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Circular 05/2013/TT-BTC of the Ministry of Finance on the accounting for the real estate asset as loan collateral

Circular 05/2013/TT-BTC of the Ministry of Finance on the accounting for the real estate asset as loan collateral

From February 25th 2013, Credit Institutions (CIs) held properties resulted from settling the debt as stipulated in the Law of credit institutions are accounted for as follows:

– For real estate that CIs acquired in the process of settling the debt to directly serve their business activities, CIs will adjust its accounting books to increase assets, and set aside depreciation provided within the limit of construction investment, and fixed assets.

– For real estate as loan collateral that CIs temporary hold to sell, transfer to recover the loan, CIs will not adjust their accounting books to increase assets, or deduct depreciation.

The above contents are prescribed in Circular 05/2013/TT-BTC guiding the financial regime for credit institutions and branches of foreign banks, taking effect from February 25th 2013 and applicable from the financial year 2013.

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