- Carry forward the difference in the unused provision for doubtful debts that has been established at the end of the accounting year to be greater than the amount required to set up the provision for the following year.
Credit Balance: - Reflects the remaining provision for doubtful receivables at the end of the period.
Detailed accounting: Open 1 account
e . Loan interest income account (701): Includes loan interest income for
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loan customers
Account structure:
Credit side: - Revenue from business activities during the year
Debit: - Amount of refunded revenue during the year
- Transfer the year-end credit balance to this year's profit account when settling
Credit Balance: - Reflects revenue from business activities during the period.
year
2.2. Off-balance sheet accounts.
Currently, because Vietnamese banks have many legal restrictions on lending forms and they contain many risks that cause capital loss for banks, commercial banks often provide loans with secured accounts.
In on-balance sheet accounting, accountants also open off-balance sheet accounts to track assets used to secure customer loans. Off-balance sheet accounts are accounted for based on asset import and export vouchers.
a . Off-balance sheet account: Mortgaged assets
Account structure:
Import side: Reflects the total value of assets or documents of assets imported into the warehouse.
preserve.
Exporter: Reflects the value of assets or documents returned from the warehouse.
customer when debt is collected
Remaining: Reflects the value of assets or bank asset documents still outstanding.
customer retention
b . Off-balance sheet account: Uncollected interest
For uncollected interest (suspended interest), accountants do not enter interest into principal but record it in the off-balance sheet account "suspended interest" for further collection.
Input side: Reflects the amount of interest due for collection.
Export side: Reflects the amount of interest collected.
Remaining: Reflects the amount of interest not yet collected.
c. Off-balance sheet accounts: Bad debts written off
This account is used to record lost debts that have been compensated by risk reserves and are being monitored for further collection. The monitoring period for this account must be determined by the Ministry of Finance. If the specified period expires and the account is not collected, it will be canceled.
Structure:
Importer: - Bad debt amount has been offset but is being tracked off the balance sheet
Exporter: - Amount recovered from customer
- The amount of lost debt has expired the tracking period
Remaining amount: - Reflects the amount of lost debt that has been compensated but must continue to be paid.
continue to monitor for recovery
Detailed accounting: Open sub-accounts for each debtor and each item.
in debt
The details of the accounts can be denoted by code number.
suitable for level III, level IV and level V accounts of banks.
3. Loan accounting process for each time .
3.1. Accounting for the loan period .
Each time borrowing money, the borrower submits a loan application to the bank to state the reason for the loan. This is the basis for the bank to consider, calculate, and decide to lend. If the loan is approved by the director, the credit department transfers the file to the accounting department to perform accounting and payment operations. The accounting department reviews and guides the borrower to prepare accounting documents to receive the loan. In case the customer uses a loan application form that is also a debt acknowledgment, there is no need to prepare a loan contract. When preparing a loan contract or a loan application form that is also a debt acknowledgment, it is necessary to prepare a sufficient number of copies as prescribed and fill in all the elements on the pre-printed form to ensure the legality of the loan documents.
In case the loan is disbursed in multiple installments, it is not necessary to establish a separate loan contract for each disbursement, but it is possible to establish a contract for the entire loan, the loan disbursement process will be monitored on the back of the contract. After completing the loan paperwork in accordance with regulations, the accountant will base on the documents to account.
Debit: Customer loan account.
Yes: Cash account (if lending in cash)
Or the beneficiary's deposit account (if lending by transfer)
(section)
Or payment accounts between banks (if the beneficiary has an account at another bank)
For loans with collateral value, the accountant will record
into the off-balance sheet account “collateral”
3.2. Accounting for debt collection and interest collection stages :
One of the characteristics of the one-time lending method is that each loan must determine the repayment period. When the repayment period is due, the borrower must be responsible for repaying the bank. If the borrower does not pay the bank in full by the repayment period, the accountant will proactively deduct the borrower's deposit account to recover the debt.
If the borrower's deposit account has run out of balance and the bank does not extend the loan, the accountant will proceed with the overdue debt transfer procedure.
Accounting entries reflect debt collection: Collect both principal and interest at the same time Debit: Cash account
or borrower's deposit account (principal and interest) Credit: Borrower's loan account (principal)
Credit: Bank income account (interest)
Principal and interest of loan are not collected at the same time.
In this case, the loan accountant will collect interest monthly based on the outstanding balance of the loan account (according to the cumulative method). Therefore, debt collection and interest collection will be recorded at different times.
Accounting for interest period
Debit: Cash account, payment check (if interest is paid in cash)
face)
Or the borrower's deposit account (if interest is paid by transfer)
Credit: Bank income account (interest)
Accounting for the principal collection phase
Debit: Cash account at the fund (if collected in cash)
Or the borrower's deposit account (if collected by bank transfer)
Yes : Borrower's loan account.
