Regulations on accounting for recovered costs applicable to oil and gas industry operators in Vietnam

Regulations on accounting for recovered costs applicable to oil and gas industry operators in Vietnam (Internet image)

Clause 2, Article 10 of Circular 107/2014/TT-BTC stipulates the accounting for recoverable costs applicable to oil and gas industry operators in Vietnam as follows:

- Accounting principles

The O&G Operator shall consolidate and keep track of details of recoverable costs over prospecting, exploration and resource volume estimate stages; oil and gas development and extraction stages. The O&G Operator can divide the Account 251 – Recoverable costs – into secondary or tertiary accounts where appropriate for its managerial requirements.

- Contents, composition of, and method for posting entries to, the Account 251 – Recoverable costs

+ Debit: Carryover of costs already recovered at prospecting, exploration and resource volume estimate stages; oil and gas development and extraction stages upon termination of the oil and gas agreement.

+ Credit: Recoverable costs incurred at prospecting, exploration and resource volume estimate stages; oil and gas development and extraction stages during a specified accounting period.

+ Credit balance: Amount of recoverable costs accrued as of the reporting date.

- Method of accounting for recoverable costs

+ When the Contractor recovers oil and gas operating costs by using the cost oil, the following entries shall be posted to relevant accounts as follows:

++ Debit A/C 3412 – Paid-in capital recovered by Contractor parties

++ Debit A/C 4112 – Paid-in capital recovered by the operator Parent company

++ Credit A/C 251 – Recoverable costs.

+ The O&G Operator shall carry over cost amounts which have already been recovered upon termination of the oil and gas agreement by posting the following entries:

++ Debit A/C 251 – Recoverable costs

++ Credit A/C 246, 247, 248.

More details can be found in Circular 107/2014/TT-BTC, which comes into force from January 1, 2015.

Thuy Tram

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