Which expenses are periodic accrued expenses that are not used up at the end of the period and are not reasonable expenses in Vietnam?
- Which expenses are required to be differentiated between accrued expenses and other expenses to record and report in the financial statement in Vietnam?
- Which expenses are periodic accrued expenses that are not used up at the end of the period and are not reasonable expenses in Vietnam?
- Shall accruement expenses which are unused until the end of the fiscal year be presented in the financial statement in Vietnam?
Which expenses are required to be differentiated between accrued expenses and other expenses to record and report in the financial statement in Vietnam?
Pursuant to the provisions at Point b, Clause 1, Article 54 of Circular 200/2014/TT-BTC on Account 335 – Accrued expenses payable:
It is required to differentiate accrued expenses and provisions recorded to the account 352 and report in the financial statement in conformity with each item, in particular:
- Provisions are current liabilities without specific payment schedule; accrued expenses are current liabilities with specific payment schedule;
- Provisions are amounts payable which are not identified (i.e. provisions for warranty on goods or building works); accrued expenses are amounts payable which is identified.
- In the financial statement, provisions are separated with trade payables and other payables but accrued expenses are a part of trade payables or other payables.
- The recording of accrued expenses to operating expenses during a period shall be carried out in conformity with revenues and expenses incurring during a period. The payables not incurring because the goods or services are not received which are recorded to operating expenses in advance in this period to avoid suddenness in the operating expenses shall be recorded to provisions.
Which expenses are periodic accrued expenses that are not used up at the end of the period and are not reasonable expenses in Vietnam? (Image from the Internet)
Which expenses are periodic accrued expenses that are not used up at the end of the period and are not reasonable expenses in Vietnam?
Comparing with the provisions at Point 2.20, Clause 2, Article 6 of Circular 78/2014/TT-BTC amended by Article 4 of Circular 96/2015/TT-BTC on deductible and non-deductible expenses when calculating taxable income:
Periodic accrued expense that is not used up at the end of the period is non-deductible expenses when calculating taxable income.
Accrued expenses include: expenditures on periodic major repairs of fixed assets, expenditures on fulfillment of contractual obligations to the services for which revenue has been collected (including payments for leases of assets and provision of services that have been collected in advanced for many years and included in revenue of the year in which they are collected), and other accrued expenses.
Note: If an enterprise has recorded revenue for calculation of CIT without incurring all of expenses, accrued expenses may be included in deductible expenses in proportion to the revenue earned when calculating taxable income.
When the contract is finalized, the enterprise must calculate the exact expense according to legitimate invoices and receipts in order to increase the expense (if actual expense is higher than accrued expense) or decrease the expense (if actual expense is lower the accrued expense) of the tax period during which the contract is finalized.
Accrued expense on periodic repairs of fixed assets shall be included in annual expense. If actual expense is higher than accrued expense, the enterprise may include the difference in deductible expenses.
Shall accruement expenses which are unused until the end of the fiscal year be presented in the financial statement in Vietnam?
Pursuant to the provisions at Point h, Clause 1, Article 54 of Circular 200/2014/TT-BTC on Account 335 – Accrued expenses payable:
Account 335 – Accrued expenses payable
1. Rules for accounting
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g) The capitalized interest expenses shall be determined according to VAS “Borrowings costs”. The interest expenses shall be capitalized in following cases:
- Regarding loans serving the construction of fixed assets, investment properties, and the interests shall be capitalized even if the construction duration is under 12 months;
- The contract may not capitalize loan interests to serve the construction of building works or assets for their clients, including separate loans, for example: A contractor applies for loans for construction of building works for their clients; a shipbuilder builds ships to ship-owner, etc.
h) Accruement expenses which are unused until the end of the fiscal year must be presented in the financial statement.
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Therefore, accruement expenses which are unused until the end of the fiscal year must be presented in the financial statement
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