Revenue of VAMC according to Circular 01/2017/TT-BTC

1. Revenue content of VAMC is implemented in accordance with the provisions of Clause 1, Article 23 of Decree 53/2013/ND-CP, Clause 13, Article 1 of Decree 34/2015/ND-CP, and Clause 1, Article 1 of Decree 18/2016/ND-CP.

2. For the revenue as prescribed in Clause 1, Article 1 of Decree 18/2016/ND-CP, VAMC implements as follows:

- Revenue of VAMC based on the remaining principal balance at the end of the period of the debt purchased by special bonds:

- Annually, VAMC accounts into revenue an amount calculated on the remaining principal balance at the end of the period of the debt recorded in the on-balance sheet accounts of VAMC according to the ratio prescribed by the State Bank of Vietnam after agreement with the Ministry of Finance.- The remaining balance at the end of the period of the bad debt purchased by special bonds is the book value of the principal balance of the bad debt at VAMC as of December 31 of the year determining the revenue, or at the date the special bond is settled.

- Revenue of VAMC from the amount recovered from bad debts purchased by special bonds:

- VAMC accounts into revenue an amount calculated on the recovered amount of bad debts purchased by special bonds according to the ratio prescribed by the State Bank of Vietnam after agreement with the Ministry of Finance, minus the amount VAMC has collected annually based on the remaining principal balance at the end of the period of that debt as prescribed at Item a, Point 2.1, Clause 2, Article 6 of Circular 01/2017/TT-BTC.

In case this amount is less than the amount VAMC has collected annually as prescribed at Item a, Point 2.1, Clause 2, Article 6 of Circular 01/2017/TT-BTC, VAMC is not required to return the collected amount to the credit institution.

- The recovery amount of bad debts purchased by special bonds of VAMC are the amounts collected by VAMC through the implementation of bad debt handling measures as prescribed in Article 16 of Decree 53/2013/ND-CP and Decree 34/2015/ND-CP.

3. Principles for revenue recognition

- For the revenue of VAMC based on the remaining principal balance at the end of the period of the debt purchased by special bonds: VAMC accounts into income as of December 31 annually or at the time the special bond is settled.

- For the revenue of VAMC from the amount recovered from bad debts purchased by special bonds: VAMC accounts into income no later than the end of the month in which the debt is recovered.

- For the revenue from selling debts, selling secured assets of debts purchased at market value: VAMC accounts into income at the time of transfer of rights and obligations to the buyer.

- For the revenue from investment activities, stock acquisitions: revenue is the divided profit when there is a resolution or decision to divide.

- For revenue from other activities (including revenue from consulting and brokerage activities related to the purchase, sale, and handling of debts and assets; revenue from leasing and exploiting assets; revenue from financial activities; revenue from auction activities of assets, and other revenues): Revenue is the total amount accepted by the customer for payment regardless of whether it has been collected or not.

- For receivable revenues from credit institutions accounted into revenue but uncollected at the due date, VAMC accounts into expenses and tracks off-balance sheet for collection follow-up. When collected, it is accounted into business operating revenue. For remaining receivables, VAMC sets up provisions in accordance with legal provisions applicable to enterprises.

Circular 01/2017/TT-BTC is effective from February 21, 2017.

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