Uni 15-10-2015 - Explanation for some contents of Circular 200/2014/TT-BTC

On 09  Sep 2015, MOF issued official letter 12568/BTC-CĐKT explaining some contents of Circular 200/2014/TT-BTC. Some contents explained as follows:

• Recognition of revenue, cost of goods sold for buying, selling transactions between intercompany non-legal entity units having dependent accounting records decided by enterprise regardless of the form of documents to be invoices or output voucher cum internal transport.
• For prepayments, the classification of long term or short term is based on original period of those, not based on residual value to classify. (not reclassify long term into short term).
• For A/C 413:

• For purchases of assets or the payment of expenses to be paid immediately in foreign currency (without recoding in A/C payables to suppliers) applied at the buying exchange rate (because enterprises do not have to spend money to buy foreign currency VND which use foreign currency or foreign currency at the funds or in bank to pay). This regulation aims to ensure the property is not recorded higher than the value which can be recovered
• For asset purchases or expenses incurred but not yet paid, the enterprise recorded a liability at the selling rate of the bank to ensure the principle of liabilities which is not recorded lower the obligation to pay

• For profit / loss difference in the exchange rate of the pre operation period of the enterprise (Circular 179) which is not fully allocated on A/C 3387/242 before the effective date of this Circular, which must  have the transfer all remaining unallocated at A/C 515/635 right in 2015 except where otherwise provided by law
• On the interest cost capitalization, for loans served for the construction of fixed assets, investment property, capitalized interest including the construction period of less than 12 months. This ensures that reflect nature and consistent with international practices was fixed, investment property often are not mass-produced assets such as inventory. So Circular 200 regulated capitalization  including construction period of the asset under 12 months
• For cash flow: the once prepaid cash flow for land rent or incurring from buying land use right is cash flow from investment. However, , if the prepayment is done repeatedly then classified as cash flows operating activities. Therefore, the "increase and decrease in prepaid expenses" does not include the difference between the closing balance to the beginning balance of the once prepaid rent unqualified recorded as intangible fixed assets (Circular 200 were misspellings lacking the word "no")