VI Guidelines on accounting methods for purchasing investment real estate through deferred payments or installments into Account 217 according to Circular 99? At what price are investment real estate recorded in Account 217? How are the opening, recording, and closing of accounting books regulated? Let’s explore more with Pham Consult!
Guidelines on accounting methods for purchasing investment real estate through deferred payments or installments into Account 217 according to Circular 99?
According to Part B, Appendix II of Circular 99/2025/TT-BTC, account 217 for investment properties is regulated as follows:
- Accounting methods for some major economic transactions
3.1. When purchasing investment properties:
- a) In the case of purchasing investment properties with immediate payment, if input VAT is deductible, record:
Debit Account 217 – Investment properties
Debit Account 133 – Deductible VAT (1332)
Credit Accounts 111, 112.
If input VAT is not deductible, the original cost of the investment property includes VAT.
- b) Purchasing investment properties using deferred payment or installment methods:
– When purchasing investment properties using deferred payment or installment methods, record:
Debit Account 217 – Investment properties (cash purchase price)
Debit Account 133 – Deductible VAT (1332) (if any)
Credit Accounts 111, 112, 331,…
– Periodically, reflect the interest payable to the seller for deferred payment or installment purchase of investment properties in the financial expenses of each period, record:
Debit Account 635 – Financial expenses
Credit Account 331 – Payable to the seller.
– Periodically, when paying the seller including both principal and interest on deferred payment or installment, record:
Debit Account 331 – Payable to the seller
Credit Accounts 111, 112
3.2. In the case of investment properties formed from completed and handed-over construction:
– When construction costs for investment properties are incurred, based on relevant documents and records, the enterprise accumulates the costs on the debit side of Account 241 – Construction in Progress (similar to the construction of tangible fixed assets, as guided in the section on Account 211 – Tangible Fixed Assets).
– When the construction investment phase is completed and the investment asset is transferred to the investment property, the accountant, based on the handover documents, records:
Debit Account 217 – Investment Properties
Credit Account 241 – Construction in Progress.
Accordingly, the accounting method for purchasing investment properties on deferred payment or installment plans, as per Circular 99, is as follows:
– When purchasing investment properties on deferred payment or installment plans, record:
Debit Account 217 – Investment properties (cash purchase price)
Debit Account 133 – Deductible VAT (1332) (if applicable)
Credit Accounts 111, 112, 331,…
– Periodically, reflect the interest payable to the seller on deferred payment or installment plans for investment properties in the financial expenses of each period, recording:
Debit Account 635 – Financial expenses
Credit Account 331 – Accounts payable to the seller.
– Periodically, when paying the seller, including both principal and interest on overdue payments or installments, record:
Debit Account 331 – Accounts Payable to Sellers
Credit Accounts 111, 112
At what cost are investment properties recorded in Account 217?
According to Part B, Appendix II of Circular 99/2025/TT-BTC, investment properties are recorded in this account at their original cost. The original cost of an investment property is the total cost (cash or cash equivalents) incurred by the enterprise or the fair value of other items exchanged to acquire the investment property up to the time of purchase or completion of construction.
– Depending on the specific case, the cost of investment real estate is determined as follows:
+ The cost of purchased investment real estate includes the purchase price and directly related costs, such as: consulting service fees, registration fees, and other related transaction costs,…
+ The cost of self-built investment real estate is the actual cost and directly related costs of the investment real estate up to the date of completion of construction;
+ In the case of a leased property intended for operating leases that meets the criteria for recognition as an investment real estate, the cost of that investment real estate at the commencement of the lease is determined according to the provisions of Vietnamese Accounting Standard No. 06 – Leases.
– The following costs are not included in the cost of investment properties:
+ Initial costs incurred but not necessary to bring the investment property into a state capable of operating in the manner intended by the business.
+ Costs incurred when the investment property is first put into operation before it reaches its expected normal operating state.
+ Unusual costs related to raw materials, materials, labor, or other resources during the construction of the investment property.
How are the opening, recording, and closing of accounting books regulated?
According to Article 13 of Circular 99/2025/TT-BTC, the following is stipulated:
Opening, recording, and closing of accounting books
- Opening books: Accounting books must be opened at the beginning of the accounting year. For newly established businesses, accounting books must be opened from the date of establishment.
- Recording: Businesses must record accounting entries based on accounting documents in accordance with the Accounting Law and its amendments, supplements, or replacements. Accounting books must be recorded promptly, clearly, and completely according to their contents. The information and data recorded in the accounting books must be accurate and truthful, consistent with the accounting documents.
- Closing: Businesses must close their accounting books at the end of the accounting period to prepare financial statements and in other cases as prescribed by law.
Accordingly, the opening, recording, and closing of accounting books are regulated as follows:
– Opening: Accounting books must be opened at the beginning of the accounting year. For newly established businesses, accounting books must be opened from the date of establishment.
– Recording: Businesses must record accounting entries based on accounting documents in accordance with the Accounting Law and its amendments, supplements, or replacements. Accounting records must be kept promptly, clearly, and completely according to their contents. Information and data recorded in the accounting records must be accurate and truthful, consistent with accounting documents.
– Closing the books: Businesses must close the accounting books at the end of the accounting period to prepare financial statements and in other cases as prescribed by law.
