Account 228 – Other investments  

1. Rules for accounting

a) This account is used to record current value and increases or decreases in other investments (other than investments in subsidiaries, investments in joint ventures or associates), such as:

- Investments in equity of other entities but not control or joint control, or significant influence on the investee;

- Precious metals or gemstones which are not used as raw materials for production or trading; value paintings, photographs or documents which are not put into normal operation. - Other investments. The investments or capital contribution related to BBC which does not require a legal entity shall not be recorded to this account.

b) Other investments shall be kept records in details according to invested quantity or entities.

c) Accounting for other investments shall comply with rules prescribed in Article 40 of this Circular.  

2. Structure and contents of account 228 – Other investments

Debit: Increases in other investments.

Credit: Decreases in other investments.

Debit balance: Value of other existing investments at the reporting time.

Account 228 – “Other investments” comprises 2 sub-accounts:

- Account 2281 – Investments in equity of other entities: records investments in equity instruments which the enterprise has no right to hold control or joint control or significant influence on the investee.

- Account 2288 – Other investments: records investments in non-financial assets other than investment properties and others related to investment activities recorded in other accounts. Other investments may include precious metals or gemstones (not used as inventories), value paintings, photographs or documents (other than items classified as fixed assets), etc, which are not put into normal operation but they are purchased to held for capital appreciation.  

3. Method of accounting for several major transactions

3.1. When the enterprise buys shares or contributes long-term capital but it has no right to hold control or joint control or significant influence on the investee:

a) In case of investment in cash Dr 228 – Other investments (2281) (the original cost of investment + directly-attributable expenses incurred from investment activities, such as brokerage expenses, etc) Cr 111, 112.

b) In case of investment by non-monetary assets:

- When contributing a non-monetary asset as capital, the following accounts shall be recorded according to re-evaluated value of materials, goods or fixed assets: Dr 228 – Other investments (2281) Dr 214 – Depreciation of fixed assets (depreciation value) Dr 811 – Other expenses (negative difference between re-evaluated value and the book value of materials or goods or residual value of fixed assets) Cr 152, 153, 156, 211, 213, etc. Cr 711 – Other income (positive difference between re-evaluated value and the book value of materials or goods or residual value of fixed assets)

- In case of sale of capital contribution by non-monetary assets:

+ When exchanging fixed assets: Dr 811 – Other expenses (residual value of the exchanged fixed assets) Dr 214 – Depreciation of fixed assets (depreciation value) Cr 211, 213 (cost). And, an increase in other income and long-term investments due to exchange of fixed assets shall be recorded as follows: Dr 22 – Other investments (2281) (total payment) Cr 711 – Other income (residual value of received investment) Cr 3331 – VAT payables (account 33311) (if any).

+ When dispatching goods for exchange, the following accounts shall be recorded: Dr 632 – Costs of goods sold Cr 155, 156, etc.

And, an increase in other investments and revenues shall be recorded as follows: Dr 22 – Other investments (2281) (total payment) Cr 511 – Revenues (fair value of received investment) Cr 333 – Taxes and other payables to the State (33311). 3.2. Accounting for dividends or profits which are divided in cash or non-monetary assets (excluding receipt of dividends in shares):

- When receiving notification of dividends or profits divided after the investment date, the following accounts shall be recorded: Dr 138 – Other receivables (1388) Cr 515 – Financial income.

- When receiving notification of dividends or profits divided before the investment date, the following accounts shall be recorded: Dr 138 – Other receivables (1388) Cr 228 – Other investments (2281)

- When receiving the dividends or profits which are used for re-evaluation of cost of investments in case of evaluation of the company for equitization, an increase in state capital shall be recorded as follows: Dr 138 – Other receivables (1388) Cr 228 – Other investments (2281)

3.3. When the investor no longer has control or joint control and significant influence over associates because it sells a part of investment to subsidiary, joint venture or associate, the following accounts shall be recorded: Dr 111, 112, 131, etc. Dr 228 – Other investments (2281) Dr 635 – Financial expenses (for losses) Cr 221, 222 Cr 515 – Financial income (for gains).

3.4. Disposal or sale of other investments:

- When earning profits from sale or disposal, the following accounts shall be recorded: Dr 111, 112,131, etc. Cr 228 – Other investments (book value) Cr 515 – Financial income (sale price is greater than book value).

- When incurring losses from sale or disposal, the following accounts shall be recorded: Dr 111, 112,131, etc. Dr 635 – Financial expenses (sale price is smaller than book value) Cr 228 – Other investments (book value).

3.5. When the investor contributes additional capital and becomes parent company which has joint control or significant influence, the following accounts shall be recorded: Dr 221, 222. Cr 111, 112 (additional investment) Cr 228 – Other investments  

Source: Circular 200