Circular 42: Accounting Content of Account Type 228 - Other Long-term Investments

Circular 42: Content for Accounting of Account Type 228 - Other Long-term Investments (illustrative image)

According to the Accounting Regime issued with Circular 42/2014/TT-NHNN, Account 228 - Other Long-term Investments is used to reflect the current value and the increase, decrease in the amount of other long-term investments (excluding investments in subsidiaries, contributions to joint-controlled entities, investments in associates such as: bond investments, stock investments, or investments in other units holding less than 20% of equity (less than 20% of voting rights)... with a recovery or payment period of more than 1 year. The accounting for these accounts must follow the following provisions:

1. When VAMC invests by purchasing valuable papers, the accounting must track in detail each issuer of valuable papers, term, and bond interest rate.

2. In case VAMC buys shares of a company where it holds less than 20% of the voting rights, the accounting must reflect the investment in this account and open detailed books to track each type of stock par value, and each issuing entity.

3. In case VAMC contributes to a jointly controlled business but does not have joint control and holds less than 20% of the voting rights in the joint venture, the contribution must be accounted for in Account 228 - Other Long-term Investments at cost.

4. In the case of long-term investment in foreign currencies, VAMC must convert to VND for accounting records at the actual exchange rate at the time of investment. VAMC is not allowed to re-evaluate the contributed capital even in the case of exchange rate differences to record an increase (decrease) in the contributed capital.

This account has the following Level II accounts:

- 2281 - Shares- 2282 - Other valuable papers- 2288 - Other long-term investments

Content for accounting of accounts:

- 2281 - Shares- 2282 - Other valuable papers- 2288 - Other long-term investments

Debit side records: - Value of other long-term investments increasing.

Credit side records: - Value of other long-term investments decreasing.

Debit balance: - Value of current other long-term investments.

Detailed accounting: Open detailed accounts according to each type of investment (shares, bonds, etc.)

For details, see Circular 42/2014/TT-NHNN effective from February 2, 2015.

Ty Na

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