Account 338 – Other payables

1.Rules for accounting

a) This account is used to record payment of accounts payable other than accounts in group of Account 33 (from Account 331 to Account 337). This account is also used for accounting for unearned revenues from services provided for customers and differences in prices incurring in transactions of purchase and leaseback of assets under finance lease or operating lease.

b) Structure and contents of account 338:

- Value of assets in surplus whose reasons are not uncovered awaiting resolution of competent agency; Value of assets in surplus to be returned to individuals, groups (inside and outside units) as prescribed in the decision of competent agency written in resolution report, if the reasons were determined.

- Appropriated amount and payment for social insurance, health insurance, and unemployment insurance and trade union fees;

- Amounts deducted from salaries of employees according to the judgment of the Court;

- Amount of profits or dividends payable to owners;

- Temporary loans or borrowing of materials or goods, capital contributed to BCC which does not require a new legal entity.

- Amounts received on behalf of a third party payable or amounts received from the trustor to pay import duty, export duty or VAT on imported goods and pay on behalf of the trustor;

- Pre-payment for financial lease, infrastructure, interests of capital loans or purchase of debt instruments collected from clients during several accounting periods.

- The difference between selling prices under deferred or installment payment as committed and cash price.

- Amount payables for sale of shares of state capital when equitizating a wholly-state-owned enterprise.

- The positive difference between selling price and residual value of leased back fixed assets is financial lease; the positive difference between selling price and fair value of leased back fixed assets is operating lease;

- Other payables, such as payables for sale of voluntary pension insurance, life insurance and other grants (other salaries) for employees, etc.

c) Other payables in foreign currencies or payment of other payables must be kept records in details and the converting from foreign currencies into accounting currencies according to following rules:

- When incurring payables in foreign currencies, those payables shall be converted into VND according to actual exchange rates at the incurring time (selling exchange rate of the commercial bank where the enterprise regularly enters into transactions);

- When paying other payables in foreign currencies, they must be converted into specific identification bookkeeping rate;

- At the end of the accounting period, the balance of other payables shall be re-evaluated according to actual exchange rates at the incurring time (selling exchange rate of the commercial bank where the enterprise regularly enters into transactions) and recorded to financial expenses, or financial income. Unearned revenues in foreign currencies shall not be re-evaluated if it is not evident that the enterprise is required to return those re-payments to clients in foreign currencies.

2.Structure and contents of account 338 – Other payables

Debit:

- Transferring value of assets in surplus into relevant accounts according to decision written in resolution report;

- Trade union fees disbursed at units;

- Amounts of social insurance, health insurance, unemployment insurance, trade union fees paid to manage fund agencies of social insurance, health insurance, unemployment insurance and trade union fees.

- Unearned revenues calculated for every accounting period; pre-payment returned to clients if the enterprise does not keep leasing assets;

- Difference between selling price under deferred or installment payment as committed and cash price (deferred interests) allocated to financial expenses;

- Transferring positive difference between the selling price and residual value of leased back fixed assets which is financial lease to record as a decrease in operating expenses;

- Transferring positive difference between the selling price and fair value of leased back fixed assets which is operating lease to record as a decrease in operating expenses;

- Paying amounts collected from equitization of wholly-state-owned enterprises to enterprise arrangement fund;

- Transferring difference between equitization expenses (-) amounts collected from equitization of state companies;

- Other payables.

Credit:

- Value of assets in surplus awaiting for resolution (without reasons); Value of assets in surplus payable to individuals or groups (inside and outside units) according to the decision written in resolution report because the reasons are uncovered instantly;

- Appropriating social Insurance, health Insurance, unemployment insurance and trade union fees into operating expenses or salaries of employees;

- Payment with employees on collective housing rents, electricity and water expenses;

- Overspending trade union fees which are granted additionally;

- Amounts of social insurance given by social insurance agencies which are paid to employees

- Unearned revenues incurred during a period;

- The difference between selling prices under deferred or installment payment as committed and cash price.

- The positive difference between selling price and residual value of leased back fixed assets which is financial lease;

- The positive difference between selling price and fair value of leased back fixed assets which is operating lease;

- Total amounts collected from sale of shares of state capital; positive difference between actual values of state capital determined when the wholly-state-owned enterprise converts into joint-stock company and actual value of state capital when the enterprise's value is determined;

- Temporary loans or borrowings of materials or goods, or capital contributed to BCC which does not require a new legal entity;

- Return of receipts on behalf of other units;

- Other payables.

