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Some information about Circular 133/2016 applied to small and medium enterprises - Effective from 2017
Posted date 06/10/2016
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Posted date 06/10/2016
12.347 view
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On August 26, 2016, the Ministry of Finance issued Circular 133/2016/TT-BTC on guidance on the Accounting Regime for Small and Medium Enterprises replacing Decision No. 48/2006/QD-BTC.
On August 26, 2016, the Ministry of Finance issued Circular 133/2016/TT-BTC on guidance on the Accounting Regime for Small and Medium Enterprises replacing Decision No. 48/2006/QD-BTC.
The accounting regime applicable to small and medium enterprises (SMEs) issued under Decision 48/2006/QD-BTC has been in place for 10 years and has revealed some limitations that need to be changed. The SME accounting regime is now based on the Enterprise Accounting Regime issued under Circular 200/2014/TT-BTC and has been amended and adjusted to be simpler.
The new accounting regime for SMEs also has separate instructions for micro-enterprises in the simplest possible way, with instructions for enterprises that do not meet the assumption of continuous operation (when falling into a state of inactivity due to dissolution, bankruptcy, etc.). It can be said that this SME accounting regime has many innovations, one of the main ideas of which is to take the enterprise, the subject of application, as the center, prioritizing the purpose of enterprise governance over the purpose of State management.
Here are some highlights of Circular 133:
1. Applicable subjects:
- This Circular applies to small and medium-sized enterprises (including micro-enterprises) in all fields and economic sectors as prescribed by law on support for small and medium-sized enterprises, except for state-owned enterprises, enterprises in which the State owns more than 50% of charter capital, public companies as prescribed by law on securities, cooperatives and cooperative unions as prescribed by the Law on Cooperatives.
- Small and medium-sized enterprises in specific fields such as electricity, oil and gas, insurance, securities... have been issued or approved by the Ministry of Finance to apply specific accounting regimes.
- Small and medium-sized enterprises can choose to apply the Enterprise Accounting Regime issued under Circular No. 200/2014/TT-BTC dated December 22, 2014 of the Ministry of Finance and its amendments, supplements or replacements, but must notify the tax authority managing the enterprise and must implement consistently during the fiscal year. In case of switching back to applying the Small and Medium-sized Enterprise Accounting Regime under this Circular, it must be implemented from the beginning of the fiscal year and must be notified again to the Tax authority.
2. Regarding documents and accounting books:The accounting regime applicable to small and medium enterprises (SMEs) issued under Decision 48/2006/QD-BTC has been in place for 10 years and has revealed some limitations that need to be changed. The SME accounting regime is now based on the Enterprise Accounting Regime issued under Circular 200/2014/TT-BTC and has been amended and adjusted to be simpler.
The new accounting regime for SMEs also has separate instructions for micro-enterprises in the simplest possible way, with instructions for enterprises that do not meet the assumption of continuous operation (when falling into a state of inactivity due to dissolution, bankruptcy, etc.). It can be said that this SME accounting regime has many innovations, one of the main ideas of which is to take the enterprise, the subject of application, as the center, prioritizing the purpose of enterprise governance over the purpose of State management.
Here are some highlights of Circular 133:
1. Applicable subjects:
- This Circular applies to small and medium-sized enterprises (including micro-enterprises) in all fields and economic sectors as prescribed by law on support for small and medium-sized enterprises, except for state-owned enterprises, enterprises in which the State owns more than 50% of charter capital, public companies as prescribed by law on securities, cooperatives and cooperative unions as prescribed by the Law on Cooperatives.
- Small and medium-sized enterprises in specific fields such as electricity, oil and gas, insurance, securities... have been issued or approved by the Ministry of Finance to apply specific accounting regimes.
- Small and medium-sized enterprises can choose to apply the Enterprise Accounting Regime issued under Circular No. 200/2014/TT-BTC dated December 22, 2014 of the Ministry of Finance and its amendments, supplements or replacements, but must notify the tax authority managing the enterprise and must implement consistently during the fiscal year. In case of switching back to applying the Small and Medium-sized Enterprise Accounting Regime under this Circular, it must be implemented from the beginning of the fiscal year and must be notified again to the Tax authority.
Circular 133:
- Accounting documents are all of the guidance type (not mandatory). Enterprises can design their own accounting documents suitable to the characteristics of their operations and management requirements, but must ensure the main contents and must ensure the provision of information according to the provisions of the Law on Accounting and documents guiding the Law on Accounting.
- All accounting forms (including General Ledgers and Journals) are guidance (not mandatory). Enterprises must comply with the provisions of the Law on Accounting and documents guiding the Law on Accounting. Enterprises are allowed to design their own accounting forms and cards in accordance with their operational characteristics and management requirements, but must ensure that the information is presented fully, clearly, and easily checked and controlled.
Decision 48 : Enterprises shall prepare documents and accounting books according to the forms prescribed in Decision 48.
