CIRCULAR

GUIDELINES ON ACCOUNTING FOR SOCIAL AND CHARITY ACTIVITIES

Pursuant to the Law on Accounting dated November 20, 2015;

Pursuant to the Government’s Decree No. 174/2016/ND-CP dated December 30, 2016 providing guidelines for implementation of the Law on Accounting;

Pursuant to the Government’s Decree No. 93/2019/ND-CP November 25, 2019 prescribing organization and operation of social and charity funds;

Pursuant to the Government’s Decree No. 93/2021/ND-CP dated October 27, 2021 prescribing mobilization, receipt, distribution and use of voluntary contributions for covering costs of natural disaster, epidemic and incident recovery and supporting patients with fatal disease;

Pursuant to the Government’s Decree No. 87/2017/ND-CP dated July 26, 2017 defining functions, tasks, powers and organizational structure of the Ministry of Finance of Vietnam;

At the request of the Director of the Department of Accounting and Auditing Regulations;

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Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Circular provides guidelines on accounting for social and charity activities performed by organizations, agencies and units, and bookkeeping and preparation of reports on social and charity activities performed by individuals in accordance with regulations of law, including:

1. Activities of social and charity funds as prescribed in the Government’s Decree No. 93/2019/ND-CP dated November 25, 2019.

2. Receipt, distribution and use of voluntary contributions of domestic and foreign organizations, agencies, units and individuals as prescribed in the Government’s Decree No. 93/2021/ND-CP dated October 27, 2021.

3. Accounting for receipt, distribution and use of other voluntary contributions of domestic and foreign organizations, agencies, units and individuals for the purposes of assisting disadvantaged persons which is compulsory as prescribed by law shall comply with the provisions of this Circular.

Article 2. Regulated entities

This Circular applies to:

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2. Canvassing boards of “For the Poor” funds at all levels (including central, provincial, district and commune levels).

3. Organizations, agencies, units and individuals that canvass, receive, distribute and use voluntary contributions for social and charity activities.

Article 3. Accounting rules and requirements for social and charity activities

1. Accounting rules

Any organizations, agencies, units and individuals involved in canvassing, receipt, distribution and use of voluntary contributions for social and charity activities are required to open accounting books to record all economic transactions, prepare reports and disclose information in accordance with the provisions of this Circular and relevant laws.

2. Accounting requirements

a) Organizations, agencies or units performing social and charity activities for which accounting works are organized separately from those for their canvassing, receipt, distribution and use of voluntary contributions shall open accounting books to record all economic transactions and prepare financial statements in an adequate and transparent manner as prescribed in this Circular.

b) An organization, agency or unit that performs social and charity activities on a part-time basis without organizing separate accounting works for their canvassing, receipt, distribution and use of voluntary contributions shall record all business operations on the same accounting books in conformity with their applicable accounting policies. These activities must be recorded in separate books in order to ensure that such amounts are properly managed and used. They shall prepare annual or periodical reports on revenues and expenses associated with their social and charity activities in accordance with the provisions of this Circular; disclose data and information in accordance with regulations of law, and provide separate notes of data on social and charity activities in their financial statements in a clear and transparent manner.

c) Individuals performing social and charity activities who are required to open books to record all acts of receiving, distributing and using voluntary contributions shall comply with the provisions of this Circular; make reports and disclose information on their receipt, distribution and use of such contributions in accordance with regulations of law.

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SPECIFIC PROVISIONS

Section 1. ORGANIZATIONS, AGENCIES OR UNITS ORGANIZING SEPARATE ACCOUNTING FOR THEIR SOCIAL AND CHARITY ACTIVITIES (hereinafter referred to as “accounting units”)

Article 4. Accounting records

Accounting units may design their own accounting records to reflect their economic transactions. Such designed accounting records must have all of 7 contents specified in Article 16 of the Law on Accounting, and meet recording and management requirements of the accounting unit.

With regard to payments made directly to beneficiaries (in cash, in kind or goods), supporting documents for such payments (or attached statements) must bear signatures of such beneficiaries and certification of local competent authorities in accordance with regulations of law in force.

Article 5. Accounts

1. Accounts regularly, continuously and systematically reflect assets, funds and debts payable; receipt and use of contributions received from organizations and individuals, funding derived from state budget and other funding sources; business performance and economic transactions of the accounting unit.

