No. 129/2004/NĐ-CP dated May 31, 2004 of the Government detailing and guiding the implementation of certain provisions of the Accounting Law in business activities;

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 amending and supplementing certain provisions of Circular No. 200/2014/TT-BTC dated December 22, 2014 guiding the accounting system for enterprises.

Article 1. Amending and supplementing certain provisions of Circular No. 200/2014/TT-BTC as follows:

1. Point g Clause 1 Article 15 of Circular No. 200/2014/TT-BTC shall be amended and supplemented as follows:

"g) When liquidating or selling trading securities (by type of security), the cost of trading securities shall be determined according to either the first-in-first-out method or the weighted average cost method.

The enterprise must consistently apply the chosen method to calculate the cost of trading securities during the fiscal year. In case of changing the method for calculating the cost of trading securities, the enterprise must disclose and explain in accordance with the accounting standard."

2. Replace the phrase "weighted average cost" and "book value of shares exchanged calculated according to the weighted average cost method" with the phrase "cost at point d and point e Clause 3 Article 15 of Circular No. 200/2014/TT-BTC.

3. Clause 1.3 Article 69 of Circular No. 200/2014/TT-BTC shall be amended and supplemented as follows:

"1.3. Principles for determining exchange rates:

a) Actual transaction rate for transactions in foreign currency occurring during the period:

- Actual transaction rate when buying or selling foreign currency (spot foreign currency contracts, forward contracts, futures contracts, options contracts, swap contracts): Is the rate agreed upon in the foreign currency purchase or sale contract between the enterprise and the commercial bank;

- In case the contract does not specify the payment rate:

+ The enterprise records the accounting books according to the actual transaction rate: When recording capital contribution or received capital contribution, it is the purchase rate of the foreign currency from the bank where the enterprise has an account to receive investment funds on the contribution date; When recording accounts receivable, it is the purchase rate of the commercial bank designated by the enterprise for the customer to pay at the time of transaction; When recording accounts payable, it is the sale rate of the commercial bank where the enterprise plans to conduct the transaction at the time of transaction; When recording purchases of assets or expenses paid immediately in foreign currency (not through payable accounts), it is the purchase rate of the commercial bank where the enterprise conducts the payment.

+ In addition to the actual transaction rate mentioned above, the enterprise may choose an approximate transaction rate that is close to the average transfer rate of the commercial bank where the enterprise frequently conducts transactions. The approximate rate must ensure a difference not exceeding +/-1% compared to the average transfer rate. The average transfer rate is determined daily, weekly, or monthly based on the average of the purchase and sale transfer rates of the commercial bank each day.

The use of the approximate rate must ensure that it does not significantly affect the financial situation and operating results of the accounting period.

b) Actual transaction rate when revaluing monetary items denominated in foreign currency at the time of preparing the Financial Statements:

- Actual transaction rate when revaluing monetary items denominated in foreign currency classified as assets: Is the purchase rate of the foreign currency from the commercial bank where the enterprise frequently conducts transactions at the time of preparing the Financial Statements. For foreign currency deposits with banks, the actual rate when revaluing is the purchase rate of the bank where the enterprise has an account for foreign currency.

- Actual transaction rate when revaluing monetary items denominated in foreign currency classified as liabilities: Is the sale rate of the foreign currency from the commercial bank where the enterprise frequently conducts transactions at the time of preparing the Financial Statements;

- Units within a group may apply a common rate specified by the Parent Company (must be closely aligned with the actual transaction rate) to revalue monetary items denominated in foreign currency arising from internal transactions.

- If the enterprise uses the approximate rate specified in point a of this clause to record transactions in foreign currency occurring during the period, at the end of the accounting period, the enterprise uses the transfer rate of the commercial bank where the enterprise frequently conducts transactions to revalue monetary items denominated in foreign currency. This transfer rate can be the purchase rate, the sale rate, or the average transfer rate of the commercial bank. "

4. Replace the phrases "moving weighted average rate," "book rate" with the phrase "moving weighted average rate or actual transaction rate" at point e Clause 1 Article 12, point đ Clause 1 Article 13, point e Clause 1 Article 18, point c Clause 1 Article 51, Clause 1.4 and points b, c Clause 1.5 Article 69 of Circular 200/2014/TT-BTC.

