Chương III Thông tư 05/2019/TT-BTC kế toán áp dụng cho tổ chức tài chính vi mô: Báo cáo tài chính

Chapter III

FINANCIAL REPORTING

Article 76. General provisions

This Chapter shall provide for contents, methods of preparation, representation and other matters relating to the Financial Reporting System of microfinance institutions.

Financial statement of a microfinance institution (hereinafter referred to as financial statement) must be prepared in accordance with Vietnamese accounting standards and accounting regimes in force in order to record main economic and financial information of that microfinance institution. Financial reporting system shall be comprised of the followings: Financial status reports, income statements, cash flow statements and explanatory notes on financial statements.

Operational reports, statistical reports and others intended for the management and administration of operations of microfinance institutions (including administrative accounting reports) shall not be covered by this Chapter.

1. Purposes of financial statements

Financial statement is designed for providing information about the financial status, business performance and cash flow of a microfinance institution, meeting administrative requirements of leadership of that microfinance institution, state regulatory authorities and user’s helpful demands concerning the making of economic decisions. Financial statement must provide the following information about a microfinance institution:

a. Assets;

b. Liabilities and equity;

c. Revenues and expenses;

d. Profits, losses and distribution of business income;

dd. Taxes and amounts payable to the State;

e. Other assets related to an accounting entity;

g. Cash flows of a microfinance institution.

In addition to such information, a microfinance institution must provide other relevant information in the “explanatory notes on the financial statement” in order to give additional interpretations about items inscribed on that financial statement and accounting policies already in effect to record economic transactions that may arise, prepare and represent that financial statement, and give more explanations about the degree of main financial exposures.

2. Responsibility for preparation, representation and signing of financial statements

Microfinance institutions shall be responsible for preparing annual financial statements and mid-year financial statements.

3. Requirements concerning preparation and representation of financial statements

a. Preparation and representation of financial statements must conform to requirements set out in the Accounting Standard No. 21 – “Representation of financial statements", including:

- Fairness and relevance;

- Selecting and applying accounting policies conforming to regulations of each accounting standard in order to ensure that provided information meets user’s needs in making economic decisions and provide reliable information, if:

+ Representation of financial statements is faithful and relevant to the financial status, business performance and business income of each enterprise;

+ Financial statements correctly reflect the economic nature, not simply the legal form, of transactions and events;

+ Financial statements are represented in a neutral and unbiased manner;

+ Representation of financial statements conforms to the prudence principle;

+ Financial statements are complete in all material respects.

b. A financial statement must be prepared based on data obtained after an accounting book is closed. A financial statement must be prepared based on correct information and according to the correct method, and must be represented in a manner of consistency between reporting periods. The financial statement must be signed by the preparer, chief accountant and legal representative of the accounting entity and stamped by the accounting entity. The signatory of a financial statement must take responsibility for its contents.

4. Principles of preparation and representation of financial statements

a. Preparation and representation of financial statements must conform to regulations set out in the Accounting Standard “Representation of financial statements" and other relevant accounting standards. Material information must be interpreted to help readers truly understand the financial status and conditions of each accounting entity.

b. Financial statements must focus more on the economic nature than on the legal form (respect the nature more than the form) of transactions and events.

c. Assets shall not be recognized with higher value than the recoverable value; liabilities shall not be recognized with the lower value than the value of debt obligations.

d. All accounts and items regarding revenues and expenses must be represented according to the relevance and prudence principle. Income statements and cash flow statements must record accounts and entries of revenue, income, expenses and cash flows in a reporting period. If there are errors affecting business results and cash flows in revenue, income and expenses arising in previous accounting periods, retroactive adjustments must be made while any adjustment in the reporting period is not allowed.

dd. Upon preparation of general-purpose financial statements between microfinance institutions and lower-level entities without legal personality for dependent accounting, balances of internal accounts and items in the financial status report, revenues, expenses, profits and losses deemed unrealized from intracompany transactions must be all removed.

5. Financial reporting period

5.1. Annual financial reporting period

Period of preparation of financial statements must coincide with the accounting period as provided in the Law on Accounting.

5.2. Mid-year financial reporting period

Period of preparation of mid-year financial statements must be a quarter of the fiscal year (except the fourth quarter).

5.3. Other financial reporting period

a. Microfinance institutions may choose to prepare financial statements in other accounting period as required by laws or upon the requests of owners.

b. Microfinance institutions that are split, separated, consolidated, acquired or transformed into other ownership forms, dissolved, terminated or go bankrupt shall be obliged to prepare financial statements at the time of splitting, separation, consolidation, acquisition or transformation into other ownership forms, dissolution, termination or insolvency.

6. Time limits for submission of financial statements

6.1. Annual financial statements

The audited annual financial statement enclosing the audit results given by independent auditing bodies (e.g. audit reports, audit management letters and other relevant documents) shall be submitted no later than 90 days from the date ending the fiscal year.

6.2. Mid-year financial statements

The mid-year financial statement shall be submitted no later than 30 beginning months of the subsequent quarter;

If the deadline for submission of a financial statement falls in a national holiday or weekend, the deadline for submission of a financial statement shall be extended to the following day.

7. Recipients of financial statements

a. Microfinance institutions whose charter capital is wholly owned by the State shall have to send their financial statements to the State Bank’s branches in provinces and centrally-affiliated cities where main offices of these microfinance institutions are located, State Bank of Vietnam (via Bank Supervision and Inspection Agency), Ministry of Finance (Banking Finance Department), tax agencies and statistics departments;

b. Other microfinance institutions shall have to send their financial statements to the State Bank’s branches in provinces and centrally-affiliated cities where main offices of these microfinance institutions are located, State Bank of Vietnam (via Bank Supervision and Inspection Agency), tax agencies and statistics departments.

8. Financial reporting system

8.1. Annual financial statements

a. Compulsory financial reports

b. Non-compulsory, but advised, financial reports

8.2. Mid-year financial statements

a. Compulsory financial reports

b. Non-compulsory, but advised, financial reports

Article 77. Instructions for preparation and presentation of financial statements

1. Contents and components of financial statements

Financial status report shall give a general overview of the financial conditions and situations of a microfinance institution at a specified time. Data of a financial status report indicate total value of existing assets of a microfinance institution according to the structure of assets and capital forming these assets. A financial status report may give overall comments and assessments about the financial status of a microfinance institution.

2. Bases for preparation of a financial status report

- General accounting books;

- Journals, vouchers or detailed spreadsheets

- The previous year’s financial status report. Data entered into the fourth column “Opening balances” in the current accounting period’s financial status report are based on those entered into the third column “Closing balances” of corresponding items in the previous period’s financial status report.

3. Contents and methods of selection of indices in the financial status report of a microfinance institution (Form No. B01-TCVM)

3.1. Assets (No. 100)

This is the general index measuring total value of assets existing in a microfinance institution at the reporting period, including: cash, deposits at the State Bank, deposits at credit institutions, investments, loans, receivables, fixed assets, project expenditures, inventories, capital work in progress, entrusted loans and other assets.

