Vietnam: Guidance on accounting for covered warrants of securities companies

16:53, 19/03/2018

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, after receiving the certificate of warrant offering issued by the State Securities Commission of Vietnam (“SSC”), accountant must keep track of the quantity of warrants to be issued and record it to: Dr 018 – Warrants.

When a securities company distributes warrants to investors on the primary market:

When offering warrants, record:

Dr 112 – Bank deposits (sub-account: escrow account opened at the bank)

Cr 329 – Payable warrants (sub-accounts are opened to record every type of warrants).

And record:

Cr 018 – Warrants.

When the SSC affirms the result of the warrant distribution in writing, the accountant shall record a decrease in the escrow account and an increase in the ordinary deposit account.

When a securities company provides margins at a depository bank for securing payment obligations for the offering of warrants, the accountant must manage the margins on account 112 – Bank deposits and clearly explain the margin levels.

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

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