- The parent company and the group preparing consolidated financial statements must comply with the provisions of the accounting standard "Consolidated financial statements and accounting for investments in subsidiaries".
- Subordinate accounting units or State-owned corporations operating under a model without subsidiaries must prepare consolidated financial statements according to the provisions of the Circular guiding accounting to implement Accounting Standard No. 25 "Consolidated financial statements and accounting for investments in subsidiaries"
6.2.4. Organization of financial reporting
6.2.4.1. Requirements for preparing and presenting financial statements
The preparation and presentation of financial statements must comply with the requirements specified in Accounting Standard No. 21 - Presentation of financial statements, including:
- Honest and reasonable;
- Select and apply accounting policies in accordance with the provisions of each accounting standard to ensure the provision of information appropriate to the economic decision-making needs of users and to provide reliable information, when:
+ Honestly and reasonably present the financial situation, business situation and results of the enterprise;
+ Reflect the economic substance of transactions and events, not simply their legal form;
+ Objective and unbiased presentation;
+ Comply with the principle of caution;
+ Fully presented on all important aspects.
The preparation of financial statements must be based on data after the accounting books are closed. Financial statements must be prepared with correct content, methods and presented consistently between accounting periods. Financial statements must be signed and sealed by the preparer, chief accountant and legal representative of the accounting unit.
6.2.4.2. Principles of preparing and presenting financial statements
- The preparation and presentation of Financial Statements must comply with the provisions of the Accounting Standard “Presentation of Financial Statements” and other relevant accounting standards. Important information must be explained to help readers correctly understand the financial situation of the enterprise.
- Financial statements must reflect the economic substance of transactions and events rather than the legal form of those transactions and events (respecting substance over form).
- Assets are not recorded at a value higher than recoverable amount; Liabilities are not recorded at a value lower than payment obligations.
- Classification of assets and liabilities: Assets and liabilities on the Balance Sheet must be presented as short-term and long-term; In each short-term and long-term section, the indicators are arranged in descending order of liquidity.
+ Assets or liabilities with a remaining maturity of no more than 12 months or a normal production or business cycle from the reporting date are classified as short-term;
+ Assets and liabilities not classified as short-term are classified as long-term;
+ When preparing Financial Statements, accountants must reclassify assets and liabilities classified as long-term in the previous period but with a remaining maturity of no more than 12 months or a normal production or business cycle from the time of reporting as short-term.
- Assets and liabilities must be presented separately. Offsetting is only performed when assets and liabilities relate to the same entity, have a quick turnover, short maturity, and arise from transactions and events of the same type.
- Revenue, income and expense items must be presented in accordance with the principle of conformity and ensure the principle of prudence. The business performance report and cash flow report reflect the revenue, income, expense and cash flow items of the reporting period. Revenue, income and expense items of previous periods with errors affecting the business results and cash flow must be adjusted retroactively, not adjusted in the reporting period.
- When preparing the consolidated financial statements between the enterprise and subordinate units without legal status that are dependent on accounting, the balance of internal items of the Balance Sheet, revenues, expenses, profits and losses considered unrealized arising from internal transactions must all be eliminated.
6.2.4.3. Financial reporting period
- Annual financial reporting period: Enterprises must prepare financial statements according to the annual accounting period of the calendar year or the annual accounting period of 12 full months after notification to the tax authority. In special cases, enterprises are allowed to change the end date of the annual accounting period, resulting in the preparation of financial statements for the first or last annual accounting period that can be shorter or longer than 12 months but must not exceed 15 months.
- Interim financial reporting period: Interim financial reporting period is each quarter of the fiscal year (including the fourth quarter) and semi-annual financial reports.
- Other financial reporting periods:
+ Enterprises can prepare financial reports according to other accounting periods (such as week, month, 6 months, 9 months...) as required by law, by the parent company or by the owner.
+ Accounting units that are divided, separated, consolidated, merged, transformed in ownership form, dissolved, terminated in operation, or bankrupt must prepare financial statements at the time of division, separation, consolidation, merger, transformation in ownership form, dissolution, termination in operation, or bankruptcy.
- Determine the fiscal year of the financial statements of the financial and statistical agencies.
