Vietnam: Guidelines for settlement of liabilities upon equitization of state-owned enterprises

Thuy Phu

09:57, 26/05/2018

The Ministry of Finance of Vietnam issued Circular No. 41/2018/TT-BTC, which guidelines for financial settlement and enterprise valuation in equitization of state-owned enterprises and single-member limited liability companies 100% charter capital of which by state-owned enterprises.

According to Circular No. 41/2018/TT-BTC of the Ministry of Finance of Vietnam, the equitized enterprise shall compare, verify and classify liabilities as prescribed in Article 15 and 16 of Decree No. 126/2017/ND-CP of Vietnam’s Government and make lists of debtor and creditor-based liabilities at the date of enterprise valuation and the following contents:

Accounts receivable:

- All debts that are due, not due or overdue; with regard to commercial banks, all accounts receivables recorded in off-balance sheet must also be compared and verified.

- Review all contracts to determine advances paid to suppliers of goods and services that have been recorded as business expenses, including payments for house rents, land rents, purchasing goods, long-term insurance, salaries, wages, etc.

Accounts payable:

- Make a list of creditor-based loans; determine tax debts and other payables to state budget;

- Analyze loans under loan agreements, secured loans, loans from bond issuance; undue, due or overdue debts; principals, interests, debts not required to be repaid.

Circular No. 41/2018/TT-BTC of the Ministry of Finance of Vietnam takes effect from June 18, 2018.

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