Credit balance:

- Accrued social insurance, health insurance and trade union fees which have not been paid to management agency or unspent trade union fees;

- Value of assets in surplus awaiting resolution;

- Unearned revenues incurred at the end of accounting period;

- Positive difference between selling price and residual value of leased back fixed asset without transferring;

- Total amounts collected from sale of shares of state capital; positive difference between actual value of state capital determined when the wholly-state-owned enterprise converts into joint-stock company and actual value of state capital when the value to-be-paid of the enterprise at the end of the accounting period is determined;

- Other payables.

This account may have debit balance: Debit balance shall reflect payment in excess of accounts payable, or sums of social insurance paid to employees who have not yet been settled, and overspending trade union fees not being granted additionally.

Account 338 – Other payables, comprises 8 sub-accounts:

- Account 3381 – Assets in surplus awaiting resolution: records value of assets in surplus without reasons awaiting resolution of the competent agency. In case the reasons for surplus are uncovered and there is resolution report, the assets in surplus shall be recorded to relevant accounts, not to account 338 (3381).

- Account 3382 – Trade union fees: records accruement and payment of trade union fees at units.

- Account 3383 – Social insurance: records accruement and payment of social insurance at units.

- Account 3384 – Health insurance: records accruement and payment of health insurance at units.

- Account 3385 – Payables on equitization: records amounts collected from sale of shares of state capital payables, positive difference between actual value of state capital when the wholly-state-owned enterprise converts into joint-stock company and actual value of state capital when the enterprise‘s value is determined;

- Account 3386 – Unemployment insurance: records accruement and payment of unemployment insurance at units.

- Account 3387 – Unearned revenues: records current amounts and increases and decreases in unearned revenues of the enterprise during a period. Unearned revenues include: amounts of customers paid in advance for one or many accounting periods for asset lease; interests received in advance when lending or buying debt instruments; or the difference between selling prices under deferred and from installment payment as committed and cash price; revenues corresponding to the value of goods, services or discounts to clients in the traditional client programs, etc. The following amounts shall be not recorded to this account:

+ Amounts received in advance from buyers that enterprise has not provided goods or services;

+ Revenue has not earned from asset lease or services provided for several accounting periods (unearned revenue is only recorded when the revenue is actually collected, not recorded corresponding to TK 131 – Trade receivables).

- Account 338 – Other payables: records other payables of the unit other than payables recorded to accounts from 3381 to 3387.

3.Method of accounting for several major transactions

3.1. Assets in surplus without reasons awaiting resolution:

a) When discovering assets in surplus, their value shall be recorded according to the fair value as follows:

Dr 111, 152, 153, 156, 211 (according to fair value)

Cr 338 – Other payables (3381).

b) When there is the resolution report on surplus in assets issued by the competent agency, the following accounts shall be recorded:

Dr 338 – Other payables (3381).

Cr 411 – Owner's invested equity; or

Cr 441 – Capital expenditure funds;

Cr 338 – Other payables (3388);

Cr 642 – General administration expenses

Cr 711 – Other income.

3.2. Accounting for surplus of assets in case of equitization of wholly-state-owned enterprise

- When receiving notification or decision on equitization issued by the competent agency, the equitized enterprise must conduct physical inventory count and classify assets under management and use of the enterprise when the enterprise‘s value is determined. According to the report on money inventory when determining the enterprise‘s value, the value of money in surplus shall be recorded as follows:

Dr 111, 112.

Cr 3381 – Assets in surplus awaiting resolution

Surplus of assets: the enterprise shall keep records of surplus of assets discovered under physical inventory count in the financial statement.

- Accounting for assets in surplus or shortage: with regard to assets in surplus, according to ―Report on resolution to shortage or surplus of assets under physical inventory count‖, the following accounts shall be recorded:

Dr 3381 – Assets in surplus awaiting resolution

Cr 331 – Trade payables (if the assets in surplus belong to the seller)

Cr 338 – Other payables (3388);

Cr 411 – Owner's invested equity (regarding assets in surplus unable to uncover reasons or owners).

