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Circular 16/tt-Lb: Guidance On The Determination Of The Appropriate Level Of Working Capital With The Improvement Of The Work Distribute Traffic

Original Language Title: Thông tư liên tịch 16/TT-LB: Hướng dẫn về việc xác định vốn lưu động định mức phù hợp với việc cải tiến công tác phân phối lưu thông

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MINISTRY of FINANCE CIRCULAR – STATE BANK of 16/TT-LB on 9-7-1981 GUIDE to DETERMINING the APPROPRIATE LEVEL of WORKING CAPITAL with the IMPROVED DISTRIBUTION WORK FLOW implementation Directive No. 109-CT/on 19-5-1981 of the Politburo about the improvement work distribute traffic , decision No. 25-CP and other decisions of the Council of Government on price adjustment, temporary wage subsidies, ... Minister of Finance-Bank instructed the redefine working capital limit of units of production-business, working capital shortage allocation and recovery of excess working capital in order to save and enhance the effective use of money capital.
 
I. REDEFINED WORKING CAPITAL LEVEL of The directive and the decision of the party and the State on price adjustments and a temporary wage subsidies have a direct impact on production activity-business of the enterprises, the enterprises and the organizations, would create the possibility of increasing the volume of goods products on the basis of an injury to the management , promoting production, expand your business, increase productivity, strengthen market management, holding in his hand on the source State, on the other hand, also directly influence the financial plan of the enterprise in General and working capital in particular. So, the determination back to the level of working capital is essential to ensure the enterprises normal operation.
The General principles of correct working capital điịnh norms, measures primarily aimed at accelerating working capital rotation, shortening the time of reserve supplies of goods, inventory reserves, reduce the level of rotation ... generally performed according to Decree No. 48-TTg dated 27 April 1962, decision No. 32-CP dated 11-2-1977 and guided in circular of Ministry of finance-number 14-State Bank TT/LB on 24-2-1977. But to fit the new situation, determining working capital limit again this time need to calculate the full, proper new elements here: 1. The impact of the factor of the price due to the policy of the book the new pricing adjustment (price for the purchase of raw materials, the prices of electricity, the price of consumer goods ...) that directly affects the price to enter the average stockpile. So, need to determine the average inventory entry price for new types of raw materials, fuel, materials needed for production-business, especially for the kind of bought in water, must distinguish each procurement volume for each kind of price (the price direction, two-way economic contract price the price agreement) and on that basis determine the average inventory entry prices according to the following formula: price enter (volume purchase prices steer x unit cost) + (volume 2-way contract procurement x unit cost) + (the volume purchase agreement price x unit price) average inventory = military purchasing volume by price direction + volume of procurement contract price + two-way economic volume the purchase price agreed upon based on the price of imported goods and materials inventory new and old on average to determine the price adjustment factor: enter the average inventory Price new (P1) the price adjustment factor (g) = average inventory entry prices under the old norms (PO) due to the change in prices enter the average inventory of raw materials fuel, supplies, affects the reasonable price for unfinished products, semi-finished products and finished goods inventory of enterprises and directly impacts the level of inventory.
The multiplier impact on the value of the product limit Venice dang, semi-finished and finished products is determined according to the formula: coefficient of the price plan according to the new elements (Z1) = impact (m) plan price is calculated according to the old factor (ZO) (with m condition < g) 2. On the basis of the implementation of measures to improve the work distribute traffic requires improved production organization, rationalize production lines, increase productivity, improve the management of the day-to-day ... rethink norms of the time reserve supplies of goods, unfinished products , semi-finished and finished products, production cycle and shipped the goods, the removal of the unreasonable time period in previous norms that determine the coefficient on the norm.
 


