Vietnam: Guidance on cash flow statement of securities companies

10:54, 20/03/2018

Recently, the Ministry of Finance of Vietnam issued Circular No. 23/2018/TT-BTC providing guidance on accounting for covered warrants of securities companies being issuers.

According to Circular No. 23/2018/TT-BTC of the Ministry of Finance of Vietnam, the guidance for cash flow from business activities will vary depending on whether it is direct or indirect, specifically as follows:

Direct method:

+ Payments to investors who exercise in-the-money warrants when they mature are added to Item “Payments for acquisition of financial assets” – Entry 01.

+ Proceeds from offering of warrants are added to Item “Proceeds from sale of financial assets” – Entry 02.

+ “Receipts from returned margins” content is added to Item “Other proceeds from operating activities” – Entry 11

+ “Margins provided for securing payment obligations at depository bank”, “payments for covering costs involved in the offering of warrants upon maturity date or suspension or cancellation of warrant offering" are added to Item “Other payments for operating activities” – Entry 12.

Indirect method:

+ “Loss from reassessment of payable warrants” is added to Item “Loss from reassessment of financial assets at fair value through profit or loss” – Entry 11.

+ “Profit from reassessment of payable warrants” is added to Item “Profit from reassessment of financial assets at fair value through profit or loss” – Entry 19.

+ “Payable warrants” is added to Item “Increase (decrease) in accounts payable” – Entry 50.

View more details at Circular No. 23/2018/TT-BTC of the Ministry of Finance of Vietnam, effective from April 27, 2018.

- Thanh Lam -

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