When are the financial statements of public sector entities prepared in Vietnam?

When are the financial statements of public sector entities prepared in Vietnam?

Pursuant to Clauses 1 and 4, Article 7 of Circular 107/2017/TT-BTC regulating the financial reports as follows:

Financial Statements

1. Entities preparing financial statements

After the fiscal year ends, public sector entities must close their accounts and prepare financial statements to submit to the competent authorities and related units as regulated.

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4. Reporting period

The unit must prepare financial statements at the end of the fiscal year in accordance with the Accounting Law.

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According to the above regulation, it is evident that financial statements are prepared at the end of the fiscal year as stipulated by the Accounting Law to be submitted to the competent authorities and related units.

When are the financial statements of public sector entities prepared in Vietnam? (Image from the Internet)

What are the principles and requirements for preparing financial statements of public sector entities in Vietnam?

Pursuant to Clause 3, Article 7 of Circular 107/2017/TT-BTC regulating the principles and requirements for preparing financial statements of public sector entities as follows:

- Principles:

+ Financial statements should be based on accounting figures after the accounts are closed. They must be prepared in accordance with the principles, contents, methods as regulated and presented consistently across accounting periods. If the financial statements are presented differently across accounting periods, clear explanations must be provided.

+ Financial statements must be signed by the preparer, chief accountant, and the head of the accounting unit. The signatories are responsible for the contents of the financial statements.

- Requirements:

+ Financial statements must objectively and truthfully reflect the content and value of report indicators; they should be presented in a structured, systematic manner regarding the financial situation, operational results, and cash flows of the unit.

+ Financial statements must be prepared promptly, within the stipulated timeframe for each type of unit, and must be clearly presented, easily understandable, and precise in information and data.

+ The information and data reported must be continuous, with the data from the current period following the data from the previous period.

Is it compulsory for public sector entities to disclose their financial statements in Vietnam?

Pursuant to Clause 7, Article 7 of Circular 107/2017/TT-BTC, the disclosure of financial statements by public sector entities is regulated as follows:

Financial Statements

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7. Disclosure of financial statements

Financial statements are disclosed according to the legal regulations on accounting and other relevant legal documents.

Additionally, Article 31 of the Accounting Law 2015 specifies the content of financial statement disclosure as follows:

- Accounting units using the state budget must disclose information on state budget revenues and expenditures following the State Budget Law.

- Accounting units not using the state budget must disclose the settlement of annual financial revenues and expenditures.

- Accounting units using contributions from the public must disclose the purpose of mobilization, use of contributions, contributors, mobilization rates, usage results, and settlement of revenues and expenditures for each contribution.

- Accounting units engaged in business activities must disclose the following:

+ Asset status, liabilities, and owner's equity;

+ Business performance results;

+ Establishment and use of reserves and funds;

+ Employee income;

+ Other contents as regulated by law.

- Financial statements of accounting units that the law requires to be audited must be disclosed along with the audit report of the auditing organization.

Shall accounting units close their accounts before preparing financial statements in Vietnam?

Pursuant to Point a, Clause 7, Article 5 of Circular 107/2017/TT-BTC governing bookkeeping as follows:

Regulations on Bookkeeping

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7. Closing accounts

Closing accounts involves summing up to calculate the total debits, credits, and the ending balance for each accounting account or the total of receipts, expenditures, cash balances, entries, exits, and stock balances.

a) Period of account closure

- The cash fund ledger must close daily. After closing, a reconciliation must be conducted between the accountant's cash ledger, the treasurer's cash ledger, and the actual cash held to ensure accuracy and consistency. At the end of the month, a Cash Inventory Sheet must be prepared, which is stored with the cash ledger of the last day of the month after inventory.

- Bank and treasury ledger accounts must close at the end of the month to reconcile the figures with banks and treasuries. The Reconciliation Sheet with banks and treasuries (certified by banks, treasuries) is stored with the bank and treasury ledgers monthly.

- Accounting units must close their books at the end of the fiscal year before preparing financial statements.

- Additionally, accounting units must close their books in case of unexpected inventories or other cases as regulated by law.

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According to the above regulation, accounting units must close their books at the end of the fiscal year before preparing financial statements.