Circular 24/2022/TT-BTC amending Circular 48/2019/TT-BTC, providing instructions on the appropriation and use of provisions of devaluation of inventories, loss of investments, bad receivable debts and warranty for products, goods, services and constructi

CIRCULAR

Amending and supplementing a number of articles of the Minister of Finance's Circular No. 48/2019/TT-BTC dated August 08, 2019, providing instructions on the appropriation and use of provisions of devaluation of inventories, loss of investments, bad receivable debts and warranty for products, goods, services and construction works at enterprises

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Pursuant to the Government’s Decree No. 218/2013/ND-CP dated December 26, 2013, detailing and guiding the implementation of the Law on Enterprises;

Pursuant to the Government’s Decree No. 91/2014/ND-CP dated October 01, 2014, amending and supplementing a number of articles of the decrees on taxes; the Government’s Decree No. 12/2015/ND-CP dated February 12, 2015, detailing the implementation of the Law Amending and Supplementing a Number of Articles of the Tax Laws and amending and supplementing a number of articles of the decrees on taxes;

Pursuant to the Government’s Decree No. 87/2017/ND-CP dated July 26, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the proposal of the Director of the Department of Banking and Financial Institutions;

The Minister of Finance hereby promulgates the Circular amending and supplementing a number of articles of the Minister of Finance's Circular No. 48/2019/TT-BTC dated August 08, 2019, providing instructions on the appropriation and use of provisions of devaluation of inventories, loss of investments, bad receivable debts and warranty for products, goods, services and construction works at enterprises.

Article 1. Amending and supplementing a number of articles of the Circular No. 48/2019/TT-BTC providing instructions on the appropriation and use of provisions of devaluation of inventories, loss of investments, bad receivable debts and warranty for products, goods, services and construction works at enterprises

1. To amend and supplement Point a Clause 1 Article 5 as follows:

“a) Objects for which the provision is appropriated include types of securities issued by domestic economic institutions in accordance with the law, owned by the enterprise, listed or registered for trading on domestic securities market, eligible for free trading on the market, with the market price at the time of making the financial statement lower than the value of the securities investment being recorded on the accounting book.

The above-mentioned objects do not include Government bonds, Government-guaranteed bonds and municipal bonds.”

2. To amend and supplement Point b Clause 1 Article 5 as follows:

“b) The level of the provision to be appropriated for decrease in securities prices shall be calculated according to the following formula:

- For listed securities (including listed covered warrants, stocks, fund certificates and derivatives): The actual market price is calculated according to the closing price on the latest day with transactions to the time of making the financial statement.

In case the securities have been listed on the market but there is no transaction within 30 days prior to the date of appropriating the provision, the enterprise shall determine the level of provision to be appropriated for each securities investment in accordance with Point b Clause 2 of this Article.

In case the securities are delisted, or their transactions are suspended or canceled on the date of appropriating the provision, the enterprise shall determine the level of provision to be appropriated for each securities investment in accordance with Point b Clause 2 of this Article.

- For securities of which the transactions have been registered on the trading market of unlisted public companies and state-owned enterprises equitized in the form of offering securities to the public (Upcom), the actual market price of securities shall be the average reference price for the latest 30 trading days prior to the time of making the annual financial statement as announced by the Stock Exchange. In case the securities of a joint-stock company have been registered for trading on the Upcom market but there are no transactions within 30 days prior to the date of appropriating the provision, the enterprise shall determine the level of provision to be appropriated for each securities investment in accordance with Point b Clause 2 of this Article.

- For corporate bonds that have been listed or registered for trading, the market price of bonds shall be the lasted trading price at the Stock Exchange within 10 days up to the time of making the financial statement. In case there is no transaction within 10 days up to the time of making the annual financial statement, the enterprise shall not appropriate the provision for such investment.”

Article 2. Implementation provisions

1. This Circular takes effect from May 25, 2022.

2. The balance of the existing provision of Government bond, Government-guaranteed bond and municipal bond investment that has been appropriated before the effective date of this Circular (if any) shall be refunded and recorded as a decrease at the time of making the 2022 financial statement.

3. Any difficulties and problems arising in the course of implementation should be reported to the Ministry of Finance for consideration and settlement./.