3. Accounting principles and provisions:
Circular 133:
- Only prescribe accounting principles
- No detailed instructions on accounting entries. Enterprises make their own accounting entries in accordance with the document circulation process, as long as the financial statements are correct.
- Enterprises choose their own bookkeeping currency that meets the prescribed regime criteria.
- Enterprises can decide whether or not to record revenue from internal transactions regardless of the issued documents.
- Enterprises are allowed to decide for their dependent accounting units to record capital from the enterprise as liabilities or equity.
- Enterprises can choose financial statement forms according to decreasing liquidity or distinguish between short-term and long-term according to tradition.
Decision 48:
- Detailed regulations on accounting entries
- Record in Vietnamese Dong
- Revenue recognition from internal transactions is based on issued documents such as VAT invoices or internal delivery and warehouse receipts.
- Clearly stipulate the financial statement form and the enterprise must apply it.
3. Change the account system
- All accounting forms (including General Ledgers and Journals) are guidance (not mandatory). Enterprises must comply with the provisions of the Law on Accounting and documents guiding the Law on Accounting. Enterprises are allowed to design their own accounting forms and cards in accordance with their operational characteristics and management requirements, but must ensure that the information is presented fully, clearly, and easily checked and controlled.
Decision 48 : Enterprises shall prepare documents and accounting books according to the forms prescribed in Decision 48.
3. Accounting principles and provisions:
Circular 133:
- Only prescribe accounting principles
- No detailed instructions on accounting entries. Enterprises make their own accounting entries in accordance with the document circulation process, as long as the financial statements are correct.
- Enterprises choose their own bookkeeping currency that meets the prescribed regime criteria.
- Enterprises can decide whether or not to record revenue from internal transactions regardless of the issued documents.
- Enterprises are allowed to decide for their dependent accounting units to record capital from the enterprise as liabilities or equity.
- Enterprises can choose financial statement forms according to decreasing liquidity or distinguish between short-term and long-term according to tradition.
Decision 48:
- Detailed regulations on accounting entries
- Record in Vietnamese Dong
- Revenue recognition from internal transactions is based on issued documents such as VAT invoices or internal delivery and warehouse receipts.
- Clearly stipulate the financial statement form and the enterprise must apply it.
3. Change the account system
| CHANGES TO THE ACCOUNTING SYSTEM ACCORDING TO Circular 133/2016/TT-BTC AND DECISION 48/2006/QD-BTC | ||||
| CIRCULAR 133 (SMEs) | DECISION 48/2006/QD-BTC | |||
| Level 1 Account | Level 2 Account | Account Name | Level 1 | Account Name |
| ASSET ACCOUNT TYPE | ASSET ACCOUNT TYPE | |||
| 136 | Internal receivables | |||
| 142 | Short-term prepaid expenses | |||
| 151 | Purchased goods are on the way | |||
| 159 | Provisions | |||
| 221 | Long-term financial investment | |||
| 228 | Investing in other entities | |||
| 229 | Asset loss provision | 229 | Provision for impairment of long-term financial investments | |
| 2291 | Provision for impairment of trading securities | |||
| 2292 | Provision for loss of investment in other entities | |||
| 2293 | Provision for doubtful debts | |||
| 2294 | Provision for inventory write-down | |||
| 244 | Long-term deposit and bet | |||
| TYPE OF LIABILITIES PAYABLE ACCOUNT | TYPE OF LIABILITIES PAYABLE ACCOUNT | |||
| 311 | Short term loan | |||
| 315 | Long-term debt due | |||
| 336 | Internal payables | |||
| 351 | Unemployment benefit reserve fund | |||
| 353 | Welfare reward fund | |||
| 356 | Science and Technology Development Fund | |||
| TYPE OF OWNER'S EQUITY ACCOUNT | TYPE OF OWNER'S EQUITY ACCOUNT | |||
| 431 | Welfare reward fund | |||
| REVENUE ACCOUNT TYPE | REVENUE ACCOUNT TYPE | |||
| 521 | Revenue deductions | |||
| ACCOUNT TYPE 0 (OFF-BASKET ACCOUNT) | ||||
| 001 | Outsourced assets | |||
| 002 | Materials, goods for safekeeping, processing | |||
| 003 | Goods accepted for sale, consignment, and deposit | |||
| 004 | Bad debt resolved | |||
| 007 | Foreign currencies |
With the innovation of policy approaches, emphasizing the feasibility of application in business practice as well as valuing the nature over the form and name of transactions, for the first time the Accounting Regime for Small and Medium Enterprises has strong statements about the difference between revenue, accounting profit expenses compared to taxable revenue, deductible expenses and taxable expenses. Accounting is now not a story of Debt - Credit, the final product of accounting is the information published on the financial statements, the key is that the information on the financial statements must be honest, transparent and presented consistently.
Han Thuy Linh – Lecturer, Faculty of Accounting
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