On December 9, 2013, the Government promulgated Decree No. 206/2013/ND-CP on management of debts of enterprises with 100% State-owned charter capital.
Enterprises shall draft and issue Regulations on debt management (applicable to both receivables and payable), clearly identifying responsibilities of collectives and individuals (Members’ Council, chairperson of the Members’ Council (company president), director general (director), chief accountant and other related persons) for monitoring, collecting and paying debts.
Comparing, confirming and classifying debts, urging the collection thereof and proactively handling outstanding debts according to the law.
For bad debts or unplayable debts, enterprises shall first of all make deductions to set up provisions according to regulations and apply every measure to recover debts and share difficulties with creditors and debtors in the handling of debts through freezing, rescheduling, write-off, purchase and sale.
Enterprises shall report on cases beyond their handling capacity and competence to competent agencies for settlement support measures. Receivables and payable in foreign currencies must be converted into Vietnam dong at the time of accounting and making financial statements in accordance with law.
Exchange rate differences arising in a period and resulting from the revaluation of the balances of receivables and payables in foreign currencies at the end of a fiscal year must be handled under regulations of the Ministry of Finance.
For bad debts or unpayable debts, enterprises shall first of all make deductions to set up provisions according to regulations and apply every measure to recover debts and share difficulties with creditors and debtors in the handling of debts through freezing, rescheduling, write-off, purchase and sale.
Enterprises shall report on cases beyond their handling capacity and competence to competent agencies for settlement support measures. Receivables and payables in foreign currencies must be converted into Vietnam dong at the time of accounting and making financial statements in accordance with law.
Exchange rate differences arising in a period and resulting from the revaluation of the balances of receivables and payables in foreign currencies at the end of a fiscal year must be handled under regulations of the Ministry of Finance.
Also in this Decree, enterprises shall ensure their ratio of payables to equity not exceeding three times according to the Government’s regulations on financial management of enterprises with 100% state-owned charter capital.
When wishing to raise capital in excess of the prescribed level for investment in important projects, enterprises shall draw up detailed plans, specifying the plan on debt payment and balance of cash flows for payment, and report them to the owners for consideration and decision on the principle that capital must only be raised for projects that can ensure debt payment and effectiveness.
This Decree takes effect on February 1, 2014
To download this Decree, please click this link: 54933_206-2013-ND-CP
Source: www.luatvietnam.vn