2. Chart of accounts

a) Accounts on the balance sheet include accounts of type 1 to 9, and apply double-entry bookkeeping (i.e. every entry shall be recorded in both sides of an account); shall be used for reflecting and recording assets, debts, funds, revenues, expenses, and surplus (or deficit) during the accounting period.

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c) In case a specific percentage of received contributions is used for covering administrative expenses, or the report on receipt and use of funding for administrative expenses is required by competent authorities, the receipt, use and remaining amounts carried forward to the following year of funding for administrative expenses shall be recorded both on the balance sheet and off the balance sheet.

3. Application of chart of accounts

a) Based on the chart of accounts enclosed herewith, accounting units shall select accounts suitable for their operations and financial mechanisms.

b) Accounts may be modified in the following cases:

- Subaccounts of accounts on the chart of accounts (provided in Appendix 01 enclosed herewith) may be created to meet management requirements of the accounting unit.

- The addition of any account of the same tier with that of an account on the chart of accounts (provided in Appendix 01 enclosed herewith) shall be made with the written approval given by the Ministry of Finance of Vietnam.

4. The chart of accounts, contents, structure and methods for recording such accounts are provided in Appendix 01 enclosed herewith.

Article 6. Accounting books

1. Accounting books shall be intended for recording, systematizing and retaining all economic and financial transactions already arising of accounting units. The management and retention of accounting books shall comply with regulations of the Law on Accounting, relevant legislative documents and the provisions of this Circular.

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a) Each accounting unit shall use only one accounting book system for an annual accounting period, including general accounting book and subsidiary accounting books.

Depending on its applied accounting method, the accounting unit shall create both general accounting book and subsidiary accounting books, and ensure adequate and correct contents, order and method for recording of each accounting book form.

b) Form of general accounting book:

- Journals are intended for recording economic/financial transactions in chronological order. An accounting unit may, where necessary, record economic/financial transactions in chronological order and classify or systematize them according to economic contents. Data on a journal reflects all economic/financial transactions that arise during an accounting period.

- Ledger is intended for recording economic/financial transactions according to economic contents (or accounts). An accounting unit may record economic/financial transactions on the ledger in chronological order and according to economic contents. Data on the ledger reflects assets, funds, debts, revenues and expenses of an accounting unit.

c) Forms of subsidiary accounting books and sheets:

Subsidiary accounting books/sheets are intended for reflecting or recording transactions in detail in order to meet management requirements. Data on subsidiary accounting books is the specific information serving the performance of internal management tasks of an accounting unit as well as the computation and creation of items of its financial statements and other reports (if any).

Based on management and bookkeeping requirements for each accounting subject, accounting units are allowed to create more detailed items (columns/lines) on their subsidiary accounting books to serve their preparation of financial statements, final statements and other reports as well as their management requirements.

3. Responsibility of bookkeepers

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b) Economic/financial transactions must be recorded in the accounting books in chronological order. Information and data recorded in an accounting book of the following year must continue those on the accounting book of the preceding year, and have their continuity from the opening to closing of the book ensured.

c) Accounting books must be strictly managed; The persons responsible for keeping and recording accounting books must be identified. The bookkeeper is responsible for the contents of the accounting book while he/she is assigned to keep and record such accounting book. When a new bookkeeper is assigned, the chief accountant or accountant in charge shall arrange handover of responsibility between the former bookkeeper and the new one. The former bookkeeper shall take responsibility for the period over which he/she kept and recorded the accounting book, and the new bookkeeper shall take responsibility from the date of responsibility handover. The handover record must bear certification and signature of the chief accountant or accountant in charge.

4. Opening accounting books

a) Rules for opening accounting books

An accounting book must be opened at the opening of the annual accounting period or as soon as practicable after receiving the establishment decision and starting official operations of the accounting unit. The accounting book shall be opened at the beginning of the fiscal year to transfer balance from the accounting book of the preceding year, and record all economic/financial transactions arising in the new fiscal year from January 01. Accounting units may open subsidiary accounting books to serve their management requirements.

b) Manual opening of accounting books:

The accounting unit is required to complete legal procedures for an accounting book as follows:

- For an accounting book bound in book form:

Cover’s left corner must bear accounting unit's name; cover's middle must bear the book’s name, dates of opening and closing the book, full name and signature of the person opening the book, chief accountant or accountant in charge and head of the accounting unit, date of closing or transferring the book to another person.

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+ The accounting book shall be not be considered lawful until all of above conditions are met.

