What are accounting principles when converting a public service unit into a joint stock company in Vietnam?

What are accounting principles when converting a public service unit into a joint stock company in Vietnam?

In Article 4 of Circular 26/2021/TT-BTC, the accounting principles when converting a public service unit into a joint stock company are as follows:

1. Activities related to financial processing to determine the value of the converted public service unit must be fully accounted for in the unit's accounting books. Based on records and documents related to the results of financial processing when determining the value of the unit for conversion, the unit shall perform accounting according to the provisions of the current administrative and public accounting regime.

2. Based on the accounted data and fully reflected in the accounting books, the unit must prepare a final settlement report and financial report according to the regulations of the administrative and public accounting regime at the time of determining the value of the unit and the time of official transformation into a joint stock company.

3. Results of determining the value of public service units and data re-evaluating the value of assets of public service units for conversion purposes do not have to be adjusted in the accounting books of the public service unit according to the public administrative accounting regime that is used as a basis for preparing financial status reports according to the enterprise model according to the instructions in this Circular.

What are accounting principles when converting a public service unit into a joint stock company in Vietnam? (Image from the Internet)

What is accounting method for some financial processing operations before officially converting into a joint stock company in Vietnam?

In Article 5 of Circular 26/2021/TT-BTC, the accounting method for some financial processing operations before the official transformation into a joint stock company is as follows:

1. In case there is a shortage of assets and the assets are formed from the state budget, non-refundable aid, or foreign loans; The source of deducted and retained fees must determine the responsibilities of organizations and individuals for handling and material compensation according to current regulations.

- Based on the inventory results and minutes of determining the shortage of fixed assets, the accountant records a decrease in fixed assets:

Debit Account 138- Other receivables (1388) (remaining value)

Debit Account 214- Depreciation and accumulated depreciation of fixed assets (accumulated depreciation value)

There is Account 211- Tangible fixed assets (original cost).

- When there is a handling decision, based on each specific recall case, record:

Debit accounts 111, 112, 334, 154,...

Credit Account 138- Other receivables (1388)

At the same time, transfer the remaining value, record:

Debit Account 366- Unrecorded advances received (36611, 36621, 36631)

There are accounts 511, 512, 514

At the same time, record:

Debit Account 421 - Accumulated surplus (deficit).

Credit: Account 43141 - Fund for development of professional activities.

2. For costs of projects that have not been approved by competent authorities and have not yet been formed in kind and have no recovery value

a) Based on documents determining costs of projects allocated by the state budget that are not approved by competent authorities, accountants prepare documents:

- Record cost reduction:

Debit Account 138- Other receivables (1388)

Account 611, 241...

- At the same time, record the decrease in received funds:

Debit accounts 511, 512, 3664,...

Credit Account 333- Other state payables (3338)

- At the same time, record a decrease in the settlement amount with the State budget, record:

There are negative accounts 008, 009, 012,... (depending on the funding source).

b) The part where reimbursement liability can be determined: Based on payment documents or related documents, the accountant records:

Debit accounts 111, 112, 334,...

Credit Account 138- Other receivables (1388).

c) The loss is recorded in the unit's operating expenses, the accountant records:

Debit Account 154, 811...

Credit: Account 138- Other receivables (1388).

d) The unit submitting the refund to the state budget, based on the submitted documents that have been certified by the State Treasury, the accountant records:

Debit Account 333- Other state payables (3338)

There are Accounts 111, 112.

3. In case the converted public service unit does not inherit financial investments, report to the Ministry, ministerial-level agency, Government agency, Provincial People's Committee, Hanoi National University, University Ho Chi Minh City country to handle as follows:

- If the financial investment is transferred to another unit, based on the handover documents, the accountant records:

Debit accounts 421, 43141,...

Credit: Account 121- Financial investment.

- If transferring financial investments to other investors according to the provisions of law, based on money transfer documents, the accountant records:

Debit accounts 111, 112

Credit: Account 121- Financial investment.

4. The cost of hiring an audit of the financial statements at the time of value determination, the converted public service unit is accounted into operating costs in the period (not identified as conversion costs), the accountant records:

Debit Account 811- Other expenses

There are accounts 111, 112, 331, ...

5. Other arising economic and financial operations related to financial handling activities before the official transformation into a joint stock company or public service unit shall be accounted for according to the regulations of the current administrative and public accounting regime.

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