ACCOUNTING PRINCIPLES FOR LIABILITIES ACCORDING TO CIRCULAR 99/2025/TT-BTC? DO FINANCIAL STATEMENTS PROVIDE INFORMATION ON A COMPANY’S LIABILITIES?

Accounting principles for liabilities according to Circular 99/2025/TT-BTC? Is it mandatory for financial statements to provide information on a company’s liabilities? What basis does a company use to determine the currency unit in accounting? Let’s find out more with Pham Consult!

Accounting principles for liabilities according to Circular 99/2025/TT-BTC?

Accounting principles for liabilities are stipulated in Appendix II of Circular 99/2025/TT-BTC, specifically as follows:

(1) The content of liabilities includes:

– Payables to suppliers;

– Dividends and profits payable;

– Taxes and other payments to the State;

– Payables to employees;

– Accrued expenses

– Internal payables

– Other payables and liabilities

– Loans and financial lease liabilities

– Issued bonds

– Received deposits and collateral

– Deferred income tax payable

– Provisions payable

– Reward and welfare fund

– Science and technology development fund

– Price stabilization fund.

Payables must be tracked in detail according to each entity, payment term, type of currency payable, and other factors as needed for the enterprise’s management.

(2) The classification of payables is carried out according to the principle:

– Payables to suppliers are commercial payables arising from the purchase of goods, services, and assets from suppliers or sellers (which are independent entities from the buyer). – Accounts payable to suppliers include accounts payable between parent and subsidiary companies, joint ventures, associated companies, and accounts payable when importing through consignees (in consignment import transactions).

– Dividend and profit payable includes dividends and profits paid by the enterprise to its owners (shareholders, members of limited liability companies, etc.).

– Internal payables include accounts payable between the head office and its subsidiaries or between subsidiaries themselves.

– Other payables include non-commercial payables not related to the purchase and sale of goods or provision of services:

+ Accounts payable related to financial expenses, such as interest payable, operating expenses for financial investments, etc.

+ Accounts payable paid by third parties; Amounts received by the consignee from the principals to make payments as instructed in consignment import/export transactions

+ Payables due to borrowing of non-monetary assets, payables for fines, compensation, surplus assets awaiting settlement, payables for social insurance, health insurance, unemployment insurance, union fees, etc.

(3) At the end of the accounting period, the enterprise shall classify the remaining terms of payables as long-term or short-term according to the principle of classification of payables stipulated in Circular 99/2025/TT-BTC.

(4) When there is evidence that a loss is likely to occur, the enterprise must immediately recognize a payable according to the prudence principle.

(5) Accounting principles for payables in foreign currency:

– The enterprise must track payments in detail in the original currency. When transactions related to payables in foreign currency occur, the enterprise must convert them to the accounting currency unit according to the principle:

+ The credit side of payable accounts shall apply the actual transaction exchange rate.

+ The debit side of accounts payable applies to the actual transaction exchange rate or the book exchange rate.

+ In cases where accounts payable involve prepayment transactions, the debit side of accounts payable applies the actual transaction exchange rate at the time of prepayment. Upon receipt of goods, services, etc., the credit side of accounts payable corresponding to the prepaid foreign currency amounts applies the actual transaction exchange rate at the time of prepayment.

– At the end of the accounting period, the enterprise must revalue the balances of accounts payable that are monetary items denominated in foreign currency using the average buying and selling exchange rate of the commercial bank where the enterprise regularly conducts transactions.

– The determination of the actual transaction exchange rate, the book exchange rate, and the revalue of foreign currency accounts payable are guided in Account 413 – Exchange Rate Differences.

Is it mandatory for financial statements to provide information on the enterprise’s accounts payable? Based on Article 14 of Circular 99/2025/TT-BTC, the purpose of financial statements is stipulated as follows:

Purpose of Financial Statements

1. Financial statements are used to provide information on the financial situation, business results, and cash flows of an enterprise, meeting the management requirements of the enterprise owner, competent authorities, and the needs of users of financial statements in making economic decisions. Financial statements must provide information about an enterprise regarding:
2. a) Assets
3. b) Liabilities
4. c) Equity
5. d) Revenue, other income, production and business expenses, and other expenses
6. e) Profit, loss, and distribution of business results
7. f) Cash flows.
8. In addition to the information in Clause 1 of this Article, enterprises must also provide other information in the “Notes to the Financial Statements” to further explain the indicators reflected in the financial statements and the accounting policies applied to record economic transactions, prepare and present the enterprise’s financial statements.

According to regulations, financial statements must provide information about an enterprise regarding:

– Assets;

– Liabilities;

– Equity;

– Revenue, other income, production and business expenses and other expenses;

– Profit, loss and distribution of business results;

– Cash flows.

Therefore, financial statements are required to provide information on the enterprise’s liabilities.

On what basis does an enterprise determine the currency unit in accounting?

According to Clause 2, Article 4 of Circular 99/2025/TT-BTC, enterprises shall determine the accounting currency based on the following factors:

– The currency that primarily affects the selling price of goods and services and is usually the currency used for listing prices and payment;

– The currency that primarily affects labor costs, raw material costs, and other production and business costs, and is usually the currency used for payment of those costs.

Note: If, based on the above factors, the enterprise has not yet determined the accounting currency, the following factors may also be considered as a basis for determining the enterprise’s accounting currency:

– The currency used to raise financial resources (the currency used when issuing debt instruments, equity instruments, etc.);

– A unit of currency regularly obtained from business activities and used for storage.