3.3. Accounting for social insurance, health insurance, unemployment insurance, or trade union fees

- When appreciating social insurance, health insurance, unemployment insurance, or trade union fees, the following accounts shall be recorded:

Dr 622, 623, 627, 641, 642 (amounts included in operating expenses)

Dr 334 – Payables to employees (amounts deducted from salaries of employees)

Cr 338 – Other payables (3382, 3383, 3384, 3386).

- When paying social insurance, health insurance, unemployment insurance, or trade union fees, the following accounts shall be recorded:

Dr 338 – Other payables (3382, 3383, 3384, 3386).

Cr 111, 112, etc.

- When paying social insurance to employees in case of sick leave or maternity leave, etc, the following accounts shall be recorded:

Dr 338 – Other payables (3383).

Cr 334 – Payables to employees.

- When spending trade union fees at units, the following accounts shall be recorded:

Dr 338 – Other payables (3382).

Cr 111, 112, etc.

- When receiving compensation for overspending trade union fees, the following accounts shall be recorded:

Dr 111, 112.

Cr 338 – Other payables (3382).

3.4. When applying for loans or borrowings of materials or goods, or capital contributed to BCC which does not required a new legal entity, the following accounts shall be recorded:

Dr 111, 112, 152, 153, 156, etc.

Cr 338 – Other payables.

3.5. Accounting for unearned revenues on operating lease of fixed assets, investment properties, unearned revenues of accounting period are determined by total of money collected from operating lease of fixed assets, property investment dividing for number of periods having amount received in advance from operating lease of fixed assets, property investment (if the total advance is recorded to revenues one time):

- When receiving rents for lease of fixed assets or property lease for many years which are prepaid by customers, unearned revenues at VAT-exclusive prices shall be recorded as follows:

Dr 111, 112, etc. (total advances)

Cr 3387 – Unearned revenues (VAT-exclusive prices)

Cr 3331 – VAT payables (33311).

- When calculating and recording revenue of every accounting period, the following accounts shall be recorded:

Dr 3387 – Unearned revenues

Cr 511 – Revenues (5113, 5117).

- If the asset-leasing contract fails to be performed, when returning money to clients, the following accounts shall be recorded:

Dr 3387 – Unearned revenues (VAT-exclusive prices)

Dr 3331 – VAT payable (amounts returned to the lessee for VAT on non-performance of asset-leasing contract)

Cr 111, 112, etc (returned amounts).

3.6. Accounting for sale using deferred or instalment payment:

- When selling goods using deferred or instalment payment, the revenues of the accounting period shall be recorded according to cash prices, the difference between deferred price and cash price shall be recorded to account 3387 ―Unearned revenues‖ as follows:

Dr 111, 112, 131, etc.

Cr 511- – Revenues (according to VAT-exclusive cash prices)

Cr 3387 – Unearned revenues (difference between deferred price and VAT-exclusive cash price)

Cr 333 – Taxes and other payables to the State (3331).

- Periodically, when calculating and transferring profits from sale using deferred or instalment payment during a period, the following accounts shall be recorded:

Dr 3387 – Unearned revenues

Cr 515 – Financial income.

- When actually collecting amounts of sale using deferred or instalment payment, including difference between selling price under deferred or installment payment as committed and cash price, the following accounts shall be recorded:

Dr 111, 112, etc.

Cr 131 – Trade receivables.

- And the costs of goods sold shall be recorded as follows:

+ When selling goods, the following accounts shall be recorded:

Dr 632- Costs of goods sold

Cr 154 (631), 155, 156, 157, etc.

+ When liquidating or selling an investment property, the following accounts shall be recorded:

Dr 632- Costs of goods sold (residual value of the investment property)

Dr 214 – Depreciation of fixed assets (2147) (accumulated depreciation - if any)

Cr 217 – Investment property.

3.7. If the selling price of the leased back fixed asset which is financial lease is greater than their residual value:

- When completing procedures for sale of assets, the following accounts shall be recorded according to relevant invoices and documents:

Dr 111, 112, etc. (total payment)

Cr 711- Other income (residual value of leased back fixed asset)

Cr 3387 – Unearned revenues (positive difference between selling price and residual value of fixed asset)

Cr 3331 – VAT payables.

And a decrease in fixed asset shall be recorded as follows:

Dr 811 - Other income (residual value of leased back fixed asset)

Dr 214 – Depreciation of fixed assets (depreciation value) (if any)

Cr 211 – Tangible fixed asset (historical cost).