5. Clause 4.1 Article 69 of Circular No. 200/2014/TT-BTC shall be amended and supplemented as follows:

"4.1. Accounting for exchange rate differences arising during the period (including exchange rate differences in the pre-operational phase of enterprises not wholly owned by the State):

a) When purchasing materials, goods, fixed assets, services paid in foreign currency, record:

Debit Accounts 151, 152, 153, 156, 157, 211, 213, 217, 241, 623, 627, 641, 642

(actual transaction rate on the transaction date)

Debit Account 635 - Financial Expenses (foreign exchange loss)

Credit Accounts 111 (1112), 112 (1122) (according to the bookkeeping rate).

Credit Account 515 - Financial Revenue (foreign exchange gain).

b) When purchasing materials, goods, fixed assets, services from suppliers without immediate payment, or borrowing or receiving internal debt in foreign currency, based on the actual transaction rate on the transaction date, record:

Debit Accounts 111, 112, 152, 153, 156, 211, 627, 641, 642...

There are accounts 331, 341, 336...

c) When advancing foreign currency to sellers to purchase materials, goods, fixed assets, or services:

- The accountant records the advance payment for sellers at the actual transaction exchange rate at the time of advance, noting:

Debit Account 331 - Amounts Payable to Sellers (actual exchange rate on the advance date)

Debit Account 635 - Financial Expenses (foreign exchange loss)

Credit Accounts 111 (1112), 112 (1122) (at the accounting exchange rate)

Credit Account 515 - Financial Revenue (foreign exchange gain).

- Upon receiving materials, goods, fixed assets, or services from sellers, the accountant records according to the principle:

+ For the value of materials, goods, fixed assets, or services corresponding to the amount of foreign currency advanced to sellers, the accountant records at the actual transaction exchange rate at the time of advance, noting:

Debit Accounts 151, 152, 153, 156, 157, 211, 213, 217, 241, 623, 627, 641, 642

Credit Account 331 - Amounts Payable to Sellers (actual exchange rate on the advance date).

+ For the value of materials, goods, fixed assets, or services still owed and not yet paid, the accountant records at the actual transaction exchange rate at the time of occurrence (transaction date), noting:

Debit Accounts 151, 152, 153, 156, 157, 211, 213, 217, 241, 623, 627, 641, 642

(actual transaction rate on the transaction date)

Credit Account 331 - Amounts Payable to Sellers (actual exchange rate on the transaction date).

d) When settling debts payable with foreign currency (debts to sellers, loans, financial leases, internal debts...):

Debit Accounts 331, 336, 341,... (accounting exchange rate)

Debit Account 635 - Financial Expenses (foreign exchange loss)

Credit Accounts 111 (1112), 112 (1122) (accounting exchange rate).

Credit Account 515 - Financial Revenue (foreign exchange gain).

e) When revenue or other income occurs in foreign currency, based on the actual transaction exchange rate at the time of occurrence, noting:

Debit Accounts 111 (1112), 112 (1122), 131... (actual exchange rate on the transaction date)

Credit Accounts 511, 711 (actual exchange rate on the transaction date).

g) When receiving advance payments from buyers in foreign currency to provide materials, goods, fixed assets, or services:

- The accountant records the advance payment from buyers at the actual transaction exchange rate at the time of receipt, noting:

Debit Accounts 111 (1112), 112 (1122)

Credit Account 131 - Amounts Receivable from Customers.

- When transferring materials, goods, fixed assets, or services to buyers, the accountant records according to the principle:

+ For the portion of revenue or income corresponding to the amount of foreign currency received in advance from buyers, the accountant records at the actual transaction exchange rate at the time of receipt, noting:

Debit Account 131 - Amounts Receivable from Customers (actual exchange rate at the time of receipt of advance payment from buyers)

Credit Accounts 511, 711.

