On March 21, 2016, the Ministry of Finance issued Circular No. 53/2016/TT-BTC for amending and supplementing some articles of Circular No. 200/2014/TT-BTC. The content on determining the exchange rate that was amended and supplemented as follows:
- The enterprise can choose the actual exchange rate which approximates to the average transfer exchange rate quoted by commercial bank where the enterprise most frequently conducts transaction. The approximate exchange rate must not exceed the average transfer exchange rate by +/-1%. The average transfer exchange rate is determined on a daily or weekly or monthly basis based on the average of the daily foreign currency buying rates and selling rates quoted by commercial banks for account transfers transactions. The application of the approximate exchange rate must not cause material effects on the financial position and results of operations for the accounting period.
- The enterprise is allowed to apply the account transfer exchange rate quoted by the commercial bank where the enterprise most frequently conducts transactions for translating the balances of monetary items denominated in foreign currency at the reporting date. This account transfer exchange rate may be the buying rate, the selling rate or the average of the account transfer buying and selling rate quoted by the commercial bank.
- In case of enterprises use the actual exchange rates for the accounting credit entries of the cash account, credit entries to accounts receivable, debit entries to the accounts payable denominated in foreign currency, the recognition of difference exchange rate is done at the time of the transaction or periodically depending on the characteristics of business operations and management requirements of businesses.