When synthesizing statistics, in case of receiving Financial Reports of enterprises with fiscal years other than the calendar year, the State management agency shall follow the following principles:
+ In case the annual financial report of an enterprise starts from April 1 and ends on March 31 every year, the data on the financial report will be statistically aggregated into the data of the previous year;
+ In case the annual financial report of an enterprise starts from July 1 and ends on June 30 every year, the financial report used for statistical synthesis is the semi-annual financial report;
+ In case the annual financial report of an enterprise starts from October 1 and ends on September 30 every year, the data on the financial report will be statistically summarized into the data of the following year.
6.3. Organizing the management reporting system
6.3.1. General overview of management reports
Management accounting is the collection, processing, analysis and provision of economic and financial information according to management requirements and economic and financial decisions within the accounting unit.
Management accounting aims to provide information on the internal operations of the enterprise, such as: Costs of each department (cost center), each job, product; Analysis and evaluation of the implementation status with the plan on revenue, costs, profits; management of assets, materials, capital, debts; Analysis of the relationship between costs, volume and profits; Selection of appropriate information for short-term and long-term investment decisions; Preparation of production and business budget estimates;... to serve the management, inspection and economic decision-making. Management accounting is the work of each enterprise, the State only guides the principles, organization methods and the main contents and methods of management accounting to create favorable conditions for enterprises to implement.
Tasks and requirements of management accounting work:
- Provide timely and complete information as required by management on costs of each job, department, project, product, etc.;
- Provide timely and complete implementation information, norms, unit prices, etc. to serve planning, inspection, operation and decision making;
- Ensure to provide more detailed and specific information than financial accounting;
- Establish appropriate principles and methods to ensure comparability between financial accounting and management accounting as well as between operating periods, between estimates and implementation.
6.3.2. Principles of organizing information systems on management reports
The organization of the management accounting information system does not have to comply with all accounting principles and can be implemented according to the internal regulations of the enterprise to create a suitable management information system according to the specific management requirements of each enterprise. The enterprise has full authority to decide on the application of accounting documents, organize the accounting system, apply and detail accounting accounts, design necessary management accounting report templates to serve the management accounting of the unit. The enterprise is allowed to use all information and data of the financial accounting section to coordinate and serve management accounting.
- The management accounting reporting system needs to be built in accordance with the information provision requirements for internal management of each specific enterprise.
- The content of the management accounting reporting system must ensure the provision of complete and comparable information to serve the management, operation and economic decision-making requirements of the enterprise.
- The indicators in management accounting reports must be designed in accordance with the indicators of plans, estimates and financial reports but can be changed according to the management requirements of all levels.
6.3.3. Management accounting reporting system
The main management accounting reporting system of a business usually includes:
6.3.3.1. Report on implementation status
- Report on revenue, costs and profits of each type of product, goods and service;
- Report on the volume of goods purchased and sold during the period by customer type, selling price, discount and other forms of promotion;
- Detailed report on completed and consumed product (service) volume;
- Inventory compliance report;
- Report on labor utilization and labor productivity;
- Detailed report of products and completed work;
- Report on balance of import, export, inventory of raw materials, materials, products, goods;
- Detailed report on receivables by debt term, debtor and debt collection ability;
- Detailed report on loans, payables by debt term and creditors;
- Department reports to responsibility center;
- Detailed report on increase and decrease of equity.
6.3.3.2. Analysis report:
- Analyze the relationship between cost, volume and profit;
- Analyze the financial situation of the enterprise;
- Analyze factors affecting the implementation of production and financial plans.
In addition, based on the management and operation requirements of each specific stage, enterprises can prepare other management accounting reports.
MULTIPLE CHOICE QUESTIONS
REVIEW QUESTIONS
Question 1. Purpose of financial statements:
a. Provide information on financial situation
b. Provide information on the business situation and cash flows of the enterprise
c. Meet the management requirements of enterprises, the state and the useful needs of users
d. All three of the above
Question 2. Which of the following information is presented on a business's financial statements:
a. Assets, liabilities, equity, revenue and profit, loss
b. Personnel situation
c. Sales contract
d. Human resource training
Question 3. The annual financial reporting system is applied to:
a. Some types of businesses
b. Some industries
c. State economic sector
d. All types of enterprises in all industries and economic sectors
Question 4. Financial reporting must be based on data:
a. After closing the accounting books
b. When the accounting books have not been closed
c. Take whenever needed
d. Taken from accounting documents
Question 5. Financial statements must be:
a. Tax authority signature and seal
b. The preparer, chief accountant and legal representative of the accounting unit sign and affix the unit's seal.