- Periodically, when transferring positive difference (profit) between the selling price and residual value of financial leased back fixed assets which are financial lease to record as a decrease in operating expenses in conformity with lease term; the following accounts shall be recorded:

Dr 3387 – Unearned revenues

Cr 623, 627, 641, 642, etc.

3.8. Enterprises which have not allocated all profits on exchange differences in the before-operation stage (recorded to account 3387 – Unearned revenues) must transfer total profits on exchange differences to financial income to determine income summary during a period, and the following accounts shall be recorded:

Dr 3387 – Unearned revenues

Cr 515 – Financial income.

3.9. Accounting for payables on equitization of wholly-state-owned enterprise.

- When collecting amounts from sale of shares of state capital in the enterprise, the following accounts shall be recorded:

Dr 111, 112.

Cr 3385 – Payables on equitization.

- Accounting for policies for employees in excess of the enterprise: According to the decision on determination of amounts collected from sale of shares to support policies for employees in excess of the enterprise, the following accounts shall be recorded:

Dr 3385 – Payables on equitization.

Cr 334 – Payables to employees.

When paying money to employees actually, the following accounts shall be recorded:

Dr 334 – Payables to employees.

Cr 111, 112.

- Settlement of equitization expenses: at the end of the equitization progress, the enterprise must send a report and make settlement of equitization expenses with the agency deciding the equitization. The equitization expenses shall be offset against amounts collected from equitization of enterprise, the following accounts shall be recorded:

Dr 3385 – Payables on equitization.

Cr 1385 – Payables on equitization (equitization expenses in details).

When paying amounts collected from equitization (after offsetting equitization expenses) to enterprise arrangement fund in the parent company of the economic group, general state-owned company, parent company in the parent company—subsidiary relationship or Enterprise Arrangement and Development Fund held by State Capital and Investment Corporation, the following accounts shall be recorded:

Dr 3385 – Payables on equitization.

Cr 111, 112.

- If the enterprise is not permit to use amounts collected from sale of shares, the interest payable shall be deducted from amounts payable on equitization but not recorded to financial expenses, the following accounts shall be recorded:

Dr 3385 – Payables on equitization.

Cr 335 – Accrued expenses.

When paying money to investors, the following accounts shall be recorded:

Dr 335 – Accrued expenses.

Cr 111, 112.

- Accounting for difference between the actual value of state capital when the state-owned enterprise converts into joint-stock company and the actual value of state capital when the enterprise‘s value is determined.

+ If the actual value of state capital when the state-owned enterprise converts into joint-stock company is greater than the actual value of state capital when the enterprise‘s value is determined, when paying positive difference between them (profits) to enterprise arrangement fund in the parent company of the economic group, general state-owned company, parent company in the parent company – subsidiary relationship or Enterprise Arrangement and Development Fund held by State Capital and Investment Corporation, the following accounts shall be recorded:

Dr 421 - Undistributed profits after tax

Cr 3385 – Payables on equitization.

When paying amounts collected from equitization (after offsetting equitization expenses) to enterprise arrangement fund in the parent company of the economic group, general state-owned company, parent company in the parent company—subsidiary relationship or Enterprise Arrangement and Development Fund held by State Capital and Investment Corporation, the following accounts shall be recorded:

Dr 3385 – Payables on equitization.

Cr 111, 112.

+ If the actual value of state capital determined when the wholly-state-owned enterprise converts into joint-stock company is smaller than the actual value of state capital when the enterprise's value is determined; the negative difference between them (losses) shall be recorded as follows:

If the group or individual is subject to compensation, the following accounts shall be recorded:

Dr 138 – Other receivables (1388)

Cr 421 - Undistributed profits after tax.

When receiving compensation from the group or individual, the following accounts shall be recorded:

Dr 111, 112.

Cr 138 – Other receivables (1388).

If the negative difference is caused by objective reasons, or subjective reasons due to force majeure event but the offender fails to make compensation and the competent agency considers and decides to use the amounts collected from sale of shares to compensate the losses after deducting insured compensation (if any), the following accounts shall be recorded:

Dr 3385 – Payables on equitization.

Cr 421 - Undistributed profits after tax.

