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Legal updates

We regularly update legal documents on accounting, tax, labor and other related fields for our clients.

Official Letter No. 885 / BTC-QLKT dated Jan 22th 2020 of the Ministry of Finance about Accounting guidance regarding to goodwill.

This Official Letter guidelines on the accounting for goodwill in case the Company acquires a business segment of another enterprise.

Accordingly, depending on acquiring the business segment is constituting a business activity or transaction not, the accounting will be different. As follows:

  • If the acquisition of the business segment constitutes a business activity and this consolidation does not result in a parent company – subsidiary company relationship, goodwill (if any) incurred from this transaction will be reflected as an asset in the buyer’s individual financial statements to allocate gradually within 10 years.
  • Conversely, if the acquisition does not constitute a business activity, the Company shall not record goodwill. The Company shall allocate it to the individual identifiable assets and liabilities based on their respective fair values ​​at the date of acquisition.

Please kindly find detail in the attached file.

20200122_CV885_Hach toan ke toan doi voi loi the thuong mai

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