What are the rules for preparing and presenting financial statements for SMEs when changing accounting cycle in Vietnam?
- What are the rules for preparing and presenting financial statements for SMEs when changing accounting cycle in Vietnam?
- What are the rules for preparing financial statements in case of change in accounting currency in Vietnam?
- What are the rules for preparing and presenting financial statements upon divisions, consolidation and merger of enterprises in Vietnam?
What are the rules for preparing and presenting financial statements for SMEs when changing accounting cycle in Vietnam?
Pursuant to Article 75 of Circular 133/2016/TT-BTC, there are 3 rules for preparing and presenting financial statements when changing accounting cycle:
- The change of the accounting cycle must comply with provisions of the Law on Accounting. If the annual accounting cycle is changed, accountants shall prepare a separate financial statement for the period between the old and new accounting periods.
Example: An enterprise’s accounting period of 2014 is the same as the calendar year. In 2015, its accounting period begins on April 1 of the year to March 31 of the succeeding year. In this case a separate financial statement for the period from January 01, 2015 to March 31, 2015 must be prepared.
- Regarding financial position statement: all assets, liabilities and equity of the previous period shall be recorded as opening balance of the new period.
- Regarding income statement and cash flow statement: data from the change of accounting cycle to the end of the first period shall be recorded in “This period” column; data of the last 12 months shall be recorded in “Previous period” column.
Example: In the same situation, data from April 1, 2014 to March 31, 2015 will be recorded in “Previous column” of the income statement.
What are the rules for preparing and presenting financial statements for SMEs when changing accounting cycle in Vietnam?
What are the rules for preparing financial statements in case of change in accounting currency in Vietnam?
Pursuant to Article 79 of Circular 133/2016/TT-BTC has the following regulations:
Rules for preparing financial statements in case of change in accounting currency
1. When the accounting currency is changed, in the first period from the day on which such change is made, accountants shall convert the balances in accounting books at the closing average transfer rate of the enterprise’s regular bank on the date of change.
2. The average transfer rate of the preceding period shall apply to comparable information in the income statement and cash flow statement of the period in which accounting currency is changed.
3. When changing accounting currency, the enterprise shall specify the reasons and its effects to the financial statement on the notes to financial statement.
Thus, rules for preparing financial statements in case of change in accounting currency include:
- When the accounting currency is changed, in the first period from the day on which such change is made, accountants shall convert the balances in accounting books at the closing average transfer rate of the enterprise’s regular bank on the date of change.
- The average transfer rate of the preceding period shall apply to comparable information in the income statement and cash flow statement of the period in which accounting currency is changed.
- When changing accounting currency, the enterprise shall specify the reasons and its effects to the financial statement on the notes to financial statement.
What are the rules for preparing and presenting financial statements upon divisions, consolidation and merger of enterprises in Vietnam?
Pursuant to Article 77 of Circular 133/2016/TT-BTC, the rules for preparing and presenting financial statements upon divisions, consolidation and merger of enterprises are as follows:
(1) The accounting unit that is partially or fully divided, or consolidated with another (the transferor) shall perform accounting tasks defined by the Law on Accounting. The new accounting unit (the transferee) shall perform accounting tasks of the first period as follows:
- All assets, liabilities and equity in accounting books of the transferor shall be transferred to the transferee.
- In the financial position statement of the transferee, the opening balance is empty and must be explained in the notes to financial statement.
- In the income statement and cash flow statement, only data from the division or consolidation time to the end of the period shall be recorded to “This period” column. The “Previous period” is empty and must be explained in the notes to financial statement.
(2) In case of merger, the acquirer (the transferee) shall perform accounting tasks defined by the Law on Accounting. To be specific:
- All assets, liabilities and equity in accounting books of the acquired (the transferor) shall be transferred to the transferee. Opening balance of the transferee will remain unchanged.
- Regarding financial position statement: all assets, liabilities and equity of the transferor shall be recorded to “Ending balance” of the transferee. The “Opening balance” column of the transferee will remain unchanged.
- Regarding income statement and cash flow statement: all data of the transferor shall be recorded to “This period” column of the transferee and explained in the notes to financial statement.
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