Management of Capital and Assets at State-Owned Enterprises

1. The enterprise must establish and issue an internal regulation to manage and use the assets of the enterprise; The regulation must clearly define the coordination of each management department within the enterprise and stipulate the responsibility for compensation of each department and individual in cases of damage, loss, or causing asset loss and damage to the enterprise.

2. For enterprises with specific assets such as livestock, crops, equipment with radioactive sources, hazardous substances, and other specific assets, in addition to complying with the legal provisions on finance, the enterprise must ensure compliance with the regulations, procedures, and technical standards issued by the specialized management agency in the management, utilization, and liquidation of these assets.

3. Preservation of capital for state-owned enterprises:

- The establishment of provisions for risk reserves: reserves for devaluation of inventory, reserves for doubtful debts, reserves for devaluation of financial investments, and reserves for warranty of products, goods, and construction works, is carried out according to regulations.- The profit and loss of the enterprise as a basis for assessing capital preservation is the difference between the total revenue and other income minus (-) the total expenses incurred in the production and business activities of the enterprise (including the provision as prescribed). If the difference is positive, the enterprise has a profit; if the difference is negative, the enterprise has a loss; if there is no difference, the enterprise does not incur a profit or loss.- The management and determination of revenue, other income, and expenses to determine profit and loss (business results) of the enterprise as a basis for assessing the level of capital preservation are carried out according to the provisions of Article 30 of Decree 91/2015/ND-CP and Vietnamese Accounting Standards, the current enterprise accounting regime issued by the Ministry of Finance.

Details can be seen at Circular 219/2015/TT-BTC effective from February 15, 2016.

- Ngoc Duyen -

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE