Circular 53/2016/TT-BTC amending and supplementing some articles of Circular 200/2014/TT-BTC guiding enterprise accounting system
On 21 March 2016, the Ministry of Finance issued Circular 53/2016/TT-BTC, which amends some articles of Circular 200/2014/TT-BTC on 22 December 2014 providing guidance on the Vietnamese Enterprise Accounting System.
According to Clause 03, Article 01 of this Circular, enterprise can choose to apply actual exchange rate that is the rate approximating the average transfer exchange rate of the buying and selling rates of the commercial bank where the enterprise most frequently trades. The approximate exchange rate must ensure its disparity does not exceed +/- 1% compared with the average transfer exchange rate. The average transfer exchange rate is determined daily or weekly or monthly based on the average between the daily buying transfer rate and selling transfer rate of the commercial banks.
However, the use of approximate rate must ensure that there is no material effect on the financial position and business performance during the accounting period. With this amendment allowing the use of approximate rate, enterprises have been provided with more flexible option in their daily accounting work instead of applying respective buying and selling rates as specified previously in Circular 200/2014/TT-BTC.
If enterprises use the approximate exchange rate to account for transactions denominated in foreign currencies in the accounting period, the enterprises must use the transfer rate of the commercial banks where they most frequently trade to revalue balances denominated in foreign currencies at end of the accounting period. The transfer rate can be the buying or selling rate or average transfer rate of the commercial banks.
Beside, according to this Circular, the documents such as contract, payment documents, dossier of investment project, finalization report and other relevant documents are not required to be translated into Vietnamese unless required by the competent state authorities.
Circular 53/2016/TT-BTC came to effect on 21 March 2016 and will be applicable to fiscal years beginning on or after 01 January 2016. However, enterprises are allowed to apply those changes relating foreign exchange rate for the fiscal year beginning from 01 January 2015.