Accounting for overdue debt transfer
There are two ways to schedule loan repayments, which leads to two ways to track loan payments.
by dish
If the debt repayment period is set on a certain day of the month, then on the last day of the debt term, the accountant will carry out debt collection procedures. After that day, if the borrower is unable to repay the debt, it will be transferred to the overdue debt account. If the debt repayment period is set monthly, the debt to be collected will be carried out throughout the debt term month. At the end of the month, if the borrower does not complete the debt repayment to the bank and is not granted an extension, the accountant will carry out procedures to transfer that debt to the overdue debt account.
When transferring overdue debt, accountants record:
Debit: Overdue debt account (opened for each borrower) Credit: Borrower's loan account.
Handling interest when transferring overdue debt:
In case the customer has not paid all the interest by the due date, the bank, after calculating the interest, will record it as "uncollected interest account" and will monitor when the customer's deposit account has money to collect.
When collecting off-balance sheet accounting: export the "uncollected interest" account at the same time.
Balance sheet accounting:
Debit: Borrower's deposit account (interest portion) Credit: Bank's income account (interest portion)
When collecting debt, the lender must erase the debt on the loan contract. Contracts that have been fully collected will be filed in a separate file. Contracts that have only been partially collected will be kept in the borrower's loan file for further debt collection. Contracts that transfer overdue debt will be kept in the overdue file.
4. Accounting process for loans based on credit level:
4.1. Accounting for loan period :
The basis for accounting to disburse loans under this lending method is the credit limit agreed between the bank and the borrowing unit stated in the credit contract during the period within the credit limit, the effective period of the credit contract, each time the loan is withdrawn, the customer only needs to prepare a loan debt receipt with the loan application documents in accordance with the purpose of capital use in the credit contract. Thus, the responsibility of the accountant is to closely monitor the outstanding balance of the loan account so that the outstanding balance of the loan account does not exceed the credit limit signed during the period.
After checking the validity and legality of the documents and comparing them with the credit limit, the bank accountant will base on the documents to account for:
Account Debit: Loan according to credit line or working capital credit account
moving
Account: Cash at fund (if lending in cash)
Or beneficiary's account (if payment is made at the same bank) Interbank payment account (if payment is made at a different bank)
bank)
4.2. Accounting for debt collection and interest collection stages
In the credit line method, the customer's debt repayment is based on the credit cycle or the customer repays the debt monthly as agreed in the credit contract. There are two ways to collect debt:
Method 1Direct debt collection: means that the entire amount of sales from the borrower is deposited into the credit side of the loan account. Once the debt is fully collected (the loan account balance is exhausted), no further collection will be made.
Method 2Indirect revenue: revenue through customer payment deposits. When customers have business production income or sales revenue deposited into the bank, the loan accountant will record it on the credit side of the customer's deposit account.
The accountant will then deduct from the customer's payment deposit account to collect the debt. The accountant will deduct a percentage of the amount that the customer deposits into the payment deposit account in two cases: Deducting according to the percentage of revenue from production and business or deducting according to the percentage of the balance in the payment deposit account.
When the debt is due, the loan accountant records the customer's debt collection according to the amount the customer borrowed and deposited into the bank.
When customers deposit sales proceeds into a deposit account
Debit : Cash account
Yes: Payment deposit account.
When collecting debt accounting
Debit: Borrower's deposit account
Yes: Customer loan account
Interest is collected monthly by the method of accumulating the amount withdrawn from the deposit account for payment or by the customer depositing cash. If the bank collects interest on the day the customer does not pay the interest, the lending accountant records the interest in the off-balance sheet account "uncollected interest".
At the end of the month, if the borrowing unit does not complete the bank debt repayment plan and is not considered for collection in the following month, the accountant will create a transfer slip to transfer the amount the unit still owes the bank to the overdue debt account.
Accounting for Overdue Debt at which point in time, calculate interest at that point in time.
Chapter 2
Current status of accounting for non-state loans at Hanoi Bank for Agriculture and Rural Development
I. Overview of business performance of Hanoi Bank for Agriculture and Rural Development
1. Some general features of the Bank for Agriculture and Rural Development
Hanoi.
Integrating with the process of economic innovation of the country after the 6th Congress of the Party (1986), banking activities have had positive changes contributing to capital mobilization to serve the task of developing the country's economy. The clear transformation of the banking system was in 1990, the time of promulgation of two banking ordinances, "Ordinance on the State Bank" and "Ordinance on banks, credit cooperatives and financial companies" which legalized banking activities in order to continue to fundamentally and comprehensively innovate banking work. Since then, the organizational system of the bank has changed from a one-level bank to a two-level bank with a clear distinction of the State management function for business activities, credit, currency, supply and regulation of currency circulation, and stabilization of currency value.
Along with the transformation of the country's economy, the Vietnamese banking system in general and the agricultural banking system in particular have also undergone many obvious changes. After Decree 53/HDBT issued on March 26, 1988 took effect, the Hanoi Bank for Agriculture and Rural Development was established. This is a state-owned commercial bank, a member bank and independent accounting of the Vietnam Bank for Agriculture and Rural Development.