Vietnam: How many financial reporting periods are microfinance institutions required to complete? In 2024, what is the deadline for submitting financial statements by microfinance institutions?
- How many financial reporting periods are microfinance institutions in Vietnam required to complete?
- In 2024, what is the deadline for submitting financial statements by microfinance institutions in Vietnam?
- What are the principles of preparation and representation of financial statements by microfinance institutions in Vietnam?
- In 2024, what are the places for receiving financial statements submitted by microfinance institutions in Vietnam?
How many financial reporting periods are microfinance institutions in Vietnam required to complete?
Under Article 76 of Circular 05/2019/TT-BTC, the financial statement of a microfinance institution (hereinafter referred to as financial statement) must be prepared under Vietnamese accounting standards and accounting regimes in force to record main economic and financial information of that microfinance institution.
The financial reporting system shall be comprised of:
- Financial status reports,
- Income statements,
- Cash flow statements and
- Explanatory notes on financial statements.
Specifically, according to Clause 5, Article 76 of Circular 05/2019/TT-BTC, the financial reporting periods of microfinance institutions in Vietnam is specified as follows:
- Annual financial reporting period
The period of preparation of financial statements must coincide with the accounting period as provided in the Law on Accounting.
- Mid-year financial reporting period
The period of preparation of mid-year financial statements must be a quarter of the fiscal year (except the fourth quarter).
- Other financial reporting period
+ Microfinance institutions may choose to prepare financial statements in other accounting periods as required by laws or upon the requests of owners.
+ Microfinance institutions that are split, separated, consolidated, acquired or transformed into other ownership forms, dissolved, terminated or go bankrupt shall be obliged to prepare financial statements at the time of splitting, separation, consolidation, acquisition or transformation into other ownership forms, dissolution, termination or insolvency.
In 2024, what is the deadline for submitting financial statements by microfinance institutions in Vietnam?
Under Section 6, Article 76 of Circular 05/2019/TT-BTC, the deadline for submitting financial statements by microfinance institutions in Vietnam is specified as follows:
General provisions
6. Deadlines for submission of financial statements
6.1. Annual financial statements
The audited annual financial statement enclosing the audit results given by independent auditing bodies (e.g. audit reports, audit management letters and other relevant documents) shall be submitted no later than 90 days from the date ending the fiscal year.
6.2. Mid-year financial statements
The mid-year financial statement shall be submitted no later than 30 beginning months of the subsequent quarter;
If the deadline for submission of a financial statement falls in a national holiday or weekend, the deadline for submission of a financial statement shall be extended to the following day.
Thus, the deadline for submitting financial statements 2023 by microfinance institutions in Vietnam is no later than 90 days from the end of the fiscal year.
For example, if the 2023 accounting period is from January 1, 2023 to December 31, 2023, the deadline for submitting financial statements 2023 by microfinance institutions is no later than March 30, 2024.
What are the principles of preparation and representation of financial statements by microfinance institutions in Vietnam?
Under Section 4, Article 76 of Circular 05/2019/TT-BTC, the principles of preparation and representation of financial statements by microfinance institutions in Vietnam are specified as follows:
(1) Preparation and representation of financial statements must conform to regulations set out in the Accounting Standard “Representation of financial statements" and other relevant accounting standards. Material information must be interpreted to help readers truly understand the financial status and conditions of each accounting entity.
(2) Financial statements must focus more on the economic nature than on the legal form (respect the nature more than the form) of transactions and events.
- Assets shall not be recognized with higher value than the recoverable value; liabilities shall not be recognized with the lower value than the value of debt obligations.
- All accounts and items regarding revenues and expenses must be represented according to the relevance and prudence principle. Income statements and cash flow statements must record accounts and entries of revenue, income, expenses and cash flows in a reporting period. If there are errors affecting business results and cash flows in revenue, income and expenses arising in previous accounting periods, retroactive adjustments must be made while any adjustment in the reporting period is not allowed.
- Upon preparation of general-purpose financial statements between microfinance institutions and lower-level entities without legal personality for dependent accounting, balances of internal accounts and items in the financial status report, revenues, expenses, profits and losses deemed unrealized from intracompany transactions must be all removed.
In 2024, what are the places for receiving financial statements submitted by microfinance institutions in Vietnam?
Under Clause 7, Article 76 of Circular 05/2019/TT-BTC, the places for receiving financial statements submitted by microfinance institutions in Vietnam are specified as follows:
- Microfinance institutions whose charter capital is wholly owned by the State shall have to send their financial statements to the State Bank’s branches in provinces and centrally-affiliated cities where the main offices of these microfinance institutions are located, State Bank of Vietnam (via Bank Supervision and Inspection Agency), Ministry of Finance (Banking Finance Department), tax agencies and statistics departments;
- Other microfinance institutions shall have to send their financial statements to the State Bank’s branches in provinces and centrally-affiliated cities where the main offices of these microfinance institutions are located, State Bank of Vietnam (via Bank Supervision and Inspection Agency), tax agencies and statistics departments.
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