Handling of Asset Losses After Inventory of the Parent Company - Vietnam National Oil and Gas Group: What are the Regulations?

According to Point a Clause 2 Article 16 of the financial management regulations of the Parent Company - Vietnam Oil and Gas Group issued along with Decree No. 36/2021/ND-CP that regulates asset inventory, specifically:

Regarding the handling of asset losses after inventory:

Asset losses refer to assets that are lost, deficient, damaged, degraded, obsolete, or overdue for technical updates, whether identified during periodic or sudden inventory checks. The Parent Company must determine the lost value, causes, responsibility, and handle it as follows:

- If the cause is subjective, the person causing the loss must compensate for it. The Board of Members decides the compensation amount according to legal regulations and is responsible for its decision;

- For insured assets, if there are losses, they are handled according to the insurance contract;

- The value of the lost assets, after being offset by compensation from individuals, collectives, or insurance organizations, if still deficient, is accounted for as an expense in the period. In cases where the compensation amount cannot be immediately determined in the accounting period when the asset loss occurs, it will be recorded as other income for the accounting period when the compensation is determined;

- In special cases due to natural disasters or unavoidable causes leading to significant damage, which the Parent Company cannot resolve independently, the Board of Members of the Parent Company will create a plan for loss handling and submit it to the Prime Minister of the Government of Vietnam and send it to the Representative Agency of the Owner, Ministry of Finance. After obtaining opinions from the Representative Agency of the Owner and the Ministry of Finance, the Prime Minister of the Government of Vietnam will decide the handling of the losses according to his authority;

- The Parent Company is responsible for promptly handling asset losses. In case of failure to handle asset losses, the Board of Members and the General Director of the Parent Company will be responsible before the Representative Agency of the Owner as in cases of reporting dishonestly on the financial situation of the Parent Company.

Sincerely!