Issuance of a Circular providing guidelines for public sector accounting in Vietnam
Has the Circular providing guidelines for public sector accounting in Vietnam been issued yet? What are regulations on classification and rules for using chart of accounts in Vietnam? - Mr. Van (Ha Noi)
Issuance of a Circular providing guidelines for public sector accounting in Vietnam
On April 17th, 2024, the Minister of Finance of Vietnam promulgates the Circular 24/2024/TT-BTC providing guidelines for public sector accounting.
The Circular 24/2024/TT-BTC provides guidelines for the following entities:
- Regulatory authorities (except People's Committees of communes, wards, and commune-level towns that are funded by commune-level budget);
- Public administrative units (except public administrative units that self-cover both recurrent and investment expenses and are allowed by competent authorities to apply corporate accounting regimes; however, if these units are allocated state budget estimates with domestic funding sources, receive ODA grants from foreign donors which are recorded as state budget revenues, receive foreign loans for implementing projects, or incur expenses which are covered with deducted or retained amount of collected fees as prescribed by the law on fees and charges, they shall be required to prepare final statements of operating funding according to provisions of Appendix III enclosed herewith);
- Political organizations; socio-political organizations; Vietnamese Fatherland Front and other authorities, organizations and units that are funded by state budget;
- Organizations, authorities and units that apply financial autonomy of public administrative units.
Note: Organizations, authorities and units are assigned to manage and do bookkeeping of infrastructure assets in accordance with regulations of law on management and use of public property. Enterprises assigned to manage infrastructure assets without calculation of state capital portion of such enterprises shall apply off-balance-sheet (OBS) accounts prescribed in the Circular 24/2024/TT-BTC to recording of entries in their accounting books; enterprises assigned to manage infrastructure assets with calculation of state capital portion of such enterprises shall do bookkeeping in accordance with regulations on corporate accounting.
Other organizations, authorities and units that are not funded by state budget may do accounting depending on their operations.
Issuance of a Circular providing guidelines for public sector accounting in Vietnam - image from internet
What are regulations on classification and rules for using chart of accounts in Vietnam?
Pursuant to Clause 2 Article 5 of the Circular 24/2024/TT-BTC stipulating classification and rules for using chart of accounts in Vietnam:
- Accounts on the balance sheet include accounts of type 1 to 9, and are recorded applying double-entry bookkeeping (i.e. every entry shall be recorded in both sides of an account). These accounts are used for reflecting assets, funding sources, revenues, and expenses and determining business performance of a unit during the accounting period, which are used as the basis for making financial statements.
- OBS accounts are accounts of type 0, and are recorded applying single-entry bookkeeping (i.e. every entry shall only be recorded in one side of an account). OBS accounts 005, 006, 007, 008, 009, 010, 011, 012, 013 are used for reflecting the receipt and use of funding of which the amounts used must be recorded in detail at the end of year according to list of state budget entries as the basis for making final statements. To be specific:
+ OBS accounts used for statement of state budget-derived funding (accounts 005, 006, 007, 008, 009, 010, 011) shall be recorded in detail according to the list of state budget entries and budget year, and in a manner meeting other management requirements for statement of state budget-derived funding set out in regulations of law on state budget.
+ OBS accounts used for statement of funding derived from deducted/retained amounts of collected fees, and revenues earned during operation of which the amounts used must be recorded and reported according to the list of state budget entries (accounts 012, 013) shall be recorded in detail according to the list of state budget entries and in a manner meeting other management requirements for statement of these funding sources.
- If an economic/financial transaction involves the receipt and use of domestic funding derived from state budget, or funding derived from deducted/retained amounts of collected fees, and revenues earned during operation of which the amounts used must be recorded and reported according to the list of state budget entries, it shall be recorded on both on-balance and OBS accounts and in detail according to the list of state budget entries and appropriate budget year.
- If an economic/financial transaction involves the receipt and use of foreign aid amounts or foreign loans for implementing projects, it shall be recorded as state budget revenue or expense in accordance with regulations of law in force. After it is recorded as state budget revenue or expense, it must be also recorded on OBS accounts for making final statements as prescribed in the Circular 24/2024/TT-BTC.
How many accounting book system for an annual accounting period are used by an accounting entity in Vietnam?
Pursuant to Article 6 of the Circular 24/2024/TT-BTC stipulating accounting books:
Accounting books
1. Accounting books shall be intended for recording, systematizing and retaining all economic/financial transactions already arising of units. Opening, recording of entries, closures, management and retention of accounting books shall comply with regulations of the Law on accounting, relevant legislative documents and the provisions of this Circular.
...
4. Types of accounting books
a) Each unit shall use only one accounting book system for an annual accounting period, including general accounting book and subsidiary accounting books.
Each unit shall create both general accounting book and subsidiary accounting books, and ensure adequate and correct contents, order and method for recording accounting books as prescribed in this Circular.
b) The general accounting book is used for generally recording economic/financial transactions in chronological order or according to economic contents. A unit may, where necessary, record economic transactions in chronological order and classify or systematize them according to economic contents.
...
As regulated above, each unit shall use only one accounting book system for an annual accounting period, including general accounting book and subsidiary accounting books.
Best regards!