No. 100 = No. 110 + No. 120 + No. 130 + No. 140 + No. 150 + No. 155 + No. 160 + No. 170 + No. 180 + No. 190.

- Cash and cash equivalents (No. 110)

This is the general index measuring total cash available at hand at a microfinance institution on the reporting day, including: cash, deposits at the State Bank and deposits at credit institutions.

No. 110 = No. 111 + No. 112 + No. 113.

+ Cash (No. 111)

This is the index indicating total cash amount at hand at microfinance institutions at the reporting time. The index "Cash and cash equivalents" shall contain data on total balance on the Debit side of Account 101 “Cash”.

+ Deposits in the State Bank (No. 112)

This is the index indicating total existing deposit amounts of a microfinance institution in the State Bank at the reporting time. The index "Deposits at the State Bank" shall contain data on total balance on the Debit side of Account 110 “Deposits at the State Bank”.

+ Deposits in credit institutions (No. 113)

This is the index measuring total existing deposit amounts of a microfinance institution in credit institutions at the reporting time. The index shall contain data on total balance on the Debit side of Account 130 “Deposits at credit institutions”.

- Investments (No. 120)

This is the index reflecting total value of investments that a microfinance institution makes at the reporting time. Data input in this index shall be based on total balance on the Debit side of Account 121 - "Investments".

- Loans (No. 130)

This index shall reflect total value of loans granted by a microfinance institution at the reporting time (after provisions for loan losses have already been offset).

No. 130 = No. 131 + No. 132 + No. 133 + No. 134 + No. 139.

+ Lending (No. 131)

This index shall indicate total value of loans that a microfinance institution grants to credit institutions, or borrowing customers at the reporting time. Data input in this index shall be based on total balance on the Debit side of Account 201 - "Lending".

+ Lending of entrusted funds (No. 132)

This index shall reflect total value of loans that a microfinance institution grants by using its entrusted funds at the reporting time. Data input in this index shall be based on total balance on the Debit side of Account 251 - "Lending of entrusted funds".

+ Debts awaiting resolution (No. 133)

This index shall reflect total value of outstanding debts awaiting treatment measures of a microfinance institution at the reporting time. Data input in this index shall be based on total balance on the Debit side of Account 281 - "Debts awaiting resolution".

+ Charged-off loan debts (No. 134)

This index shall reflect total value of outstanding loan debts of a microfinance institution of which write-off is allowed at the reporting time. Data input in this index shall be based on total balance on the Debit side of the Account 291 - "Charged-off loan debts".

+ Provisions for loan losses (No. 139)

This index shall reflect provisions against loan risks that a microfinance institution sets up at the reporting time, including: Lending, lending of entrusted funds, outstanding debts awaiting resolution or charged-off debts. Data input in this index shall be total balance on the Credit side of Account 299 – “Provisions against loan risks” and must accept the negative numbers given in parentheses (…).

- Fixed assets (No. 140)

This index shall reflect total residual value (Historical cost minus cumulative depreciation value) of fixed assets of a microfinance institution at the reporting time.

No. 140 = No. 141 + No. 144 + No. 147.

- Tangible fixed assets (No. 141)

This index shall reflect total residual value of tangible fixed assets at the reporting time.

No. 141 = No. 142 + No. 143.

+ Historical costs of fixed assets (No. 142)

This index shall reflect total historical cost of tangible fixed assets at the reporting time. Data input in this index shall be total balance on the Debit side of Account 301 “Tangible fixed assets”.

+ Cumulative depreciation value (No. 143)

This index shall reflect total depreciation value of tangible fixed assets accumulated till the reporting time. Data input in this index shall be total balance on the Credit side of Account 305 “Fixed asset depreciation” and must accept the negative numbers given in parentheses (…).

- Fixed assets hired under finance leases (No. 144)

This index shall reflect total residual value of fixed assets hired under finance leases till the reporting time.

No. 144 = No. 145 + No. 146.

+ Historical costs of fixed assets (No. 145)

This index shall reflect total historical cost of fixed assets hired under finance leases at the reporting time. Data input in this index shall be total balance on the Debit side of Account 303 “Fixed assets hired under finance leases”.

+ Cumulative depreciation value (No. 146)

This index shall reflect total depreciation value of fixed assets hired under finance leases at the reporting time. Data input in this index shall be total balance on the Credit side of Account 305 “Fixed asset depreciation” and must accept the negative numbers given in parentheses (…).

- Intangible fixed assets (No. 147)

This index shall reflect total residual value of intangible fixed assets at the reporting time.

No. 147 = No. 148 + No. 149.

+ Historical costs of fixed assets (No. 148)

This index shall reflect total historical cost of intangible fixed assets at the reporting time. Data input in this index shall be total balance on the Debit side of Account 302 “Intangible fixed assets”.

+ Cumulative depreciation value (No. 149)

This index shall reflect total depreciation value of intangible fixed assets accumulated till the reporting time. Data input in this index shall be total balance on the Credit side of Account 305 “Fixed asset depreciation” and must accept the negative numbers given in parentheses (…).

- Other assets (No. 150)

This index shall reflect total value of other assets at the reporting time, including prepaid expenses, security deposits, collateral, pledges, deductible VAT and other assets that have not already been mentioned in other indices, at the reporting time.

No. 150 = No. 151 + No. 152 + No. 153 + No. 154.

+ Prepaid expenses (No. 151)

This index shall reflect amounts paid in advance for services and goods; goodwill and other business advantages that have not yet been distributed into expenses at the reporting time. Data input in this index shall be total balance on the Debit side of Account 381 “Other assets”.

+ Security deposits, collateral and pledges (No. 152)

This index shall reflect amounts that a microfinance institution gives as deposits, collateral or pledges till the reporting time. Data input in this index shall be total balance on the Debit side of Account 381 “Other assets”.

+ Deductible VAT amounts (No. 153)

This index shall reflect the remaining VAT amount deduction that a microfinance institution is granted at the reporting time. Data input in this index shall be total balance on the Debit side of Account 353 “Deductible VAT”.

+ Other assets (No. 154)

This index shall reflect total value of assets other than those stated above at the reporting time. Data input in this index shall be total balance on the Debit side of Account 381 “Other assets”, total balance on the Debit side of Account 453 – Taxes and other payables to the State.

- Project expenditures (No. 155)

This index shall reflect total project expenditures that a microfinance institution incurs till the reporting time. Data input in this index shall be total balance on the Debit side of Account 366 “Project expenditures”.

- Receivables (No. 160)

This index shall reflect total value of amounts receivable at the reporting time, including: Receivables from outside of microfinance institutions, interest and fees receivable, other receivables after subtracting provisions for loss of receivables.

No. 160 = No. 161 + No. 162 + No. 163 + No. 164 + No. 169.

+ Receivables from outside of microfinance institutions (No. 161)

This index shall reflect the remaining amounts to be received from external organizations and individuals at the reporting time. Data input in this index shall be based on total balance on the Debit side of Account 351 “Receivables from the outside" and total balance on the Debit side of Account 451 “Payables to the outside”.

