How are losses managed after being processed?

04:22, 10/07/2024

This is a noteworthy content issued by the Governor of the State Bank of Vietnam in Circular 39/2013/TT-NHNN, stipulating the determination, establishment, management, and use of risk provisioning of the State Bank of Vietnam.

The losses after being handled shall be accounted for and monitored in off-balance sheet accounts.

Management of losses after being handled, Circular 39/2013/TT-NHNN

Source: Internet

To be specific, Circular 39/2013/TT-NHNN stipulates:

- Units that incur losses are not allowed to notify the debtor and must continue to take measures to recover such losses as if they were ordinary receivables not yet handled, except in cases where the Prime Minister of the Government of Vietnam has made a decision.- The Governor of the State Bank shall decide to write off the losses already handled using risk reserves out of the off-balance sheet accounts if, after a minimum period of 05 (five) years from the date of using the risk reserves to handle the losses, all measures to recover the losses have been taken but the amounts remain unrecovered.- The documentation for the losses written off from off-balance sheet accounts must be stored in accordance with the law, which includes loss handling records and all documents proving that the head of the unit has taken all measures to recover but was unable to recover the losses.- The amounts recovered from the losses already handled using risk reserves shall be accounted for as the unit's income and reported to the State Bank (Finance and Accounting Department).

Thus, the losses after being handled will be strictly managed in the off-balance sheet accounts.

More details can be found in Circular 39/2013/TT-NHNN, effective from June 1, 2014.

Thu Ba

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