- For an accounting book in separate sheet form:

+ Cover’s page must bear accounting unit’s name, page number, book’s name, month of use, and full name of the bookkeeper.

+ Separate-sheet book must bear certification and signature of the accounting unit’s head, and be registered before being used.

+ Separate-sheet book must be arranged in the order of accounts and kept in a safe and easily seen place.

c) Electronic accounting books:

The electronic accounting book must contain adequate elements of an accounting book as prescribed by the Law on Accounting. If the accounting book is kept in electronic devices, the general accounting book must be also printed and bound, and all procedures in Point b Clause 4 of this Article must be completed.

If the remaining accounting books are not printed but kept in electronic devices, the head of accounting unit must ensure that data must be safe, secured and accessible during their retention period.

5. Recording accounting books

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b) In case the accounting book is recorded manually, indelible ink must be used, no red ink shall be permitted (unless used to record adjustments). Recording procedures and forms of accounting books prescribed in Appendix 01 must be followed. When a page is fully written up, the sum of figures on such page shall be found and recorded at the beginning of the following page; no interlineations on the top or bottom of a page shall be permitted. Blank space or pages shall be crossed out. No erasures and corrections with chemicals shall be permitted.

6. Closing accounting books

a) Closing accounting book means the calculation of total number of debits and total number of credits, and ending balance of each account or total revenue, expenses, unused funds, received, dispatched and stocked goods.

b) Cash fund book must be closed at the end of each day in which transactions are made. After closing the cash fund book, verification procedures are required to ensure the accuracy and matching between the accountant’s cash book, cashier’s cash book and vault cash. A cash count sheet must be prepared within the last day of each month and shall be kept together with the cash accounting book which is prepared in the same.

c) Monitoring book of deposits at banks/treasuries must be closed at the end of each month for the purpose of verifying deposit balances with the bank/treasury; deposit verification forms (bearing certification given by the relevant bank/treasury) shall be monthly kept together with the monitoring book of deposits at banks/treasuries.

d) Accounting books must be closed at the end of the annual accounting period before financial statements are prepared. Accounting books shall be also closed in case of unscheduled stocktaking or in other cases as prescribed by law.

7. Retaining accounting books and other accounting documents: The provisions of the Law on Accounting and its guiding documents shall apply.

8. The list of accounting books, accounting book forms and guidelines for preparing accounting books are provided in Appendix 01 enclosed herewith.

Article 7. Financial statements

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Organizations, agencies and units that organize separate accounting for their social and charity activities shall be required to prepare financial statements in accordance with regulations of law.

2. Purposes of financial statements

The financial statements shall be intended for providing information on financial status, performance of financial activities, and cash flows of the accounting unit, and prepared in a manner that facilitate comparison with financial statements of previous periods and those of other units. Information provided in the financial statement is helpful to increase the accounting unit’s accountability and transparency of information on its receipt and use of donations/contributions and other resources under its management in accordance with regulations of law.

3. Reporting period

Financial statements shall be prepared at the end of each annual accounting period as prescribed in the Law on Accounting.

4. If an accounting unit has different affiliated units, the consolidated financial statements shall be prepared, include its figures and all financial information of its affiliated units and exclude all figures arising from internal transactions made between the accounting unit and its subordinate units, or between subordinate units.

5. Deadline for submission of financial statements

Annual financial statements of accounting units must be submitted to competent authorities within 90 days from the end of the annual accounting period as prescribed by law.

6. Disclosure of financial statements

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Organizations and units that canvass, receive, distribute and use voluntary contributions shall also disclose other information as prescribed in the Government’s Decree No. 93/2021/ND-CP dated October 27, 2021.

b) Disclosure deadline: Annual financial statements must be disclosed within 30 days from the date of submission as prescribed in the Law on Accounting.

7. List of reports, report forms and description of reporting methods is provided in Appendix 01 enclosed herewith.

Section 2. ORGANIZATIONS, AGENCIES OR UNITS THAT DO NOT ORGANIZE SEPARATE ACCOUNTING FOR THEIR SOCIAL AND CHARITY ACTIVITIES

Article 8. Opening accounting books

1. An organization, agency or unit (hereinafter referred to as “accounting unit”) that performs canvassing, receipt, distribution and use of voluntary contributions for their social and charity activities without organizing separate accounting works for these activities shall record all business operations on the same accounting books in conformity with their applicable accounting policies; open separate books for recording revenues and expenses on these activities, including amounts received, distributed and used for social and charity activities, in a transparent and clear manner that abides by regulations of law.