+ Interest and fees receivable (No. 162)

This index shall indicate the remaining interest and fee amounts that a microfinance institution will collect at the reporting time. Data input in this index shall be based on total balance on the Debit side of Account 391 “Interest and fees receivable”.

+ Intracompany receivables (No. 163)

This index shall reflect amounts receivable inside of a microfinance institution at the reporting time. Data input in this index shall be total balance on the Debit side of Account 519 “Intracompany payments”.

A microfinance institution must prepare a financial status report by collecting data from all of its affiliates without legal personality and must ensure that all data arising from intracompany transactions between higher-level units and lower-level units, and amongst lower-level units, must be eliminated. This index shall be complemented and reduced by the index “Intracompany payables” in the financial status report of an affiliate without legal personality. This index shall not be presented in the general financial status report of a microfinance institution.

+ Other receivables (No. 164)

This index shall reflect other receivables, such as advances, collections and payments on behalf of customers at the reporting time. Data input in this index shall be total balance on the Debit side of Account 362 “Other receivables”, total balance on the Debit side of Account 451 “Payables to the outside”, total balance on the Debit side of Account 461 “Payables to employees” and total balance on the Debit side of Account 462 “Other payables”.

+ Provisions for loss of receivables (No. 169)

This index shall measure provisions for loss of receivables, such as provisions for receivables from the outside, provisions for loss of interest and fee amounts at the reporting time. Data input in this index shall be based on total balance on the Credit side of Account 359 – “Provisions for loss of receivables” and must accept the negative numbers given in parentheses (…).

- Inventories (No. 170)

This index shall reflect total existing value of goods in stock under the ownership of a microfinance institution at the reporting time.

No. 170 = No. 171 + No. 172.

+ Tools and instruments (No. 171)

This index shall reflect total value of tools and instruments of a microfinance institution at the reporting time. Data input in this index shall be based on total balance on the Debit side of Account 311 “tools and instruments”.

+ Raw materials (No. 172)

This index shall reflect total value of raw materials in stock at a microfinance institution at the reporting time. Data input in this index shall be total balance on the Debit side of Account 313 “Raw materials”.

- Capital work-in-progress (No. 180)

This index shall reflect total costs incurred from implementation of capital construction projects (including costs of purchase of fixed assets, new construction, repair, Renovation, expansion or technical refurbishment of facilities) of a microfinance institution at the reporting time. Data input in this index shall be total balance on the Debit side of Account 321 “Capital work-in-progress”.

- Lending entrustment (No. 190)

This index shall reflect total loan amounts that a microfinance institution entrusts at the reporting time. Data input in this index shall be based on total balance on the Debit side of Account 382 “Lending entrustment”.

3.2. Liabilities (No. 200)

This index shall reflect all debts that need to be repaid at the reporting time, including: Borrowing of funds from individuals, credit institutions or other entities, customer's deposits, entrusted loans, payables to the outside, interest and fee amounts payable, taxes and other amounts payable to the State, payables to employees, intracompany payables, other payables, provisions for payables, project funding sources and other funds of a microfinance institution.

No. 200 = No. 210 + No. 220 + No. 230 + No. 240 + No. 250 + No. 260 + No. 270 + No. 280 + No. 290.

- Borrowing of funds from individuals, credit institutions and other entities (No. 210)

This index shall reflect total amounts that a microfinance institution lends from individuals, credit institutions and other entities at the reporting time. Data input in this index shall be based on total balance on the Credit side of Account 415 “Borrowing of funds from persons, credit institutions and other entities”.

- Customer’s deposits (No. 220)

This index shall reflect sums that customers are deposited at a microfinance institution at the reporting time. Data input in this index shall be based on total balance on the Credit side of Account 420 “Customer’s deposits”.

- Entrusted loans (No. 230)

This index shall reflect total amounts entrusted to a microfinance institution by the Government, economic organizations and individuals as loans to customers at the reporting time. Data input in this index shall be based on total balance on the Credit side of Account 441 “Entrusted loans”.

- Taxes and amounts payable to the State (No. 240)

This index shall reflect total amounts that a microfinance institution has to pay the State at the reporting time, including taxes, fees, charges and other payables. Data input in this index shall be based on total balance on the Credit side of Account 453 “Taxes and amounts payable to the State”.

- Payables to employees (No. 250)

This index shall reflect total amounts that a microfinance institution has to pay employees at the reporting time. Data input in this index shall be based on total balance on the Credit side of Account 461 “Payables to employees”.

- Provisions for payables (No. 260)

This index shall reflect provisions for estimated amounts that have to be paid by a microfinance institution at the reporting time, such as accrued expenses for the periodic repair of fixed assets, provisions for payables on obligations related to a microfinance institution, etc. Provisions for payables are usually estimated and uncertain about the repayment deadline and value. Data input in this index shall be based on total balance on the Credit side of Account 471 “Provisions for payables”.

- Payables (No. 270)

This index shall reflect total amounts that a microfinance institution needs to pay at the reporting time, including: Payables to the outside, interest and fee amounts payable, intracompany payables, security collateral, deposits, accrued expenses and other payables.

No. 270 = No. 271 + No. 272 + No. 273 + No. 274.

+ Payables to the outside of microfinance institutions (No. 271)

This index shall indicate total amounts that a microfinance institution has to pay externally at the reporting time. Data input in this index shall be based on total balance on the Credit side of Account 451 “Payables to the outside”.

+ Interest and fee amounts payable (No. 272)

This index shall reflect the interest and fee amounts that a microfinance institution has to pay at the reporting time. Data input in this index shall be based on total balance on the Credit side of Account 491 “Interest and fee amounts payable”.

+ Intracompany payables (No. 273)

This index shall reflect amounts that a microfinance institution has to pay internally at the reporting time. Data input in this index shall be total balance on the Credit side of Account 519 “Intracompany payments”.

A microfinance institution must prepare a financial status report by collecting data from all of its affiliates without legal personality and must ensure that all data arising from intracompany transactions between higher-level units and lower-level units, and amongst lower-level units, must be eliminated. This index shall be complemented and reduced by the index “Intracompany receivables” in the financial status report of an affiliate without legal personality. This index shall not be presented in the general financial status report of a microfinance institution.

+ Other payables (No. 274)

This index shall reflect all of other amounts that a microfinance institution has to pay at the reporting time, including: Received security deposits, collateral, accrued expenses and other payables, etc.

No. 274 = No. 274a + No. 274b + No. 274c.

. Received security collateral and deposits (No. 274a)

This index shall reflect total value of amounts that a microfinance institution receives as security collateral or deposits at the reporting time. Data input in this index shall be based on total balance on the Credit side of Account 462 “Other payables”.

. Accrued expenses (No. 274b)

This index shall reflect total value of debts that have to be repaid for receipt of goods or services, but have not yet been invoiced, or of expenses in the reporting period without adequate documents and materials that are certain and need to be charged in advanced into business expenses at the reporting time. Data input in this index shall be based on total balance on the Credit side of Account 462 “Other payables”.

