Account 356 - Science and technology development fund

1.Accounting Principles

a) This account is used to record the current amount, increase and decrease of science and technology development fund of enterprises. Science and technology development fund shall only be used for investment in science and technology in Vietnam.

b) Science and technology development fund is accounted for in administrative expense of enterprise management to determine income statement in period. Setting up and using science and technology development fund must comply with the provisions of law.

c) Where enterprises use science and technology development fund for research, production, testing, and sum received from the sale of testing products shall be offset against testing production cost under the following principles:

- The difference between sum received from the sale of testing products higher than testing production cost shall be recorded increase of science and technology development fund;

- The difference between sum received from the sale of testing products lower than testing production cost shall be recorded decrease of science and technology development fund;

d) Periodically, enterprises make reports on setting up, use, settlement of science and technology development and submit to competent authorities in accordance with provisions of the law.

2.Structure and content of account 356 - Science and technology development fund

Debit side:

- Expenditures from science and technology development fund;

- Decrease of science and technology development fund that forms fixed assets when calculating the depreciation of fixed assets; The remaining value of fixed assets in sale or liquidation; costs of liquidation or sale of fixed assets formed by science and technology development fund.

- Decrease of science and technology development fund forming fixed assets when fixed assets created by science and technology development fund are changed to serve the purpose of manufacturing and trading.

Credit side:

- Setting up science and technology development fund into enterprise administrative expense.

- Sum received from liquidation, turnovers of fixed assets formed by science and technology development fund.

Credit balance: The remaining scientific and technology development funds of enterprises.

Account 356 - Science and technology development fund comprises 2 sub-accounts:

- Account 3561 - Science and technology development fund: Records the current amounts and setting up, use of science and technology development funds;

- Account 3562 - Science and technology development fund that forms fixed assets: Records the current amount, increase, decrease of science and technology development funds that form fixed assets (science and technology development fund that forms fixed assets).

3.The method of accounting for several major transactions

a) During the year, when setting up scientific and technological development fund, record:

Dr 642 - Enterprise administrative expense

Cr 356 - Science and technology development fund

b) When using science and technology development fund for purpose of research, development of scientific and technological of enterprises, record:

Dr 356 - Science and technology development fund

Dr 133 - Deductible VAT (if any)

Cr 111, 112, 331 ...

c) When using science and technology development fund for testing production of products:

- Accountants summarize testing production cost, record:

Dr 154 - Work in progress

Dr 133 - Deductible VAT

Cr 111, 112, 152, 331...

- When selling testing products, record:

Dr 111, 112, 131

Cr 154 - Work in progress

Cr 333 - Taxes and amounts payable to the State (if any)

- The difference between testing production cost and sum received from the sale of testing products adjusted to increase, decrease the Fund, record:

In case sum received from the sale of testing products is higher than test trial production cost, accountants record an increase in science and technology development fund, record:

Dr 154 - Work in progress

Cr 356 - Science and technology development fund

In case sum received from the sale of testing products is lower than test trial production cost, accountants record on the reverse.

d) When investing, purchasing fixed assets by scientific and technological development fund used for purposes of research, development of science and technology:

- When investing, purchasing fixed assets, record:

Dr 211, 213 (Costs)

Dr 133 - Deductible VAT (if any)

Cr 111, 112, 331 ...

Also record:

Dr 3561 - Science and technology development fund

Cr 3562 – Science and technology development fund that forms fixed assets.

- At the end of accounting term, calculating the depreciation of fixed assets invested, purchased by scientific and technological development fund used for purposes of research, development of science and technology, record:

Cr 3562 – Science and technology development fund that forms fixed assets

Cr 214 - Depreciation of fixed assets.

- When liquidating, selling fixed assets invested, purchased by scientific and technological development fund:

Recording a decrease of fixed assets sold or liquidated:

Dr 3562 – Science and technology development fund that forms fixed assets (remaining value)

Cr 214 - Depreciation of fixed assets (depreciation value)

Cr 211, 213.

Recording sum received from liquidation or sale of fixed assets:

Dr 111, 112, 131

Cr 3561 - Science and technology development fund

Cr 3331 - VAT payable (33311).

Recording expenses incurred directly related to the liquidation or sale of fixed assets:

Dr 3561 - Science and technology development fund

Dr 133 - Deductible VAT (if any)

Cr 111, 112, 331

- At the end of the research, development of science and technology, fixed assets created from scientific and technological development fund are transferred to serve the purpose of manufacturing and trading, accountant‘s record:

Dr 3562 – Science and technology development fund that forms fixed assets (non-deductible remaining value)

Cr 711 - Other income

From time fixed assets are switched to serve the purpose of manufacturing, turnovers, depreciation of fixed assets are included in cost of production, trading under current accounting policy.

Source: Circular 200