2. Regarding contributions in cash

a) All contributions shall be recorded upon receipt and sorted by donors. An accounting unit is required to open an account at a bank or treasury for receiving, distributing and using received contributions for performing social and charity activities. This account must be separated from those accounts for other activities. Construction, repair, maintenance or restoration of buildings using received voluntary contributions must comply with regulations of relevant laws in force.

b) Information on distribution and use of contributions for performing social and charity activities must be adequately recorded in accounting books, including payment time, payment decision, payment content, names and addresses of beneficiaries. Additionally:

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- Cash payments for purchase of goods, articles, or supplies, etc., and payments for construction and repair of buildings must be supported by valid and lawful invoices or receipts as prescribed by law. When donating goods or other in-kind contributions directly to beneficiaries, statements bearing signatures of such beneficiaries and certification of local competent authorities are required.

3. Regarding contributions in kind

In-kind contributions must be safely managed and promptly distributed to addresses of beneficiaries. All received contributions in kind must be recorded; the distribution of these in-kind contributions must be supported by statements or documents bearing signatures of beneficiaries and certification of local competent authorities as prescribed by law. In-kind contributions whose values cannot be determined shall be recorded in subsidiary accounting books in order to serve reporting.

Article 9. Reporting and data disclosure

1. On an annual basis or upon completion of a canvassing period, a report on revenues and expenses associated with social and charity activities shall be prepared using the form in Appendix 02 enclosed herewith, and submitted to relevant agencies/units in accordance with the provisions of the Government’s Decree No. 93/2021/ND-CP dated October 27, 2021 and relevant legislative documents (if any).

2. The accounting unit must provide detailed notes of revenues and expenses during the year, opening balance and ending balance of contributions for social and charity activities in its annual financial statements as prescribed.

3. All information concerning the canvassing, receipt, distribution and use of voluntary contributions shall be disclosed in accordance with the Law on Accounting, the provisions of the Government’s Decree No. 93/2021/ND-CP dated October 27, 2021, and relevant legislative documents (if any).

Section 3. RECORDING AND REPORTING BY INDIVIDUALS PERFORMING SOCIAL AND CHARITY ACTIVITIES

Article 10. Recording books

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1. They must open books for recording voluntary contributions received, distributed and used for social and charity activities in an accurate, truthful, open and transparent manner.

2. Recording is required as soon as every contribution is canvassed, received and distributed for performing social and charity activities. The recording book shall contain entries made continuously in chronological order and adequately reflect information to meet data disclosure requirements. When a page is fully written up, the sum of figures on such page shall be found and recorded at the beginning of the following page; no interlineations on the top or bottom of a page shall be permitted. Blank space or pages shall be crossed out. No erasures and corrections on the book shall be permitted.

3. Upon completion of the canvassing, receipt and distribution of contributions for social and charity activities, the recording book shall be closed, and total revenues, total expenses and unused amounts of contributions shall be calculated in order to make reports and disclose information as prescribed by law. With regard to contributions received and used through a deposit account opened at a bank, verification with the bank where such deposit account is opened shall be carried out on a monthly basis and upon completion of the canvassing period. Verification forms or deposit statements provided by the bank must be retained and disclosed upon completion of the canvassing period.

4. Recording of contributions for social and charity activities:

a) Regarding contributions in cash:

- The canvassing individual shall open a separate bank account for receiving contributions for social and charity activities which cannot be received through his/her personal bank account.

- Regarding contributions in cash: The canvassing individual shall be responsible for safe management of received contributions. Unused amounts of contributions may be deposited to his/her bank account for social and charity activities.

- Regarding contributions received in foreign currencies for performing domestic social and charity activities: The canvassing individual shall sell received foreign currencies to commercial banks and manage and use the proceeds from the sale of such foreign currencies in VND for performing canvassing social and charity activities as prescribed.

- Deposit interests remaining after deduction of payment fees shall be recorded as increases in received contributions.

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A general recording book of contributions in cash shall be opened using the form No. S01CN/XH-TT in Appendix 03 enclosed herewith for recording all contributions in cash upon actual receipt of the contribution, including particulars of donors (such as name, address, etc.), contribution amounts, contribution methods, including contributions through bank account or made directly in cash (sorted by VND and foreign currencies), receipt date (i.e. the date of the bank’s credit note, in case of contributions made through the bank account), addresses of beneficiaries (if designated by donors), and any other necessary information.

b) Regarding contributions in kind:

- The receipt of in-kind contributions shall depend on the canvassing individual’s warehousing, storage and transport conditions.

