On May 04, 2018, the Ministry of Finance issued Circular No.41/2018/TT-BTC guiding some contents on financial handling and valuation of enterprises when transferring state-owned enterprises and single-member limited liability company whose 100% charter capital is invested by a State into a joint stock company. This Circular took effect since June 18, 2018.

Accordingly, Circular No.41/2018/TT-BTC regulates the inventory and classification of assets before equitization state-owned enterprises as follows:

1. At the time of valuation of the enterprise, the enterprise must draw up a list of the actual quantity and actual conditions, quality and value of the assets currently managed and used; check cash balance, reconcile bank deposit balance; determine assets, cash surplus or deficit as compared to accounting books, analyze the cause of excess and the liability of the concerned persons and determine the level of compensation as prescribed by law.
2. Assets already inventories are classified into the following groups:

–           Assets used in production and business activities.

–           Assets do not need to use, assets are stagnant, slow rotation, property awaiting liquidation.

–           Assets formed from reward and welfare funds (if any).

–           Assets leased or borrowed, supplies and goods kept for preservation, processing, agency, consigned, joint venture assets and other assets don’t belong to the enterprises.

–           Assets attached to land which must be handled according to the plan on re-arrangement of house and land establishments under decisions approving by competent agencies in accordance with the law on rearrangement of state-owned houses and land.

–           Assets of non-business units with revenues (land and housing establishments of non-business units with revenues under the law on reorganization and treatment of state-owned land and houses), non-business operating assets .

–           Assets awaiting settlement decisions of competent agencies.

–           Financial investments (contributing capital to joint ventures, contributing capital to establishing limited liability companies and other capital contribution activities) equal to the value of land use rights.

–           Other assets (if any).

With detailed and specific regulations, Circular No.41/2018/TT-BTC is expected to provide a solid legal basis for the process of valuation of state-owned enterprises before equitization, thereby ensuring the transparency of this activity, avoid causing loss of state property.