3.10. Accounting for the import trustee

a) When receiving money from the import trustor to buy imported goods, the following accounts shall be recorded according to relevant documents:

Dr 111, 112, etc.

Cr 338 – Other payables (3388).

b) When transferring money to make deposit to open LC (for payment using Letter of Credit), the following accounts shall be recorded according to relevant documents:

Dr 244 – Pledge, mortgages and deposits

Cr 111, 112.

c) When importing materials, equipment or goods for the trustor, the quantity, class, quality of the entrusted imported goods, import duration, payment entity, etc, shall be recorded to the trustee's administration system and financial statement; the value of entrusted import goods shall not be recorded to balance sheet.

d) Accounting for the import entrustment payment:

- When transferring deposit for L/C to overseas sellers as a portion of the import entrustment payment, the following accounts shall be recorded:

Dr 138 – Other receivables

Cr 244 – Pledge, mortgages and deposits.

- When making payment of entrusted imported goods to overseas seller, the following accounts shall be recorded:

Dr 138 – Other receivables (if the trustor has not given advance for purchase of imported goods)

Dr 3388 - Other payables (deducted from the amounts received from the trustor)

Cr 111, 112, 3388, etc.

- Import duty, VAT on imported goods, special excise tax paid on behalf of the import trustor: in the export – import entrustment transaction (export-import entrustment contract is required), the trustee shall be the representative of the trustor to fulfill obligation with the government budget (taxpayer on behalf of the trustor), or tax liability taken over by the trustor. In this case, the trustee only records amounts of money paid to government budget as amount paid on behalf of the trustor. When paying to government budget, the following accounts shall be recorded:

Dr 138 – Other receivables (return of amounts paid on behalf of the trustor)

Dr 3388 - Other payables (deducted from the amounts received from the trustor)

Cr 111, 112.

dd) Regarding import entrustment expenses and VAT on import entrustment expenses, the revenues from import entrustment expenses shall be recorded as follows according to VAT invoices and relevant documents:

Dr 131, 111, 112, etc. (total payment)

Cr 511 – Revenues (5113)

Cr 3331 – VAT payables.

e) When make payment related to import entrustment (banking fees, customs inspection fees, warehouse rents, depot rents, material handling expenses, delivery expenses, etc) on behalf of the import trustor, the following accounts shall be recorded according to relevant documents:

Dr 138 – Trade receivables (every import trustor in details)

Cr 111, 112, etc.

g) When offsetting receivables against payables at the end of the transaction, the following accounts shall be recorded:

Dr 338 – Other payables

Cr 138 – Other receivables,

3.11. Accounting for the export trustee

a) When exporting materials, equipment or goods for the trustor, the quantity, class, quality of the entrusted exported goods, export duration, payment entity, etc, shall be recorded to the trustee's administration system and financial statement; the value of entrusted export goods shall not be recorded to balance sheet. The payment of export duty (if any) shall comply with regulations of account 333 – Taxes and other payables to the State.

b) When paying on behalf of the export trustor, the following accounts shall be recorded:

Dr 138 – Other receivables (1388)

Cr 111, 112.

c) When receiving amount of money from the overseas purchaser, such amount shall be recorded to payables to trustor as follows:

Dr 112 – Cash in bank

Cr 338 – Other payables (3388).

d) When offsetting receivables against payables, the following accounts shall be recorded:

Dr 338 – Other payables

Cr 138 – Other receivables,

3.12. When determining profits or dividends payable to owners, the following accounts shall be recorded:

- When determining amounts payable, the following accounts shall be recorded:

Dr 421 - Undistributed profits after tax

Cr 338 – Other payables (3388).

- When paying profits or dividends to owners, the following accounts shall be recorded:

Dr 338 – Other payables (3388).

Cr 111, 112 (amount of profits or dividends payable to owners)

Cr 3335 – Personal income tax (if the personal income tax of the owner is deducted at source).

3.13. When preparing financial statement, balance of other payables in foreign currencies according shall be re-evaluated according to actual exchange rates:

- If incurring losses of exchange rates, the following accounts shall be recorded:

Dr 413 – Exchange rate differences

Cr 338 – Other payables.

- If incurring profits of exchange rates, the following accounts shall be recorded:

Dr 338 – Other payables

Cr 413 – Exchange rate differences.

Source: Circular 200