Accounting rules for liabilities

1. Liabilities of an enterprise must be kept records in details according to payment schedule, creditor, type of currency and other factors according to requirements of the enterprise.
2. Liabilities shall be classified into trade payables, intra-company payables and other payables according to following rules:

a) Trade payables include commercial amounts payable arisen from purchase of goods, services or asset and the seller is independent with the buyer, including amounts payables between parent company and subsidiaries, joint ventures or associates). Amounts payable include amounts payable when importing through the trustee (in the import trust transaction);

b) Intra-company payables include amounts payable between parent company and dependent accounting subsidiaries having no legal status;

c) Other payables include non-commercial amounts payable, or amounts payable relating to trading in goods or services:

- Payables relating to financial expenses, such as: interests payable, dividends payable and profits payable, financial investment expenses payable;

- Payables paid by another party; payables which the trustor receives from relevant entities to pay for import-export trust transactions;

- Non-commercial payables, such as: borrowings payable, fines payable, compensation payable, assets in surplus awaiting resolution, payables related to social insurance, health insurance, unemployment insurance, or union funds, etc.

3. When preparing a financial statement, the amounts payable shall be classified into long-term payables or short-term payables according to their remaining terms.
4. If it is evident that there is an unavoidable loss, an amount payable shall be recorded according to cautious rules.
5. When preparing the financial statement, these amounts payable meeting definition of accounts derived from foreign currencies (refer to account 413 – Exchange rate differences) for re-valuation at the ending of accounting period.

Source: Circular 200