Does the revenue and income of cooperatives collected in foreign currency need to be converted?

The revenue and income of cooperatives are specified in Clause 3, Article 18 of Circular 83/2015/TT-BTC as follows:

Principles of managing revenue, other income and expenses

1. The Board of Directors, directors (general directors) of cooperatives and unions of cooperatives are responsible before the members, member cooperatives and before the law, organize strict management, ensure the correctness and legality of revenues, other income and costs of production and business activities.

2. All revenue, other income and costs of production and business activities of cooperatives and unions of cooperatives arising must have full legal invoices and documents according to the provisions of law and be fully, promptly, accurately and honestly reflected in accounting books and financial reports of cooperatives and unions of cooperatives according to the provisions of law on accounting.

3. Revenue and income are determined in Vietnamese Dong. In case of revenue in foreign currency, it must be converted into Vietnamese Dong according to the provisions of law.

4. Cooperatives and unions of cooperatives must correctly and fully calculate the costs of production and business activities, cover all expenses with the revenues of the cooperatives and unions of cooperatives, and be responsible for the results of their business activities.

5. Determination of revenue and expenses to determine income subject to corporate income tax is carried out in accordance with the provisions of law on corporate income tax.

Thus, according to regulations, the cooperative’s revenue and income are determined in Vietnamese Dong.

In case of receipt in foreign currency, it must be converted into Vietnamese Dong according to the provisions of law.

What sources does the cooperative’s revenue include?

According to the provisions of Clause 2, Article 19 of Circular 83/2015/TT-BTC, the cooperative’s revenue includes revenue from production and business activities and revenue from internal financial and credit activities, of which:

(1) Revenue from production and business activities is the entire value of products and services that the cooperative has sold and provided to members and customers and has been paid or accepted by members and customers, including:

– Revenue from production and business activities for members.

– Revenue from production and business activities for non-member customers.

Note: Cooperatives must organize separate accounting and tracking of the above two types of revenue.

(2) Revenue from internal financial and credit activities includes:

– Revenues arising from royalties for other parties to use the cooperative’s assets;

– Interest from capital lending, deposit interest, deferred payment interest, installment payment interest, financial leasing interest;

– Exchange rate profits, including profits from selling foreign currencies;

– Proceeds from capital transfer of cooperatives investing in enterprises;

– Profits and dividends distributed from capital contributions and purchases of established shares;

– Loan interest from internal credit activities.

Note: In case corporate income tax has been paid on the divided profits, the cooperative does not have to pay income tax on this divided profit.

How do cooperatives with revenue from goods and services account for revenue?

Revenue accounting in cases where cooperatives have revenue from goods and services is specified in Clause 4, Article 19 of Circular 83/2015/TT-BTC as follows:

Management of revenue and other income

…

3. Other income includes revenues from the liquidation and sale of fixed assets, insurance proceeds collected, and payable debts that now have no creditors recorded as an increase in income; collect fines from customers due to contract violations, intellectual property value, copyright accepted by the party receiving capital contribution, recorded as other income of cooperatives, cooperative unions and other revenues according to the provisions of law.

4. All revenues must be measured in money. In case of collection in the form of goods, services, or barter, it must be calculated into money at the time of payment or acceptance of payment to account for revenue.

5. All revenue generated during the period must have invoices and documents and must be fully and promptly reflected in the accounting books according to the provisions of law on accounting.

6. Cooperatives and unions of cooperatives must separately monitor and account for revenues that are exempted or reduced from corporate income tax.

According to the above regulations, all revenues of the cooperative must be calculated in money.

In case of receipt of goods or services, it must be calculated into money at the time of payment or acceptance of payment to account for revenue.