Chart of accounts for oil and gas operators in Vietnam

Chart of accounts for oil and gas operators in Vietnam (Internet image)

Article 5 of Circular 107/2014/TT-BTC stipulates that the O&G Operator in Vietnam shall apply the chart of accounts prescribed in the applicable corporate accounting policy with certain existing accounts to be revised, renamed and new accounts to be added as follows:

- Adding Account 246 – “Prospecting, exploration and resource volume estimate costs”. This account reflects oil and gas search, exploration and resource volume estimate costs and progress of settlement thereof. The search, exploration and resource volume estimate costs referred to in the oil and gas agreement shall be recorded in detail depending on specific oil and gas agreements.

- Adding Account 247 – “Oil and gas development costs”. This account reflects costs incurred during oil and gas development, and final settlement of oil and gas development capital value referred to in oil and gas agreements.

- Adding Account 248 – “Other costs”. This account reflects costs incurred during the oil and gas production stage under specific oil and gas agreements.

- Adding Account 249 – “Unrecoverable costs”: This account reflects costs incurred in the stage of search, prospecting, exploration, reserve estimate or evaluation, oilfield development and production of which recovery is not allowed under terms and conditions of the oil and gas agreement, and costs which are suspended or eliminated during an audit in accordance with the PVN’s audit report.

- Adding Account 251 – “Recovered costs”: This account reflects an amount of costs which have been recovered by using the cost oil on a first-incurred, first-recovered basis as prescribed by the oil and gas agreement.

- Renaming Account 341 – “Long-term loan” as “Other Contractor’s paid-in capital”: This account reflects the monetary amount contributed by other Contractor other than the Parent company – an operator participating in the oil and gas agreement. Account 341 – Other Contractor’s paid-in capital is divided into 2 sub-accounts, including:

- Renaming Account 411 – “Business capital source” as “Operator Parent company’s paid-in capital”. This account reflects availability of, and increase or decrease in, the amount of capital contribution by the operator Parent company as prescribed by the oil and gas agreement. Account 411 – Operator Parent company’s paid-in capital is divided into 2 subaccounts, including:

- Renaming Account 642 – “General and administrative expenses” as “Administrative overhead costs”. This account reflects costs incurred by managerial and administrative divisions of the O&G Operator during a given accounting period.

The chart of accounts, including accounts subject to the abovementioned revisions, shall be issued in the Appendix 01 hereto. Where the O&G Operator carries out other economic transactions, relevant accounts which are not listed in the chart of accounts referred to in this Circular but listed in the chart of accounts referred to in the applicable corporate accounting policy shall not be subject to application for the Ministry of Finance’s approval.

More details can be found in Circular 107/2014/TT-BTC, which comes into force from  August 22, 2014.

Thuy Tram

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