New Points in Circular 133 Beneficial for Enterprises

Compared to Decision 48/2006/QD-BTC, Circular 133/2016/TT-BTC introduces several noteworthy new points regarding accounting policies applicable to small and medium-sized enterprises as follows:

- Softer, more open regulations under the Law applicable to enterprises to prioritize creating maximum favorable conditions for legally operating businesses.- The Circular has higher practical applicability, greater flexibility, and offers enterprises the opportunity to choose. The accounting regime, besides detailed regulations on level 1 and level 2 accounts, states that each account reflects only one content. There are no separate short-term or long-term accounts; instead, enterprises are allowed to detail and track short-term, long-term, or open detailed accounts as required by management.- Separation of accounting and tax, intended to serve the needs of enterprise management and operations. It can be said that this is the first time accounting policies for small and medium-sized enterprises have differences between accountancy costs, accounting profits, revenues versus taxable income for corporate income tax (CIT), value-added tax (VAT), and deductible expenses.- Closer alignment with international practices and standards. Benefiting from the world's best practices, the Circular introduces progressive contents such as assessing impairment of loans and investment properties, recognizing revenue corresponding to performance obligations, classifying trading securities and held-to-maturity investments, and more.

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