. Other payables (No. 274c)

This index shall reflect total value of other amounts that a microfinance institution has to pay at the reporting time. Data input into this index shall be based on total balance on the Credit side of Account 462 “Other payables”, total balance on the Credit side of Account 351 “Receivables from the outside” and total balance on the Credit side of Account 362 “Other receivables”.

- Project funding sources (No. 280)

This index shall reflect total funds for projects of a microfinance institution. Data input in this index shall be based on total balance on the Credit side of Account 466 “Project funding sources”.

- Funds of microfinance institutions (No. 290)

This index shall reflect microfinance institution’s funds, including: Reward and welfare funds, science and technology development funds.

No. 290 = No. 291 + No. 292.

+ Reward and welfare funds (No. 291)

This index shall reflect amounts in reward funds and welfare funds that have not yet been used at the reporting time. Data input in this index shall be based on total balance on the Credit side of Account 484 “Reward and welfare funds”.

+ Science and technology development funds (No. 292)

This index shall reflect total value of a science and technology development fund currently available for use at the reporting time. Data input in this index shall be based on total balance on the Credit side of Account 483 – Science and technology development funds.

3.3. Equity (No. 300)

This index shall reflect owner investments, funds established by setting aside part of after-tax profits, undistributed after-tax profits, differences upon asset revaluation, exchange differences, etc.

No. 300 = No. 310 + No. 320 + No. 330 + No. 340 + No. 350 + No. 360.

- Owner investments (No. 310)

This index shall reflect total capital actually contributed by owners to microfinance institutions. Data input in this index shall be based on total balance on the Credit side of Account 601 "Owner investments”.

- Differences upon asset revaluation (No. 320)

This index shall reflect total differences arising from revaluation of assets that are directly recorded into the equity existing at the reporting time. Data input in this index shall be based on total balance on the Credit side of Account 631 “Difference upon asset revaluation”. If the Account 631 has the balance on the Debit side, this index shall be recorded by the negative numbers given in parentheses (…).

- Development investment funds (No. 330)

This index shall reflect total amounts in the development investment fund that have not yet been used at the reporting time. Data input in this index shall be based on total balance on the Credit side of Account 612 “Development investment funds”.

- Financial reserve funds (No. 340)

This index shall reflect total amounts in the financial reserve fund that have not yet been used at the reporting time. Data input in this index shall be based on total balance on the Credit side of Account 613 “Financial reserve funds”.

- Reserve funds for supplementing the charter capital (No. 350)

This index shall reflect total amounts in the reserve fund for supplementing the charter capital that have not yet been used at the reporting time. Data input in this index shall be based on total balance on the Credit side of Account 611 “Reserve funds for supplementing the charter capital”.

- Undistributed after-tax profits (No. 360)

This index shall reflect after-tax profits (or losses) that have not yet been distributed at the reporting time. Data input in this index shall be based on total balance on the Credit side of Account 691 “Undistributed after-tax profits”. If the Account 691 has the balance on the Debit side, this index shall be recorded by using the negative numbers given in parentheses (…).

- Total capital (No. 400)

This index shall reflect all capital sources, including: liabilities and owner equity of a microfinance institution at the reporting period.

No. 400 = No. 200 + No. 300.

Article 78. Methods of preparation of income statements (Form No. B02-TCVM)

1. Contents and components of income statements

a. Income statements shall reflect within-period business performance and results of the following operations, including credit operations, service operations and other operations, etc.

b. Each income statement shall have 5 columns:

- First column: Reporting indicators;

- Second column: Numbers of corresponding indicators;

- Third column: Codes of corresponding indicators presented in the explanatory notes on the financial statement;

- Fourth column: Total amounts arising within an accounting year;

- Firth column: Previous year’s data (for comparison purposes). Data entered into the fifth column “Previous year” (for comparison purposes) in the current accounting period’s income statement are based on those entered into the fourth column “Current year” of corresponding items in the previous period’s income statement.

2. Reporting bases

- Previous-period income statement;

- General ledger and journal within the reporting period used for recording entries in class-7 revenue accounts, class-8 expense accounts and account 001 - Determination of business results.

3. Contents and methods of selection of items in an income statement

3.1. Net profit/loss from credit operations (No. 03)

This index shall reflect total income from interest earned from credit operations and equivalent income minus loan interest costs and costs directly related to credit operations after revenue deductions are taken away from these costs (if any).

No. 03 = No. 01 - No. 02.

- Revenues generated from credit operations (No. 01)

This index shall reflect the aggregation of revenues from deposit interest, loan interest (microfinance institutions directly grant loans), interest earned from debt trading activities after revenue deductions have been taken away from such interest (if any) within the reporting period.

Data input in this index shall be based on the balance on the Debit side of Account 701 “Revenues from credit operations” versus the corresponding and opposite balance on the Credit side of Account 001 “Determination of business results”.

- Expenses incurred from credit operations (No. 02)

This index shall reflect loan interest costs, savings interest costs, costs directly related to deposit and savings mobilization and costs of credit operations (including costs of preservation and protection of customer’s deposits and savings) charged into expenses within the accounting period. This index shall not encompass costs of provisions against loan losses presented in the index “Provision costs” (No. 15).

Data input in this index shall be based on the balance on the Credit side of Account 801 “Expenses for credit operations” versus the corresponding and opposite balance on the Debit side of Account 001 “Determination of business results”.

3.2. Net profit/loss from credit operations (No. 06)

This index shall reflect net profit/loss from services, including receipts from such services as payment service, cashier service, purchases and payments on behalf of customers, receipt of entrusted loans, financial consulting service, insurance agent service and other receipts from other services after revenue deductions and costs directly related to service operations have already been taken away from these receipts within the reporting period.

No. 06 = No. 04 - No. 05.

- Revenues generated from service operations (No. 04)

This index shall reflect total service revenues from which revenue deductions (if any) have already been taken away, including: Receipts from payment, cashier services, purchases and payments on behalf of customers, receipt of entrusted loans, financial consulting service, insurance agent service and other receipts from other services that arise within the reporting period.

Data input in this index shall be based on the balance on the Debit side of Account 711 “Revenues from service operations” versus the corresponding and opposite balance on the Credit side of Account 001 “Determination of business results”.

- Expenses for service operations (No. 05)

This index shall reflect expenses for service operations related to payments, purchases and payments on behalf of customers, receipt of entrusted loans, financial consulting services, insurance agent services and other receipts from other services that arise within the reporting period.

Data input in this index shall be based on the balance on the Credit side of Account 811 “Expenses for service operations” versus the corresponding and opposite balance on the Debit side of Account 001 “Determination of business results”.

3.3. Profit/loss from other operations (No. 09)

This index shall reflect the amount of profits/losses from other operations (except revenues from specialized operations of microfinance institutions) from which expenses for other operations have been taken away within the reporting period.

No. 09 = No. 07 - No. 08.

