The Ministry of Finance amends regulations on the provision for loss of securities investments

DNHN - The Ministry of Finance has just issued Circular 24/2022/TT-BTC amending and supplementing Circular No. 48/2019/TT-BTC guiding the setting up and handling of provisions for devaluation of inventories, losses investments, bad debts and warranties for products, goods, services, construction works at the enterprise. This Circular takes effect from May 25, 2022.

Circular 24 amends and supplements provisions on "Provision for loss of securities investments" (Article 5) as follows: 

Objects of provision are securities issued by domestic economic organizations by the law, owned by enterprises, and listed or registered for trading on the domestic stock market, are freely traded on the market and the actual market price of securities at the time of making the annual financial statements is lower than the value of the securities investment being recorded in the accounting books. 

The above provisioning objects do not include government bonds, government-guaranteed bonds, and local government bonds. 

The Circular clearly states that the level of provision for devaluation of securities investment is calculated according to the following formula:

For listed securities (including stocks, fund certificates, derivative securities, and listed covered warrants): the actual price of securities on the market is calculated according to the closing price at the nearest date. transactions up to the date of the annual financial statements. 

For shares registered for trading on the trading market of unlisted public companies and state-owned enterprises that are equitized in the form of a public offering of securities (Upcom), the stock price will be Actual securities on the market are determined to be the average reference price in the last 30 consecutive trading days before the time of making annual financial statements announced by the Stock Exchange. 

For corporate bonds that have been listed and registered for trading, the bond price on the market is the most recent transaction price at the Stock Exchange within 10 days up to the time of making financial statements. In case there is no transaction within 10 days up to the time of making the annual financial statement, the enterprise does not make provision for this investment. 

Provision balances for investments in Government bonds, Government-guaranteed bonds and local government bonds that enterprises have set up before the effective date of this Circular (if any) will be refunded. input, record a decrease in expenses at the time of making the financial statements in 2022.

Khanh Linh