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Circular No. 48 / 2019 / TT-BTC guiding the setting up and handling of reserves for stock price decrease

Circular 48 / 2019 / TT-BTC Detailed guidance on the setting up and handling of reserves for stock price decrease, investment losses and receivable debts bad and product warrantym, goods, services, construction works at the enterprise.


The content of Circular 48/2019/TT-BTC has the following points to pay attention to:

Enterprises are applied

1. This Circular guides the setting up and handling of provisions for devaluation of inventories, for loss of investments, for loss of bad debts and for product and goods warranty. goods, services and construction works as a basis for determining deductible expenses when determining taxable income of corporate income tax according to regulations.

The setting up of reserves for the purpose of making and presenting financial statements of economic organizations complies with the accounting law.

2. This Circular applies to economic organizations (hereinafter referred to as enterprises) that are established and engaged in production and business activities according to the provisions of Vietnamese law.


What is backup?

1. Provision for devaluation of inventories: means the provision when there is a decrease in the net realizable value of goods that is lower than the carrying amount of the inventory.

2. Provision for impairment of investments means a provision for loss of value that can occur due to a decrease in the prices of securities held by the enterprise and for impairment that may occur due to impairment. Other corporate investments in economic organizations that receive contributed capital (excluding offshore investments).

3. Provisions for bad debts: are provisions for the loss value of receivable debts which are overdue and overdue receivable debts which are likely to be irrecoverable on time.

4. Warranty reserve for construction products, goods, services or works is the cost contingency for products, goods, services or construction works that have been sold, provided or handed over to but the buyer is still obliged to continue to repair and complete the contract or as committed with the customer.

What is the purpose of room building iteration?

Provisions specified in this Circular shall be included in deductible expenses when determining taxable income in the annual reporting period to offset possible losses in the following year's reporting period; ensure that the value of inventories, investments is not higher than market price and the value of receivables is not higher than the recoverable amount at the time of financial statements. five.


1. This Circular takes effect from October 10, 10 and applies from fiscal year 2019.

2. To annul Circular No. 228/2009 / TT-BTC dated December 07, 12 of the Ministry of Finance guiding the setting up and use of provisions for devaluation of inventories and loss of financial investments. main, bad debts and warranty for products, goods, construction works at the enterprise; Circular No. 2009/34 / TT-BTC dated 2011/14/3 of the Ministry of Finance amending Circular No. 2011/228 / TT-BTC dated 2009/07/12; Circular No. 2009/89 / TT-BTC dated 2013/28/06 of the Ministry of Finance amending and supplementing Circular No. 2013/228 / TT-BTC dated 2009/7/12 and other documents providing setting up and using provisions contrary to the provisions of this Circular.

3. The implementation of provisions for enterprises operating in a number of specific sectors (insurance, securities, capital investment and business, debt trading, retail sales of goods with deferred payment / installment payments ) comply with the guidance in this Circular and comply with separate regulations (if any) in accordance with specific guidance of the Ministry of Finance.

4. State-owned enterprises and enterprises with 100% charter capital invested by State-owned enterprises transformed into joint-stock companies shall handle provisions according to the provisions of the law on equitization.

5. The balance of provision for offshore investments that enterprises have made up to before the effective date of this Circular (if any) is reversed and recorded as a decrease in expenses at the time of making annual financial statements. 2019.

In the course of implementation, if any problems arise, they should be promptly reported to the Ministry of Finance for study, supplementation and amendment./.

See Circular 48/2019/TT-BTC here