- Revenues generated from other operations (No. 07)

This index shall reflect total revenues from other operations from which permitted deductions (if any) have already been taken away within the reporting period.

Data input in this index shall be based on the balance on the Debit side of Account 741 “Revenues from other operations” versus the corresponding and opposite balance on the Credit side of Account 001 “Determination of business results”.

- Expenses for other operations (No. 08)

This index shall reflect total expenses for other operations arising within the reporting period.

Data input in this index shall be based on the balance on the Credit side of Account 841 “Expenses for other operations” versus the corresponding and opposite balance on the Debit side of Account 001 “Determination of business results”.

3.4. Administrative expenses (No. 10)

This index shall reflect total administrative expenses arising within the reporting period. Data input in this index shall be based on the balance on the Credit side of Account 851 “Administrative expenses” versus the corresponding and opposite balance on the Debit side of Account 001 “Determination of business results”.

3.5. Other profits (No. 13)

This index shall reflect the amount of profits/losses from other operations of microfinance institutions (except profits/losses from credit and service operations) from which other expenses have been taken away within the reporting period.

No. 13 = No. 11 - No. 12.

- Other revenues (No. 11)

This index shall reflect total revenues from other operations from which permitted deductions (if any) have already been taken away within the reporting period.

Data input in this index shall be based on the balance on the Debit side of Account 791 “Other revenues” versus the corresponding and opposite balance on the Credit side of Account 001 “Determination of business results”.

- Other expenses (No. 12)

This index shall reflect total expenses for other operations arising within the reporting period.

Data input in this index shall be based on the balance on the Credit side of Account 891 “Other expenses” versus the corresponding and opposite balance on the Debit side of Account 001 “Determination of business results”.

3.6. Net profits from business operations before addition of expenses for provisions against credit risk (No. 14)

This index shall reflect total profits from business operations that a microfinance institution earns within the reporting period before expenses for provisions against credit risk arise in that period.

No. 14 = No. 03 + No. 06 + No. 09 - No. 10.

3.7. Provision costs (No. 15)

This index shall reflect provision costs arising within the reporting period. Data input in this index shall be the balance on the Credit side of Account 881 “Provision costs” (specified in the detailed journal of costs of provisions against lending risks, provisions for loss of receivables and provisions for payables) versus the corresponding and opposite balance on the Debit side of Account 001 “Determination of business results”.

3.8. Gross profits before tax (No. 16)

This index shall reflect total profits in the balance sheet before expenses incurred from CIT have been deducted from such profits within the reporting period.

No. 16 = No. 14 - No. 15.

3.9. CIT expenses (No. 17)

This index shall reflect total expenses incurred from CIT within the reporting period.

Data input in this index shall be based on the balance on the Credit side of Account 831 “CIT expenses” versus the corresponding and opposite balance on the Debit side of Account 001 “Determination of business results”.

3.10. Profits after tax (No. 18)

This index shall reflect total net profits (or net losses) after CIT arises within the reporting period.

No. 18 = No. 16 - No. 17.

Article 79. Contents and methods of preparation and presentation of cash flow statements (Form No. B03-TCVM)

1. Principles of preparation and representation of cash flow statements

a. Preparation and presentation of annual and mid-year cash flow statements must conform to regulations laid down in the Accounting Standard "Cash flow statements” and "Mid-year financial statements”. As for indices without data that do not need to be presented, microfinance institutions may rearrange, but shall not be allowed to change, the numbers of these indices.

b. Microfinance institutions shall have to present cash flows relevant to three following operations in a cash flow statement: Business, investment and financial operations as prescribed in the accounting standard “Cash flow statements”.

c. Microfinance institutions shall be entitled to present cash flows from business, investment and financial operations in the form most relevant to their business characteristics.

d. Cash flows arising from business, investment and financial operations as mentioned hereunder shall be reported on a net basis:

- Collecting and paying sums on behalf of customers, such as sums collected and paid on behalf of customers and returned to property owners;

- Collecting and paying sums with respect to items with high turnover ratios and short maturity periods, including: Purchases and sales of investments; short-term borrowed funds or loans with the maximum maturity period of 3 months.

dd. Cash flows arising from transactions in foreign currencies must be converted into official currencies used for the purposes of bookkeeping and preparation of financial statements at the forex rates quoted at the transaction time.

e. Investment and finance-related transactions that do not directly involve cash or cash equivalents shall not be presented in cash flow statements.

g. Cash and cash equivalents at the beginning and end of a reporting period, and impacts resulting from changes in foreign exchange rates used for conversion of cash and cash equivalents in foreign currencies at end of the reporting period, must be presented in separate indices included in cash flow statements so as to compare data with those in corresponding items on financial status reports.

h. Microfinance institutions must present values of and reasons for cash and cash equivalents with high closing balances which are at their hand but are prohibited from use due to restrictions imposed by laws or other binding clauses that they have to obey.

i. In case where amounts arise from clearing and settlement activities involved by the same person, cash flow statements shall be represented under the following rules:

- If the clearing and settlement process is related to transactions classified in the same cash flow, the cash flow statement shall be presented on a net basis (for example, asymmetric barter transactions, etc.);

- If the clearing and settlement process is related to transactions classified in different cash flows, microfinance institutions shall not be entitled to present cash flow statements on a net basis, but shall have to present them in separate values of these transactions (for example, clearing and settlement between sums receivable from sale of goods and borrowed funds, etc.).

2. Bases for preparation of cash flow statements

Cash flow statements shall be prepared based on:

- Financial status reports;

- Income statements;

- Explanatory notes on the financial statement;

- Previous-period cash flow statements;

- Other accounting records such as ledgers and journals recording such accounts as “Cash”, “Deposits at the State Bank”, “Deposits at credit institutions”; ledgers and journals recording other relevant accounts, spreadsheets for calculation and distribution of depreciation on fixed assets and other detailed accounting records, etc.

3. Contents and methods of writing of indices in annual cash flow statements

3.1. Cash flows from business operations

- Interest income and other equivalent income received (No. 01)

This index shall be written based on total sums gained from interest income and other equivalent incomes received from credit institutions of microfinance institutions within the reporting period.

Data input in this index shall come from the index “Revenues from credit operations” (No. 01) in the income statement. If these data have negative numbers (in case of loss), the numbers must be given in parentheses (...).

- Interest expenses and other equivalent expenses already paid (No. 02)

This index shall be written based on total interest payments and other equivalent expenses for credit operations of microfinance institutions within the reporting period.

Data input in this index may come from the index “Expenses for credit operations” (No. 02) in an income statement. Data in this index must be the negative numbers given in parentheses (…).

- Receipts from service operations (No. 03)

This index shall be written based on total receipts already collected from service operations of microfinance institutions within the reporting period.

Data input in this index shall come from the index “Revenues from service operations” (No. 04) in an income statement. If these data have negative numbers (in case of loss), the numbers must be given in parentheses (...).

- Sums paid for service operations (No. 04)

This index shall be written based on total interest payments and other equivalent expenses for service operations of microfinance institutions within the reporting period.

