| THE MINISTRY OF FINANCE -------- No. 179/2012/TT-BTC | SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness --------------- Hanoi, October 24th 2012 |
CIRCULAR
ON THE RECORDING, ASSESSMENT, AND SETTLEMENT OF THE EXCHANGE DIFFERENCES IN ENTERPRISES
- Pursuant to the Law on Enterprise 2005;
- Pursuant to the Government's Decree No. 118/2008/ND-CP dated November 27th 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Finance ;
At the proposal of the Director of the Department of Enterprise Finance
The Minister of Finance promulgates a Circular on the recording, assessment, and settlement of the exchange differences in enterprises as follows:
Part A
GENERAL PROVISIONS
Article 1. Subjects of application and scope of regulation:
1. Subjects of application:
This Circular is applicable to the enterprise established and run in Vietnam as prescribed by law. This Circular is not applicable to the credit institutions established and run in accordance with the Law on credit institutions.
For the enterprises established on the basis of the Agreements signed between the Government of the Socialist Republic of Vietnam and other Governments that prescribe the settlement of exchange differences inconsistently with this Circular, such Agreements shall apply.
2. Scope of regulation:
This Circular guides the recording, assessment, and settlement of the exchange differences, and the conversion of the Financial statements on the overseas activities and the overseas offices of enterprises into the Vietnamese currency and accounting.
The determination of deductible expenses and incomes when calculating the income subject to enterprise income tax on the exchange differences in the enterprise must comply with the legal documents on enterprise income tax.
Article 2. Interpretation of terms
The terms in this Circular are construed as follows:
1. “Foreign currency” is a different currency from the accounting currency of an enterprise.
2. “Foreign currency transactions” are the transactions in collecting and spending foreign currencies, and used for price calculation.
3. “Exchange rates” is the exchange ratio between two currencies.
4. “Exchange differences" are the differences arising from an actual exchange or conversion of the same amount of foreign currency into the accounting currency according to various exchange rates.
5. “accounts derived from foreign currencies" are a specific or calculable amount of existing cash, cash equivalents, receivables, and payables, comprising:
- Cash and cash equivalents in foreign currencies.