On the quota calculation under the new element (t1) on the basis of quota (t) = on the norm has calculated the old factor (tO) this factor must be calculated by positive results increased working capital rotation, shortening the time the reserves, production cycles, chu moved goods so, (t1 or t t0 < < 1). If there are special circumstances, the Governing Body agreed with the financial institutions and the State Bank to handle the two elements above are the principal factors that impact the determination of working capital limit again this time, so parameters adjusted working capital general norms are determined according to the formula : General tuning coefficient (K) = t x g for norm reserves of raw materials, course materials, in the production of Liao and norm of goods and materials in commercial and t x m for unfinished product norms, semi-finished and finished products.
For example: the price adjustment factor of warehousing: 1.5. On the basis of norms: 0.8.
Thus, the adjustment coefficient to calculate working capital as new norms will be: K = 0.8 x 1.5 = 1.2 When determining the coefficient of K then proceed to redefine the working capital limit for each stitch (reserves of raw materials, fuels, materials, supplies and goods, unfinished products, semi-finished products and products). For example: working capital reserve level at the stage of raw material, materials under the old limit is 500 thousand rumors, the coefficient K is 1.2, the working capital quota redefine this period is: 500 thousand x 1.2 = 600 thousand.
On the basis of redefining working capital limit for each stitch as above that members working capital needs of enterprise norm, enterprises of the Nations ...
In determining working capital limit again this time to note some of the following points: a) for manufacturing companies need to redefine the working capital limit for each part of the plan: the plan of State Affairs, the DIY plan was granted on duỵệt for the whole year, according to the current rules and the instructions above but to note the calculation to each characteristics and elements for each of the tasks planned. To separate was the norm for each part of the plan, the enterprise, the enterprise should determine the proportion of each part of the plan: the proportion of the total output value in the State plan (plans = under State price delivered a total output value of both fixed plans) the total value of raw materials , fuel, materials in State plans delivered (as attributed by giáchỉ = total value of leaders Or of raw materials, fuel, materials of both parts of the plan or by price agreement) b) for distribution activities of the enterprises circulation when redefining the norm working capital for two stitches and rotating reserve goods notes :-as for the sales business unit provides independent accounting, shall be based on the volume of goods moved, rotated and warehousing rates that determine the capital reserves, which rotated to ensure the business plan provided.

-For the business unit sales prices (the price guarantee business, high price) need to identify average inventory import price of each item according to the different price category (price, trade-in value direction, two-way contract price, price, price agreement) as well as general guidance on the method here.
-For the business units new planned supplies DIY was the competent body to browse for an entire year, calculated according to the proportion of the above methods to determine working capital levels of each part of the plan.
-Determining the level of working capital of each part of the plan is to ensure capital distinguished compensating working capital level.
c) for supplies of goods stagnant, slow rotation, then redefine the norm working capital, enterprises are responsible for determining the true value of stagnant material to allow the equivalent capital and plans to put this material in order to use financing out effectively.
 
II. ADDITIONAL FUNDING for WORKING CAPITAL INCREASE LIMIT To ensure there is additional capital working capital level increased in this period, we must first mobilize its own funds of enterprises, of the Union of the enterprises, the Corporation, in the case of really necessary supplemented by new budget levels and bank lending specifically, there are the following sources: 1. production development fund to promote the effective use of the production Development Fund, the enterprises are large balance may take part in additional working capital for the East in the norms.
2. Profits of DIY plans, enterprises are planned and extract a portion of the profits of the DIY plan before profit distribution belong to this plan, in order to supplement working capital in the DIY plan limit.
3. Supplies of goods stagnant, slow rotation is a capital of the enterprises. To mobilize the capital use, enterprises must have planned the liberation of material goods stagnant, slow rotation production business benefit for the enterprises and the State. For supplies of goods to slow rotation there, was part of State budget to allocate capital, and the rest to companies using its own capital (production Development Fund) to cover. When goods supplies and stagnant to slow rotation was clearing the capital recovery companies to reimburse the budget and restoring capital letters of the enterprises. From now with regard to materials, goods stagnant to slow rotation arises the new enterprises to cover himself with his own capital, the budget does not allocate.
4. Spread the goods inventory supplies due to price adjustments, in enterprises arises fare inventory. The number of price difference incurred are used to supplement working capital level is determined, including the budget and the level of capital banks in lending norms, based on the number of actual reserve materials in the norm. The number also admit once complemented, debit factory must submit the State budget immediately when redefining price and transfer filed State budget every time the number of supplies which are sold or put into use.
From now on, every time the Government has adjusted the price, enterprise was based on the price adjustment factor calculated by the above method to adjust the level of working capital and a price difference of materials and inventory goods arise to cover working capital needs, including the level of budget capital levels and capital Bank loans in the level was recalculated by price adjust.
5. After the mobilization of all the resources mentioned above if not offset enough capital budget section level in the level of the enterprise was granted additional budget.
 