Data input in this index may come from the index “Expenses for service operations” (No. 05) in an income statement. Data in this index must be the negative numbers given in parentheses (…).

- Receipts from debts charged off or offset by provisions against risks (No. 05)

This index shall be written based on total sums already collected from debts charged off or offset by provisions against risks of microfinance institutions within the reporting period.

Data input in this index shall be based on sums collected and recorded as revenues from debts charged off or offset by provisions against risks, and monitored outside of the balance sheet.

- Sums paid to employees (No. 06)

This index shall be written based on total sums already paid to employees within the reporting period, including salaries, wages, allowances, bonuses, etc. that microfinance institutions have paid or paid in advance.

Data input in this index shall come from cash accounts in accounting books after being compared with those in the Account 461 (details of sums already paid in cash) within the reporting period. Data in this index must be the negative numbers given in parentheses (…).

- CIT sums already paid (No. 07)

This index shall be written based on total CIT sums already paid to the State within the reporting period, including CIT sums already paid in the present period, outstanding CIT sums in the previous periods already paid in the present period, and CIT sums paid in advance (if any).

Data input in this index shall come from accounts in accounting books, such as cash accounts (details of CIT sums payable) after being collated with details of Account 453 in accounting books. This index shall accept the negative numbers given in parentheses (…).

- Receipts from other operations (No. 08)

This index shall be written based on total sums received from other operations of microfinance institutions within the reporting period.

Data input in this index may come from the index “Revenues from other operations” (No. 07) in an income statement. If these data have negative numbers (in case of loss), the numbers must be given in parentheses (...).

- Sums paid for other operations (No. 09)

This index shall be written based on total sums already paid for interest and equivalent expenses for other operations of microfinance institutions within the reporting period.

Data input in this index may come from the index “Expenses for other operations” (No. 08) in an income statement. Data in this index must be the negative numbers given in parentheses (…).

- Net cash flows from business operations before changes in assets and working capital (No. 20)

This index shall reflect the difference in total sums received and total sums paid from business operations before assets and working capital are changed at microfinance institutions within the reporting period. Data input in this index may be the aggregation of data of the index No. 01 through No. 09. If the numbers are negative, they must be given in parentheses (…).

No. 20 = No. 01 + No. 02 + No. 03 + No. 04 + No. 05 + No. 06 + No. 07 + No. 08 + No. 09.

- Increases/decreases in deposits and loans (No. 21)

This index shall be written based on the difference between the deposit and loan amounts of microfinance institutions in the current period and those in the previous period.

Data input in this index shall come from the following indices: Deposits at the State Bank (No. 112), Deposits at credit institutions (No. 113) and Loans (No. 130) in the financial status report. If data in this index are the negative numbers, these numbers must be given in parentheses (…).

- Decreases in provision sums for losses (No. 22)

This index shall be used on the basis of the amounts of provisions used for compensating for losses within the reporting year.

- Other increases/decreases in working assets (No. 23)

This index shall be written based on the difference between the current-period and previous-period sums in two indices “Other assets” (No. 150), “Receivables” (No. 160) in the financial status report of a microfinance institution which adjusts profits/losses arising cumulative exchange differences that are not carried forward to revenues/expenses, or adjusts profits/losses upon asset revaluation. If data in this index are the negative numbers, these numbers must be given in parentheses (…).

- Increases/(Decreases) in deposit sums in the custody of and loan sums granted by credit institutions (No. 24)

This index shall be written based on the difference between current-period and previous-period amounts in the index “Borrowing of funds from individuals, credit institutions and other entities” (No. 210) in the financial status report.

- Increases/(Decreases) in customer’s deposits (No. 25)

This index shall be written based on the difference between current-period and previous-period amounts in the index “Customer’s deposits” (No. 211) in the financial status report.

- Increases/(Decreases) in entrusted loans (No. 26)

This index shall be written based on the difference between current-period and previous-period amounts in the index “Capital received as entrusted loans” (No. 212) in the financial status report.

- Other Increases/(Decreases) in operating public debts (No. 27)

This index shall be written based on the difference between current-period and previous-period amounts in the index “Payables to the outside” (No. 213) and the index “Other payables” (No. 217) in the financial status report (exclusive of sums payable to employees and expense sums payable).

- Sums taken out of funds (No. 28)

This index shall be written based on sums taken out of funds for spending within the reporting period. Data input in this index shall be based on the difference between amounts at the end and at the beginning of the accounting year in the index "Funds of microfinance institutions" (No. 223).

- Net cash flows from business operations (No. 30)

This index shall reflect the difference in total sums received in and total sums paid out from business operations after adjustments in changes in assets and working capital of microfinance institutions within the reporting period. Data input in this index may be the aggregation of data of the index No. 01 through No. 28. If the numbers are negative, they must be given in parentheses (…).

No. 30 = No. 20 + No. 21 + No. 22 + No. 23 + No. 24 + No. 25 + No. 26 + No. 27 + No. 28.

3.2. Cash flows from investment operations

- Sums spent on purchases and construction of fixed assets (No. 31)

This index shall be written based on total sums actually paid out for purchases and construction of tangible fixed assets, intangible fixed assets and payment sums in the phase of implementation of these assets which have been capitalized into intangible fixed assets within the reporting account.

Data input in this index shall come from bookkeeping accounts such as cash account (details of sums spent on purchases and construction of fixed assets), receivables account (detailed of collection of debts promptly paid in purchase activities), Account 451 (details of repayment of debts to sellers of fixed assets) after being collated with Accounts 301, 302, 303 and 305 within the reporting period. Data input in this index must be the negative numbers given in parentheses (…).

- Receipts from liquidation and disposal of fixed assets (No. 32)

This index shall be written based on the net sums already collected from liquidation and disposal of tangible fixed assets or intangible fixed assets within the reporting period, even including the sums gained from recovery of outstanding receivables directly related to the liquidation and disposal of fixed assets.

This index shall not encompass amounts of receipts from nonmonetary assets or sums receivable but not yet collected within the reporting period from the liquidation and disposal of fixed assets.

Data input in this index shall be the difference between sums received from and sums paid for the liquidation and disposal of fixed assets. Received sums shall come from such bookkeeping accounts as cash account after being collated with bookkeeping accounts such as Account 791 and 351 (details of receipts from the liquidation and disposal of fixed assets) within the reporting period. Paid sums shall come from such bookkeeping accounts as Account 101 after being collated with Account 891 (details of payments for the liquidation and disposal of fixed assets) within the reporting period. Data input in this index must be the negative numbers given in parentheses (…) if the sum actually collected is less than the sum actually paid.

- Net cash flows from investment operations (No. 35)

This index shall reflect the difference between total sums received from and total sums paid for investment operations within the reporting period. If data in this index are the negative numbers, these numbers must be given in parentheses (…).

No. 35 = No. 31 + No. 32.

3.3. Cash flows from financial operations

- Receipts from acquisition of owner’s paid-in capital (No. 36)

This index shall be written based on total sums actually contributed as owner’s paid-in capital within the reporting period.

