Regulations on accounting books of organizations, agencies or units organizing separate accounting for their social and charity activities in Vietnam

Regulations on accounting books of organizations, agencies or units organizing separate accounting for their social and charity activities in Vietnam (Internet image) 

Regarding this issue, LawNet would like to answer as follows:

1. Regulations on accounting books of organizations, agencies or units organizing separate accounting for their social and charity activities in Vietnam

Regulations on accounting books of organizations, agencies or units organizing separate accounting for their social and charity activities according to Article 5 of Circular 41/2022/TT-BTC are as follows:

- Accounts regularly, continuously and systematically reflect assets, funds and debts payable; receipt and use of contributions received from organizations and individuals, funding derived from state budget and other funding sources; business performance and economic transactions of the accounting unit.

- Chart of accounts

+ Accounts on the balance sheet include accounts of type 1 to 9, and apply double-entry bookkeeping (i.e. every entry shall be recorded in both sides of an account); shall be used for reflecting and recording assets, debts, funds, revenues, expenses, and surplus (or deficit) during the accounting period.

+ Off-balance-sheet accounts reflect economic transactions which have been recorded in accounts on the balance sheet but need to be monitored to serve management requirements, or shall be used to monitor other assets managed by the accounting unit such as leased assets or in-kind contributions pending liquidation, etc. Off-balance-sheet accounts shall apply single-entry bookkeeping (i.e. every entry shall only be recorded in one side of an account).

+ In case a specific percentage of received contributions is used for covering administrative expenses, or the report on receipt and use of funding for administrative expenses is required by competent authorities, the receipt, use and remaining amounts carried forward to the following year of funding for administrative expenses shall be recorded both on the balance sheet and off the balance sheet.

- Application of chart of accounts

+ Based on the chart of accounts enclosed herewith, accounting units shall select accounts suitable for their operations and financial mechanisms.

+ Accounts may be modified in the following cases:

++ Subaccounts of accounts on the chart of accounts (provided in Appendix 01 enclosed with Circular 41/2022/TT-BTC) may be created to meet management requirements of the accounting unit.

Appendix 01

++ The addition of any account of the same tier with that of an account on the chart of accounts (provided in Appendix 01 enclosed with Circular 41/2022/TT-BTC) shall be made with the written approval given by the Ministry of Finance of Vietnam.

- The chart of accounts, contents, structure and methods for recording such accounts are provided in Appendix 01 enclosed with Circular 41/2022/TT-BTC.

2. Accounting rules and requirements for social and charity activities in Vietnam

Accounting rules and requirements for social and charity activities in Vietnam according to Article 3 of Circular 41/2022/TT-BTC are as follows:

- Accounting rules

Any organizations, agencies, units and individuals involved in canvassing, receipt, distribution and use of voluntary contributions for social and charity activities are required to open accounting books to record all economic transactions, prepare reports and disclose information in accordance with the provisions of Circular 41/2022/TT-BTC and relevant laws.

- Accounting requirements

+ Organizations, agencies or units performing social and charity activities for which accounting works are organized separately from those for their canvassing, receipt, distribution and use of voluntary contributions shall open accounting books to record all economic transactions and prepare financial statements in an adequate and transparent manner as prescribed in Circular 41/2022/TT-BTC.

+ An organization, agency or unit that performs social and charity activities on a part-time basis without organizing separate accounting works for their canvassing, receipt, distribution and use of voluntary contributions shall record all business operations on the same accounting books in conformity with their applicable accounting policies. These activities must be recorded in separate books in order to ensure that such amounts are properly managed and used.

They shall prepare annual or periodical reports on revenues and expenses associated with their social and charity activities in accordance with the provisions of Circular 41/2022/TT-BTC; disclose data and information in accordance with regulations of law, and provide separate notes of data on social and charity activities in their financial statements in a clear and transparent manner.

+ Individuals performing social and charity activities who are required to open books to record all acts of receiving, distributing and using voluntary contributions shall comply with the provisions of Circular 41/2022/TT-BTC; make reports and disclose information on their receipt, distribution and use of such contributions in accordance with regulations of law.

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