Vietnam: Accounting contents of Account 228 - Other long-term investments under Circular 42

Vietnam: Accounting contents of Account 228 - Other long-term investments under Circular 42 (illustrative image)

According to the Accounting Regime issued with Circular 42/2014/TT-NHNN, Account 228 - Other Long-term Investments is used to record the current value and the increase or 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 Vietnam Asset Management Company invests by purchasing valuable papers, the accounting must track in detail each issuer of valuable papers, term, and bond interest rate.

2. If Vietnam Asset Management Company 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. If Vietnam Asset Management Company 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, Vietnam Asset Management Company must convert to VND for accounting records at the actual exchange rate at the time of investment. Vietnam Asset Management Company 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 sub-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: The increased value of other long-term investments.

Credit side: The decreased value of other long-term investments.

Debit balance: - The current value of other long-term investments.

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

Details can be found in Circular 42/2014/TT-NHNN effective from February 2, 2015.

Ty Na

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