III. The PLAN, ALLOCATE And RECOVER The EXCESS WORKING CAPITAL 1. The unit of production-business need working capital planning: redefine working capital limit for each section of the plan identifies the funding to cover the additional working capital quota increases, determine working capital admit things to level up on or filed on a budget. About planning to extract and use the production development fund to determine the portion of this Fund could take on additional working capital itself in the norm. Profit planning part of the DIY plan to determine the profit part of this plan was put into working capital additions in the DIY plan quota before distribution according to the specified mode. The mobilization of planning the use of materials and goods stagnant, slow rotation.
2. in working capital planning norms of production units should clearly distinguish the parts of the plan according to each of the funds as follows: capital goods stagnant supplies working capital quota under the State plan working capital allocation level according to plan approved DIY slow rotation State budget grants the Bank the Capital Bank Loans Bank enterprise list the State has allocated Capital companies have Themselves treated like himself have the budget levels for the production development fund loan from the State to make profits 3. All production units-business, after the redefined working capital limit, determine additional capital plan Please allocate capital and surplus capital to pay filing must send the plans for governing, and submit financial and banking agency Council to approve.
4. In respect of the production units-business users in the district management directly subordinated to the district management directly also redefine the norm working capital requirements that have guides on here.
For the production unit-dependent business (yet independent accounting) the industrial Nations, corporations and companies ... must also redefine the working capital quota according to the aforementioned content posted for the enterprises of the Association.
5. divide the working capital ratio in budget allocations and limit bank lending is still made according to circular No. 14-TT/LB on 24-2-1977 of the Ministry of finance and the State Bank.
6. Based on the aggregate table working capital limit was determined by the production unit-business has been the Governing Body approve, the participation of the finance and banking Council level will be financial organs timely allocation of lack of capital, after the governing body has to regulate where overpaid for where missing; the governing body must submit capital surplus on the budget if redundant.
For working capital in the DIY plan approved, the factory is a part of production Development Fund and a portion of profits in the DIY plan approved for the year to supplement working capital enough characters, missing are loans under the current regime. When plans do move each part or whole to part of the State plan by adding or adjusting the State plan, the working capital section of the mission planning DIY will switch added to working capital quota of the State plan.
For the production facility-business due to the direct management of the district and has been decentralized financial and budget Review Committee by the browser and proceed to allocate capital according to common rules.

7. With regard to the production units-business in the South have old bank loans before June 30-4-1975, resolved as follows; the bank deposit, Bank loan, accounts receivable and accounts payable incurred before June 30-4-1975 was focused on capital account pending, now need through real property inventory thuộcloại to determine the amount of capital available in the enterprise and filed into account capital 85-2 considered the capital of the State budget allocated for the enterprises. This capital was put into the balance of resources, ensure adequate additional working capital quota of enterprises is defined, including the addition of enough capital Bank loans in the level according to the rate specified in circular No. 14-TT/LB on 24-2-1977. After you've added enough working capital quota are redefining capital left, enterprises need to shift up the Union enterprise, Corporation or company, Ministry to supplement working capital portion of the budget level there is a lack of norms for the subsidiary factories and filed into the budget surplus , after conditioning.
The governing body of the Bank and finance based on this circular organization and guide the production units-business urgently redefined working capital levels in 1981 and the quota review working capital for the business-production units in July and early August, 1981.
The reconcile capital between the enterprises in the industry, allocation and working capital loans within the norm, recovery of working capital surplus on the budget submission must be done before June 30, 1981.