Vietnam: Principles for recording revenue in people's credit funds

According to Circular No. 20/2018/TT-BTC of the Ministry of Finance of Vietnam, principles for recording revenue in people's credit funds are as follows:

Determination of revenue when calculating corporate income tax is carried out in accordance with the provisions of the Law on Corporate Income Tax and guiding documents.

For interest income and similar income:

- Earning interest from credit granting activities: The People's Credit Fund is responsible for assessing the ability to collect debt and classify debt in accordance with banking law as a basis for accounting for receivable interest and perform the accounting as follows:

+ The People's Credit Fund accounts the interest receivable arising during the period as income for debts classified as qualified debts that do not require specific risk provisions according to regulations of the State Bank of Vietnam.

+ The amount of interest receivable on debts is kept in the group of qualified debts due to the implementation of State policies and the amount of interest receivable arising during the period of the remaining debts does not have to be accounted for as income, people's credit funds monitor off-balance sheet to urge revenue collection; when earned, it is accounted into income.

- Deposit interest collection: is the amount of interest receivable during the period.

For capital contribution interest at Vietnam Cooperative Bank: is the amount of profit divided when there is a resolution or division decision of the Board of Directors of Vietnam Cooperative Bank.

For revenue from remaining activities: revenue is the entire amount of money provided for goods and services arising in the period that is accepted for payment by customers, regardless of whether the money has been collected or not.

For revenues that Circular No. 20/2018/TT-BTC stipulates are receivable and have been accounted for as income but are assessed as uncollectible or uncollectable at the due date, the people's credit fund accounts for a decrease in revenue if it is the same accounting period or accounts it as an expense if it is a different accounting period and monitors the off-balance sheet to urge revenue. When earned, it is accounted for as income.

View more details at Circular No. 20/2018/TT-BTC of the Ministry of Finance of Vietnam, effective from March 29, 2018.

-Thao Uyen-

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