Vietnam: Guidance on settlement of financial obligations that arise from transfer of assets when a cooperative is dissolved or declared bankrupt

Specifically, when transferring assets between the transferor and transferee, settlement of financial obligations is guided in Circular No. 31/2018/TT-BTC of the Ministry of Finance of Vietnam as follows: 

- With regard to assets acquired from the financial assistance grants or subsidies given by the Government:

+ The transferee that is a cooperative shall record an increase in assets and state capital in accordance with regulations of the Law on cooperatives and applicable accounting policy.

+ The transferee that is a state-owned enterprise shall record an increase in assets and state capital in accordance with law regulations on management and spending of state funds invested in enterprises and applicable accounting policy.

+ The transferee that is an administrative agency or a public service provider shall record an increase in assets in accordance with applicable public sector accounting policies.

- With regard to assets acquired from the investment and development fund, offered and donated amounts which are defined as undivided assets, or other capital and assets which are defined as undivided assets in the charter, the transferee shall make payment to the cooperative for disposition.

- With regard to assets acquired from the capital contributed by members of the cooperative, the transferee shall make payment to the cooperative which is recorded as proceeds from dissolution or bankruptcy for settlement.

- etc.

More details can be found in Circular No. 31/2018/TT-BTC of the Ministry of Finance of Vietnam, which takes effect from May 14, 2018.

- Thanh Lam -

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