- The canvassing individual shall ensure safe management and prompt distribution of received contributions in kind to beneficiaries.

- A general recording book of contributions in kind shall be opened using the form No. S02CN/XH-TT in Appendix 03 enclosed herewith for recording all in-kind contributions received, including date of receipt, name and address of donor, types of contributions in kind, quantity, and addresses of designated beneficiaries (if any).

5. Recording of voluntary contributions distributed and used for social and charity activities

A general recording book of distributed contributions shall be opened using the form No. S03CN/XH-TT in Appendix 03 enclosed herewith for recording all contributions distributed, including distribution date, names and addresses of beneficiaries, distribution methods, either in cash or in kind (specific goods or articles must be specified) or through construction or repair of buildings, and must bear signatures of beneficiaries. Certification of local competent authorities may be given directly on this book or as a separate document, if required.

Cash payments for purchase of goods, articles, or supplies, etc., and payments for construction and repair of buildings must be supported by valid and lawful invoices or receipts as prescribed by law.

6. In addition to the general record books prescribed in Appendix 03 enclosed herewith, other books may be opened for recording if deemed necessary.

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Upon completion of the canvassing, receipt, distribution and use of voluntary contributions for social and charity activities, reports on revenues and expenses associated with such voluntary contributions shall be prepared and relevant information shall be disclosed in accordance with the provisions of the Government’s Decree No. 93/2021/ND-CP dated October 27, 2021, and relevant legislative documents (if any).

Such reports shall be made using the form No. B08CN/XH-TT in Appendix 03 enclosed herewith.

Article 12. Document retention

Individuals that perform canvassing, receipt, distribution and use of voluntary contributions for social and charity activities shall keep all documents prescribed in Article 10 and Article 11 of this Circular, and other relevant documents in order to serve the information disclosure as prescribed by law.

Chapter III

ACCOUNTING INSPECTION

Article 13. Accounting inspection

1. All organizations, agencies and units that canvass, receive, distribute and use voluntary contributions for social and charity activities shall bear the inspection of their adherence to regulations on accounting works of competent authorities as prescribed in the Law on Accounting.

2. Contents of inspection:

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b) The inspection of organizations, agencies and units that perform social and charity activities on a part-time basis without organizing separate accounting works for their canvassing, receipt, distribution and use of voluntary contributions shall include the inspection of their opening of subsidiary accounting books for recording their canvassing, receipt, distribution and use of voluntary contributions for social and charity activities according to their applicable accounting policies, their reporting and information disclosure as prescribed by law.

Chapter IV

IMPLEMENTATION

Article 14. Effect

1. This Circular comes into force from September 01, 2022.

2. The Circular No. 103/2018/TT-BTC dated November 14, 2018 of the Ministry of Finance of Vietnam shall cease to have effect from January 01, 2023.

3. If any legislative documents referred to in this Circular are amended or superseded, the new ones shall apply.

Article 15. Transition

1. Organizations, agencies or units that organize separate accounting works for their canvassing, receipt, distribution and use of voluntary contributions for performing social and charity activities shall continue applying their applicable accounting policies until the end of the fiscal year of 2022. From the fiscal year of 2023, they are required to open new accounting books and abide by the provisions of this Circular.

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3. When canvassing, receiving, distributing and using voluntary contributions for performing social and charity activities, organizations, agencies, units and individuals other than those specified in Clauses 1 and 2 of this Article shall abide by the provisions of this Circular from the date on which it comes into force.

Article 16. Implementation organization

1. Ministries, central-government regulatory authorities, and provincial People's Committees shall direct units, organizations and individuals that perform canvassing, receipt, distribution and use of voluntary contributions for social and charity activities under their jurisdiction or management to comply with the provisions of this Circular.

2. The Directors of the Department of Accounting and Auditing Regulations, the Department of Public Expenditure, and the Department of State Budget, Chief of the Ministerial Office, and heads of relevant units affiliated to the Ministry of Finance of Vietnam shall disseminate, instruct, inspect and implement this Circular.

PP. MINISTER
DEPUTY MINISTER




Ta Anh Tuan