ENTERPRISES DO NOT APPROPRIATE RISK PROVISIONS FOR INVESTMENTS ABROAD
The Ministry of Finance issues the Circular No. 48/2019/TTT-BTC instructions on the appropriating and handling of provisions of devaluation of stocks, losses of investments, bad debts and warranty on products, goods, services, construction works at enterprises on August 08, 2019.
Provisions prescribed in this Circular shall be accounted into deductible expenses when determining incomes subject to corporate income tax in the annual reporting period in order to offset possible losses in the subsequent year's reporting period; ensuring that enterprises reflect the value of inventories, investments which are not higher than market prices and the value of receivables is not higher than the recoverable value at the time of preparing the financial statements main year.
Accordingly, the subjects to which the provision is made are the receivable debts which are overdue and receivables that have not yet matured but are likely to be irrecoverable timely by the enterprise and at the same time. The level of appropriation for overdue receivable debts, the provisioning level is set as 30% of the value for debts overdue from 6 months to less than 1 year; 50% of the value for debts overdue from 1 year to less than 2 years; 70% of the value for debts overdue from 2 years to less than 3 years; 100% of the value for debts receivable from 3 years or more.
This Circular takes effect on October 10, 2019.