c. Auditor signed
d. Treasury signed
Question 6. The preparation and presentation of financial statements must comply with the following principles:
a. Going concern, accrual basis, consistent
b. Material, aggregate, offsetting and comparable
c. Timely
d. Both (a) and (b)
Question 7. The important information presented in the financial statements must be:
a. Simplify to help readers understand
b. Analysis to help readers understand the true financial situation of the business
c. Explanation to help readers understand the true financial situation of the business
d. Concealing so that readers do not understand the true financial situation of the business
Question 8. Enterprises that must prepare financial statements according to the annual accounting period are:
a. Lunar year
b. Lunar year or annual accounting period is 12 full months after reporting to the tax authority.
c. The calendar year or annual accounting period is 12 full months after the reporting date to the tax authorities.
d. The calendar year or annual accounting period is 12 full months.
Question 9. The disclosure of financial statements is carried out in the following forms:
a. Written notice, posting, other forms as prescribed by law.
b. Publishing publications, written notices, postings.
c. Issuing publications, written notices, postings, and other forms as prescribed by law.
d. Any form
TRUE OR FALSE QUESTIONS
Question 1. The place to receive the enterprise's financial reports is the trade union organization . Question 2. Business activities are regular activities of the enterprise. Question 3. Financial activities are financing activities.
Question 4. Cash equivalents are financial investments with a recovery period of more than three months.
Question 5. The period for preparing interim financial statements is each quarter of the fiscal year (excluding the fourth quarter).
Question 6. Financial statements are prepared in accordance with accounting standards and accounting regimes.
Question 7. The data to be recorded in the "Cash" indicator on the balance sheet is only the debit balance of account 111.
Question 8. There are 2 methods to prepare a cash flow statement.
Question 9. A business unit may not need to prepare financial statements if its business operations always comply with the law.
Question 10. Audited financial statements when submitted to competent state agencies do not need to be attached with an audit report.
ESSAY QUESTIONS
Question 1. How many methods are there for preparing a cash flow statement? What are they?
Question 2. If there are no figures on the balance sheet, can the business unit delete and re-evaluate the indicator number and code?
Question 3. Is the transfer of revenue and expenses to determine business results reflected in the general journal? Why?
Question 4. Are costs and profits indicators reflecting the financial situation of a business? Why?
Question 5. What types of revenue arise in the normal course of business operations of a business?
Question 6. Other income includes income arising from which activities? Question 7. What are the production and business expenses arising in the normal business operations of an enterprise?
EXERCISE
Lesson 1
Information about T&T Electronics Joint Stock Company (Address: 123 Nguyen Van Hoan - Hong Bang - Hai Phong)
Applicable accounting policies:
1. Principle of inventory recording: Record at original cost.
2. Inventory accounting method: Perpetual declaration
3. Principles and methods of revenue recognition:
- Sales revenue: Comply with 5 conditions for revenue recognition specified in Accounting Standard No. 14
- Service revenue: Comply with the 4 conditions for revenue recognition specified in Accounting Standard No. 14
There are data for the year 200N as follows:
Unit: Dong
Target
End of the year | Beginning of the year | |
Revenue and reductions in revenue period | ||
1. Total sales revenue | 276,000,000 | 345,000,000 |
2. Total service revenue | 38,000,000 | 39,000,000 |
3. Returned goods | 3,345,000 | 5,768,000 |
4. Discount on goods sold to customers | 2,678,000 | 3,890,000 |
5. Trade discounts for customers | 1,098,000 | 2,345,000 |
Costs incurred during the period | ||
6. Payment discounts for regular customers | 6,678,000 | 7,000,000 |
7. Cost of goods sold | 156,000,000 | 176,000,000 |
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8,000,000 | 9,100,000 | |
9. Selling expenses incurred during the period | 6,789,000 | 7,345,000 |
10. Business management costs incurred during the period | 14,000,000 | 16,000,000 |
11. Interest expense | 13,000,000 | 14,000,000 |
12. Securities transfer costs | 4,000,000 | 6,000,000 |
13. Asset transfer costs | 3,000,000 | 4,000,000 |
14. Bond brokerage fees | 2,000,000 | 3,000,000 |
15. Penalties for breach of contract | 2,000,000 | 2,600,000 |
16. Difference in decrease due to revaluation of contributed assets capital | 4,000,000 | 2,700,000 |
Financial revenue and other income | ||
17. Receive interest on term bank deposits | 6,678,000 | 7,000,000 |
18. Dividends distributed | 16,000,000 | 17,000,000 |
19. Income from sale of bonds | 8,000,000 | 9,000,000 |
20. Income from sale of assets | 6,789,000 | 7,345,000 |
21. Customer fines | 14,000,000 | 16,000,000 |
22. Income from liquidation of assets | 5,000,000 | 6,000,000 |
23. Increase in difference due to revaluation of contributed assets capital | 3,000,000 | 4,000,000 |
24. Bad debt collection has been written off | 6,000,000 | 6,700,000 |
25. Tax penalties, tax arrears | 2,980,000 | 2,900,000 |
8. Cost of service provision
Request:Prepare a business performance report knowing that the corporate income tax rate is 22%.
Lesson 2
Information about T&T Electronics Joint Stock Company (Address: 123 Nguyen Van Hoan - Hong Bang - Hai Phong)
Applicable accounting policies:
1. Principle of inventory recording: Record at original cost.
2. Inventory accounting method: Perpetual declaration
3. Principles and methods of revenue recognition: Comply with the conditions for revenue recognition specified in Accounting Standard No. 14
There are data for the year 200N as follows:
Account Name
End of the year | Beginning of the year | |
1. Cash | 23,134 | 27,890 |
2. Non-term bank deposits | 123,000 | 234,000 |
3. Money in transit | 4,567 | 5,980 |
107,000 | 78,000 | |
5. Cash equivalents | 43,000 | 56,000 |
6. 12-month investment bond value | 234,000 | 198,000 |
7. Term bank deposits | 256,000 | 345,000 |
8. Provision for short-term investment depreciation | 7,980 | 6,987 |
9. Accounts receivable from customers with a term of less than 12 months | 34,000 | 65,000 |
10. Prepayment to the seller | 48,900 | 56,900 |
11. Internal receivables under 12 months | 56,789 | 43,123 |
12. Other receivables | 4,567 | 5,321 |
13. Provision for short-term doubtful receivables | 6,876 | 3,098 |
14. Goods in transit | 12,567 | 15,678 |
15. Raw materials | 123,678 | 213,000 |
16. Tools and equipment | 6,789 | 7.123 |
17. Goods | 134,000 | 234,000 |
18. Goods for sale | 57,000 | 67,000 |
19. Provision for inventory price reduction | 5,648 | 3,000 |
20. Prepaid expenses under 12 months | 12,000 | 16,000 |
21. Input VAT | 34,000 | 27,000 |
22. Pledge, deposit under 12 months | 45,000 | 56,000 |
23. Advance | 13,000 | 23,000 |
24. Assets missing pending resolution | 4,567 | 5,321 |
25. Accounts receivable from customers with a term of 24 months | 56,000 | 76,000 |
26. Other receivables with 24-month term | 78,000 | 98,000 |
27. Original cost of tangible fixed assets | 678,000 | 789,000 |
28. Accumulated depreciation of tangible fixed assets | 123,000 | 134,000 |
29. Original cost of intangible fixed assets | 345,000 | 367,000 |
30. Accumulated depreciation of intangible fixed assets | 45,000 | 46,000 |
31. Cost of unfinished basic construction | 324,000 | 234,000 |
32. Investment in associates and joint ventures | 657,000 | 789,000 |
33. 36-month bond investment | 234,000 | 345,000 |
34. Prepayment fee for 36 months | 66,000 | 77,000 |
35. Pledge, deposit term 36 months | 78,000 | 99,000 |
36. Bank loan term 12 months | 345,000 | 456,000 |
37. Long-term debt due | 67,000 | 87,000 |
38. Payable to seller within 12 months | 123,098 | 234,567 |
39. Buyer pays in advance | 34,000 | 45,000 |