This index shall not encompass borrowed funds and debts transformed into capital, undistributed after-tax profits transformed into capital or receipts from owner's capital contributions via nonmonetary assets.

Data input in this index shall come from cash accounts after being collated with those in the Account 601 within the reporting period.

- Sums used for repaying paid-in capital to owners (No. 37)

This index shall be written based on total sums already repaid owing to reimbursement of paid-in capital to owners in the monetary form within the reporting period.

This index shall not encompass sums used for repaying paid-in capital to owners by using nonmonetary assets or sums used as contributed capital for compensation for business losses.

Data input in this index shall come from cash accounts after being collated with those in the Account 601 within the reporting period. Data input in this index must be the negative numbers given in parentheses (…).

Net cash flows from financial operations (No. 40)

This index shall reflect the difference between total sums received from and total sums paid for financial operations within the reporting period. If data in this index are the negative numbers, these numbers must be given in parentheses (…).

No. 40 = No. 36 + No. 37.

3.4. Consolidation of cash flows within the reporting period

- Net cash flows within the reporting period (N0. 50)

The index “Net cash flows within the reporting period" shall reflect the difference between total sums received from and total sums paid for three operations, including business, investment and financial operations, of microfinance institutions within the reporting period. If data in this index are the negative numbers, these numbers must be given in parentheses (…).

No. 50 = No. 30 + No. 35 + No. 40.

- Cash and cash equivalents at the beginning of the reporting period (No. 60)

This index shall be written based on data in the index “Cash” in the beginning of the reporting period (No. 110, column “Opening balance” in the financial status report).

- Impacts resulting from changes in exchange rates for foreign currency conversion (No. 61)

This index shall be written based on total exchange difference upon revaluation of the closing balance of cash and cash equivalents in foreign currencies (No. 110 in the financial status report) at the end of the reporting period.

Data input in this index shall come from cash and related accounts (details of items defined as cash equivalents) after being compared with those in the Account 641 within the reporting period. Data input in this index must be the positive numbers if foreign exchange profits are gained. On the contrary, such data must be the negative numbers given in parentheses (…) if foreign exchange losses arise.

- Cash and cash equivalents at the end of the reporting period (No. 70)

This index shall be written based on data in the index “Cash” at the end of the reporting period (No. 110, column “Closing balance” in the financial status report).

No. 70 = No. 50 + No. 60 + No. 61.

Article 80. Contents and methods of preparation and presentation of explanatory notes on the financial statement (Form No. B09-TCVM)

1. Purposes of explanatory notes on the financial statement:

a. Explanatory notes on the financial statement refer to an integral part of a financial statement used for the narrative description or detailed analysis of data and information presented in financial status reports, income statements and cash flow statements as well as other necessary information in conformity with requirements set out in specific accounting standards.

b. Explanatory notes on the financial statement may also present other information if microfinance institutions consider them necessary for the fair and rational representation of a financial statement.

2. Principles of preparation and representation of explanatory notes on financial statements

a. Upon preparation of financial statements, microfinance institutions must give explanatory notes on these financial statements in compliance with the Accounting Standard “Presentation of financial statements” and instructions given herein.

b. Upon preparation of mid-year financial statements, microfinance institutions must give explanatory notes on these financial statements in compliance with the Accounting Standard “Presentation of mid-year financial statements” and Circulars providing instructions about this standard.

c. Explanatory notes on financial statements of microfinance institutions must comprise the following contents:

- Information about bases for preparation and presentation of financial statements and specific accounting policies selected and applied in important transactions and events;

- Representation of information included in accounting standards that has not yet been presented in other financial statements (material information);

- Provision of additional information which has not yet been presented in other financial statements, but is necessary for the truthful and rational representation of the financial status of microfinance institutions.

d. Explanatory notes on financial statements must be presented in a logical manner. Microfinance institutions may, on their own, decide to arrange the ordinal numbers in explanatory notes on financial statements in the form most relevant to their business characteristics according to the principles under which each item in a financial status report, income statement or cash flow statement needs to be hyperlinked to related information in these explanatory notes.

3. Bases for preparation of explanatory notes on financial statements

a. Financial status reports, income statements and cash flow statements;

b. General ledgers, accounting journals and vouchers or relevant detailed spreadsheets;

c. Previous-year explanatory notes on financial statements;

d. Actual conditions of microfinance institutions and other relevant documents.

4. Contents and methods of selection of indices

4.1. Business characteristics of microfinance institutions

In this section, microfinance institutions should give detailed information about:

(1) Establishment and operation license and its validity period;

(2) Capital contribution form and membership;

(3) Members of Managing Board/ Board of Members (name and title of each member);

(4) Members of Board of General Directors/Directors (name and title of each member);

(5) Operating locations;

(6) Main office; transaction offices;

(7) Total of officers and employees.

4.2. Accounting period and currency unit

(1) Accounting year must be the calendar year starting from January 1,… to December 31,… If a microfinance institution accepts the fiscal year other than the calendar year, start date and end date of the accounting year must be clearly informed.

(2) Accounting currency unit: Clearly specifying Vietnamese dong or another currency selected in accordance with the Law on Accounting.

4.3. Applied Accounting Standards and Regimes

(1) Applied accounting regime: Clearly informing which accounting regime is applied by a microfinance institution.

(2) Declaration of compliance with the applied accounting standard and regime: Clearly confirming whether the financial statement is prepared and presented in conformance to Vietnamese Accounting Standards and Regimes? A financial statement shall be deemed neutral and conforming to Vietnamese Accounting Standards and Regimes if it complies with regulations set out in each standard and circular providing instructions on implementation of Accounting Standards and Regimes that microfinance institutions are applying. In case none of accounting standards is applied, this case must be specified clearly.

4.4. Applied accounting policies

(1) Foreign exchange rates used for accounting purposes

- Commercial banks whose forex rates are chosen;

- Forex rates applied upon recognition and revaluation of assets;

- Forex rates applied upon recognition and revaluation of liabilities;

- Forex rates applied in other transactions.

(2) Principles of recognition of loans:

- Principles of recognition of lending of funds from operating capital of microfinance institutions;

- Principles of recognition of loans from entrusted funds;

- Principles of classification of debts and setting aside of funds for provisions against risks; write-off of unrecoverable loans.

(3) Principles of accounting for liabilities

- Criteria for classification of liabilities;

- Determining the detailed journal of liabilities according to the original maturity period, term to maturity at the reporting time, base currency or specific items.

- Confirming whether liabilities that do not exceed recoverable values are recorded or not.

(4) Principles of recognition of inventories

- Principles of recognition of inventories: Clearly stating whether inventories are recorded according to the historical cost or the net realizable value

- Principles of costing of inventories: Clearly stating the applied method (e.g. weighted average; first in first out; specific identification; retail methods).

- Methods of accounting for inventories: Clearly determining whether microfinance institutions apply the perpetual inventory count method or the periodic inventory method.

- Methods of setting up provisions against devaluation of inventories.

