On the Ministry of Finance's Information Portal, readers reflected that Circular No. 232/2012/TT-BTC guiding accounting applied to non-life insurance enterprises, reinsurance enterprises and foreign non-life insurance enterprise branches has regulations on mechanisms for insurance commission costs but does not have regulations for other operating expenses such as sales expenses and support expenses.
Readers request the Ministry of Finance to clarify whether not regulating these expenses is understood as only allowing it to be applied to commission costs or businesses can still apply accounting principles to other expenses of similar nature.
At the same time, readers also requested to clarify whether the enterprise's postponement and allocation of sales support costs in addition to commission costs according to the principle of suitability between revenue and expenses is considered inconsistent with the insurance enterprise accounting regime according to Circular No. 232 or not?
Answering the above content, the Department of Management, Supervision of Accounting and Auditing said that Circular No. 232/2012/TT-BTC was built on the basis of the Law on Insurance Business No. 24/2000/QH10 and guiding decrees for implementation.
Including Decree No. 46/2007/ND-CP dated March 27, 2007 of the Government stipulating the financial regime for insurance enterprises and insurance brokerage enterprises.
According to the Ministry of Finance, Articles 5 and 6 of Circular No. 232 have guided the accounting accounting for insurance commission costs, not the postponement and allocation mechanism for insurance commission costs.
Article 5 of Circular No. 232 stipulates for Account 142 - short-term prepaid expenses", supplementing the content reflecting the actual insurance commission expenses payable that have arisen but have not been included in the insurance business expenses of the arising period, and at the same time guiding the transfer of insurance commission expenses into the original insurance business expenses and receiving reinsurance for subsequent accounting periods in one fiscal year or a 12-month business cycle, along with the principle of accounting for this account.
Article 6 of Circular No. 232 stipulates that insurance exploitation costs of original insurance business activities and reinsurance are reflected in Account 624 - "Insurance business costs", and at the same time guides the principles of accounting for this account.
The Department of Management, Supervision of Accounting and Auditing said that businesses base on the nature of expenses, contracts, documents and financial mechanisms applied to insurance business activities to perform accounting in accordance with regulations.
