Regarding provision for devaluation of inventory that is likely to be obsolete, or has/will be destroyed after the audit period

One of the two basic principles for establishing inventory provisions in general is the principle of ownership of goods. Indeed, the goods being recorded by the enterprise as goods in the enterprise's books may not actually be the goods owned by the enterprise. For example, consignment goods, goods temporarily held for customers... but according to economic contracts, the business temporarily holds the goods and releases them when requested by the customer, the customer is fully responsible for all risks. for those shipments.

To learn more clearly, it is necessary to determine what ownership rights are, from which to consider whether or not to make provisions.

According to the provisions of the civil code, property ownership rights generally include: Right to possess, right to use and right to dispose. In which the right to possess is the right to hold property, the right to use is the right to use property as desired and the right to dispose is the right to destroy, lend, lease, sell, mortgage or mortgage. …, according to the above principle, property ownership appears when the enterprise holds the property with all three rights as stated. If one of the three rights is missing, that property is not called the enterprise's ownership right. .


Goods are imported on entrustment to another enterprise. In principle, when the goods have arrived in Vietnam and are delivered to the warehouse as agreed, at that time, the goods are not under the ownership of the entrusted enterprise. In reality, because customers do not have a warehouse to store goods, they accept to rent/borrow a warehouse from the entrusted import enterprise to store goods and then distribute them to other places, with the agreement that when there is a need, If required, the entrusted import enterprise (the enterprise that stores the goods) must export the goods with an invoice to the import entrusting party for them to sell to customers. They are fully responsible for the remaining goods in the warehouse. all risks if any occur. Thus, basing on account 156 (goods) in the accounting books to make an inventory provision is inaccurate, because there is a huge value in the customer's goods. The entrusted import enterprise has only one right, which is the right to possess, which means the right to hold the goods since they have arrived in Vietnam and are being stored in that enterprise's own warehouse, as well as the right to use and the right to dispose of the goods. Robbery is completely non-existent, because you are not allowed to use the goods as you wish and have no right to buy, sell, or mortgage them.

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Through the above analysis, it is confirmed that the entrusted goods (no matter what form) (if) are in the enterprise warehouse and other conditional goods are not owned goods. of the enterprise, and therefore it is not possible to make provisions for these items, including destroyed goods discovered after the year. In principle, destroyed goods will be compensated by the customer at the original price, so the net value is confirmed (not estimated) to be equal to the original price, so there is not enough basis to make provisions.

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