Clearly specifying that microfinance institutions set up provisions against devaluation of inventories on a basis of the positive difference between historical costs and net realizable values of inventories. Confirming whether net realizable values of inventories are defined in compliance with regulations set forth in the Accounting Standard “Inventories” or not. As provisions against devaluation of inventories are set up based on the difference between current-year provisions and previous-year provisions that have not yet been used up, determining whether provisions must be supplemented or reversely entered into the accounting report.

(5) Principles of recognition and depreciation of fixed assets or fixed assets hired under finance leases

a. Principles of accounting for tangible or intangible fixed assets:

- Clearly determining whether the book value of fixed assets is calculated according to the historical cost or the after – revaluation cost.

- Principles of accounting for costs arising after the primary cost recognition (e.g. costs of upgrade, renovation, maintenance, care and repair of fixed assets): Determining whether they are charged into the book value or operating expenses;

- Clearly stating methods of depreciation on fixed assets; depreciable amounts calculated according to the historical cost or the historical cost minus estimated recoverable value gained from the liquidation and disposal of fixed assets.

- Confirming whether other regulations on management, use and depreciation of fixed assets are observed or not.

b. Principles of accounting for fixed assets hired under finance leases:

- Clearly specifying the method of determination of the book value;

- Clearly specifying the method of depreciation of fixed assets hired under finance leases.

(6) Principles of accounting for prepaid expenses

- Clearly defining which prepaid expenses are gradually distributed into operating expenses.

- Methods and time of distribution of prepaid expenses;

- Determining whether prepaid expenses are recorded according to the prepayment term?

(7) Principles of accounting for liabilities

- In which way liabilities are classified?

- Determining the recording of liabilities according to specific items, the original maturity periods, term to maturity at the reporting time, or base currency.

- Determining whether liabilities are revaluated to ensure they satisfy definitions of accounts or items of foreign currency origin or not.

- Determining whether liabilities are recognized not to be less than value of repayment obligations or not.

- Determining whether provisions for liabilities are set up or not.

(8) Principles of recognition of accrued expenses: Clearly specifying which expenses not yet been paid but estimated to be recognized as operating expenses within an accounting period. Defining bases for determination of values of these expenses.

(9) Principles and methods of recognition of provisions payable:

- Principles of recognition of provisions payable: Clearly defining whether provisions payable already recognized meet requirements set out in the Accounting Standard “Provisions, contingent assets and debts” or not.

- Methods of recognition of provisions payable: Clearly determining provisions payable that are additionally set up (or charged back) according to the positive (or negative) difference between current-year provisions payable and previous-year unused provisions payable recorded in accounting books.

(10) Principles of recognition of equity:

- Determining whether paid-in capital of owners is recorded according to the actual amount of contributed capital or not.

- Specifying reasons for recognizing the differences upon asset revaluation and exchange differences.

- Determining the method of calculation of undistributed profits. Principles of distribution of profits and dividends.

(11) Principles and methods of recognition of incomes:

- Income from credit and service operations: Determining whether this income fully meets requirements for recognition of revenues set out in the Accounting Standard “Revenues and other income” or not. Determining which method is used for recognizing income.

- Other principles of recognition of income.

(12) Principles of accounting for expenses:

- Determining whether operating expenses (e.g. credit and service operations) and administrative expenses arising within an accounting period are recorded or not.

- Detailing administrative expenses.

(13) Principles and methods of recognition of current CIT expenses: Current CIT expenses must be determined on the basis of taxable income and CIT rates in the present year.

(14) Other accounting principles and methods: Clarifying other accounting methods and principles intended for helping users understand that financial statements have been presented on the basis of compliance with the Vietnamese Accounting Standards promulgated by the Ministry of Finance.

4.5. Supplementary information about items included in financial status reports

- In this section, microfinance institutions must give the detailed presentation and analysis of data included in the financial status report in order to help users of the financial statement to have insight into contents of items and accounts of assets, liabilities and equity.

- The unit of account used for calculation of values in the section “Supplementary information about items included in financial status reports” must be the same as used in the financial status report. Data input in the column “Beginning of the accounting year” must be copied from the column “End of the accounting year” in the explanatory notes on financial statements in the previous accounting period. Data input in the column “End of the accounting year” shall come from:

+ Current-period financial status report;

+ General accounting ledgers;

+ Journals, vouchers or relevant detailed spreadsheets.

- Microfinance institutions may, on their own, decide the ordinal numbers of detailed information represented in this section provided that they are relevant to the numbers given in the financial status report, and are easy to be collated and compared between accounting periods.

- In case where microfinance institutions retrospectively change accounting policies or make retroactive adjustments for material errors in the previous accounting period, they must adjust comparable data (data entered at the column “beginning of the accounting year”) in order to ensure that these adjustments are comparable and explainable. In case, for unknown reasons, data input at the column "Beginning of the accounting year" are not comparable with those at the column "End of the accounting year", this case must be clearly explained in the explanatory notes on the financial statement.

4.6. Supplementary information about items included in income statements.

- In this section, microfinance institutions must give the detailed presentation and analysis of data included in the income statement in order to help users of the financial statement to have more insight into contents of items and accounts of income and expenses.

- The unit of account used for calculation of values in the section “Supplementary information about items included in income statements” must be the same as used in the income statement. Data input in the column “Beginning of the accounting year” must be copied from the explanatory notes on financial statements in the previous accounting period. Data input in the column “Current year” shall come from:

+ Current-period income statement;

+ General accounting ledgers;

+ Journals, vouchers or relevant detailed spreadsheets.

- Microfinance institutions may, of their own accord, decide the ordinal numbers of detailed information represented in this section provided that they are relevant to the numbers given in the income statement, and are easy to be collated and compared between accounting periods.

- In case, for unknown reasons, data input at the column "Previous year" are not comparable with those at the column "Current year", this case must be clearly explained in the explanatory notes on the financial statement.

4.7. Supplementary information about items included in cash flow statements

- In this section, microfinance institutions must give the representation and analysis of data included in the cash flow statement in order to help users to have more insight into elements affecting cash flows within the accounting period.

- The unit of account used for calculation of values in the section “Supplementary information about items included in cash flow statements” must be the same as used in the cash flow statement. Data input at the column “Previous year” must be copied from those in the explanatory notes on the previous-year financial statement; Data input at the column “Current year” shall come from:

+ Current-year cash flow statement

+ General accounting ledgers;

+ Journals, vouchers or relevant detailed spreadsheets.

4.8. Other information

- In this section, microfinance institutions must present important information (if any) other than information provided in the aforesaid sections for the purpose of providing oral or numerical information according to regulations laid down in the particular accounting standard in order to help users understand that financial statements have been represented in a truthful and rational manner.

- Upon presenting explanatory information in this section, depending on requirements and characteristics of information as provided in 4.5 through 4.7 herein, microfinance institutions may issue detailed and elaborate forms in a relevant manner and comparable data where necessary.

- In addition to information to be presented according to provisions in the section 4.5 through the section 4.6, microfinance institutions may present additional information where necessary for users of financial statements.

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