+ For the portion of revenue or income that has not yet been collected, the accountant records at the actual transaction exchange rate at the time of occurrence, noting:

Debit Account 131 - Amounts Receivable from Customers

Credit Accounts 511, 711.

h) When collecting overdue receivables in foreign currency (receivables from customers, internal receivables, other receivables,...):

Debit Accounts 111 (1112), 112 (1122) (actual exchange rate on the transaction date)

Debit Account 635 - Financial Expenses (foreign exchange loss)

Credit Accounts 131, 136, 138 (accounting exchange rate)

Credit Account 515 - Financial Revenue (foreign exchange gain).

i) When lending or investing with foreign currency:

Debit Accounts 121, 128, 221, 222, 228 (actual exchange rate on the transaction date)

Debit Account 635 - Financial Expenses (foreign exchange loss)

Credit Accounts 111 (1112), 112 (1122) (accounting exchange rate)

Credit Account 515 - Financial Revenue (foreign exchange gain).

k) Foreign currency deposits as collateral or guarantee

- When depositing foreign currency as collateral or guarantee, noting:

Debit Account 244 - Collateral, Mortgage, Deposit, Guarantee (actual exchange rate at the time of occurrence)

Debit Account 635 - Financial Expenses (foreign exchange loss)

Credit Accounts 111 (1112), 112 (1122) (accounting exchange rate)

Credit Account 515 - Financial Revenue (foreign exchange gain).

- When reclaiming collateral or guarantee deposits:

Debit Accounts 111 (1112), 112 (1122) (actual exchange rate when reclaiming collateral or guarantee)

Debit Account 635 - Financial Expenses (foreign exchange loss)

Credit Account 244 - Collateral, Mortgage, Deposit, Guarantee (accounting exchange rate)

Credit Account 515 - Financial Revenue (foreign exchange gain).

l) In cases where enterprises use the actual transaction exchange rate to record the credit side of monetary capital accounts, the credit side of receivable accounts, and the debit side of payable accounts in foreign currency, the recording of foreign exchange differences arising during the period shall be carried out at the time of occurrence or periodically depending on the nature of business operations and management requirements. At the end of the accounting period:

- Monetary items denominated in foreign currency without remaining balances in original currency must transfer all foreign exchange differences arising during the period into financial revenue or financial expenses of the reporting period:

+ Transfer foreign exchange gains, noting:

Debit Accounts 1112, 1122, 128, 228, 131, 136, 138, 331, 341,...

Credit Account 515 - Financial Revenue.

+ Transfer foreign exchange losses, noting:

Debit Account 635 - Financial Expenses

Credit Accounts 1112, 1122, 128, 228, 131, 136, 138, 331, 341,...

- Monetary items denominated in foreign currency with remaining balances in original currency must revalue these monetary items at the end of the period, and the accounting for foreign exchange differences due to revaluation of monetary items denominated in foreign currency at the end of the period shall be carried out in accordance with Clause 4.2 Article 69 of Circular No. 200/2014/TT-BTC.

m) Enterprises must clearly explain their choice of applying exchange rates in the financial statement disclosures, and the selection of exchange rates must ensure consistency in accordance with accounting standards.

6. Article 120 of Circular No. 200/2014/TT-BTC is amended and supplemented as follows:

"Article 120. Translation of Accounting Documents into Vietnamese

1. Accounting documents recorded in a foreign language, when used for accounting purposes in Vietnam, must be translated into Vietnamese. Documents that occur infrequently or frequently but have different contents must be fully translated. Documents that occur frequently and have similar contents must be fully translated for the first instance, and from the second instance onwards, only the main contents such as the name of the document, the name of the issuing entity and individual, the name of the receiving entity and individual, the economic content of the document, the position of the signatory on the document... The translator must sign and clearly state their name and bear responsibility for the translation into Vietnamese. The translated version of the document must be attached to the original document in the foreign language.

2. Documents accompanying accounting vouchers such as contracts, files attached to payment vouchers, investment project files, final accounts reports, and other related documents shall not be translated into Vietnamese except when required by competent state agencies.

Article 2. Effectiveness and Implementation

1. This Circular takes effect from the date of issuance and applies to fiscal years beginning on or after January 1, 2016. Enterprises may choose to apply the foreign exchange rates prescribed in Article 1 of this Circular for the 2015 Financial Statements.

2. Other provisions on exchange rates in Circular No. 200/2014/TT-BTC shall be implemented in accordance with the principles set forth in this Circular.

3. In case of any difficulties during implementation, enterprises are requested to notify the Ministry of Finance for study and resolution./.