Regulations on revenue recognition principle of provincial development investment funds in Vietnam

Revenue recognition principle of provincial development investment funds in Vietnam 

Pursuant to Article 6 of Circular 86/2021/TT-BTC, revenue recognition principle of provincial development investment funds are prescribed as follows:

1. Incomes of a Fund are determined in conformity with accounting standards of Vietnam and relevant laws, supported by lawful invoices or receipts, and must be fully recorded as its revenues.

2. With regard to loan interests, the Fund shall evaluate the debt recoverability and classify debts in accordance with Decree No. 147/2020/ND-CP as the basis for accounting for interests receivable as follows:

a) The Fund shall record loan interests receivable in the period as its interest income in respect of debts classified as standard debts for which provision for risks is not required as prescribed in Article 30 of Decree No. 147/2020/ND-CP.

b) The interests receivable of debts remaining classified in the standard debt group as a result of implementation of the State policies and the interests receivable in the period of remaining debts shall not be recorded as income. In such cases, the Fund shall monitor them in off-balance sheet so as to expedite the collection of debts. They shall be recorded as income, when collected.

3. Deposit interest revenue is the amounts of deposit interests receivable during the period.

4. Incomes from investments in establishment of business entities, contributions to, purchased shares and stakes in business entities, investments made under contracts or investment projects include dividends and profits distributed according to the resolution of the General Meeting of Shareholders or distribution decision issued by members contributing capital to the enterprise or a decision issued by a competent authority. In case the Fund directly manages the investment projects, incomes from investment activities shall be recorded in the same period in which revenues/expenses from investment activities are earned or incurred.

5. The Fund shall recognize income from exchange rate differences as a result of revaluation of foreign currency and gold in accordance with accounting standards and relevant laws.

6. With regard to accounts receivable which have been recorded as income but then are considered unrecoverable or not collected on due dates, the Fund shall record them as a decrease in revenue in the same period or as expenses in another period, and monitor them in off-balance sheet to expedite the collection. They shall be recorded as income, when collected.

7. Revenue from other activities shall be recorded in accordance with regulations of laws on taxation and relevant laws.

Best Regards!