ANNUAL REPORT 2024
TOGETHER IN BELIEF, LEADING IN INNOVATION
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Payables and accruals Payables and accruals are recognized for amounts to be paid in the future for goods and services received, whether or not billed to the Group. Accrual for severance pay The severance pay to employee is accrued at the end of each reporting year for employees who have been worked for more than 12 months at the Group. The accrued amount is calculated at the rate of one-half of the average monthly salary for each year of service qualified for severance pay in accordance with the Labor Code and related implementing guidance. The average monthly salary used in this calculation will be revised at the end of each reporting year following the average monthly salary of the last 6-month period up to the reporting date. Increase or decrease to the accrued amount other than actual payment to employee will be taken to the consolidated income statement.
Investments
This accrued severance pay is used to settle the termination allowance to be paid to employee upon termination of their labor contract following Article 46 of the Labor Code.
Investments in associates
The Group’s investment in associates is accounted for using the equity method of accounting. An associate is an entity in which the Group has significant influence that is neither subsidiaries nor joint ventures. The Group generally deems they have significant influence if they have over 20% of the voting rights. Under the equity method, the investment is carried in the consolidated balance sheet at cost plus post acquisition changes in the Group’s share of net assets of the associates. Goodwill arising on acquisition of the associate is included in the carrying amount of the investment. Goodwill is not amortized and subject to annual review for impairment. The share of post-acquisition profit (loss) of the associates is presented on face of the consolidated income statement and its share of post-ac - quisition movements in reserves is recognized in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates reduce the carrying amount of the investment. The financial statements of the associates are prepared for the same reporting year and use the same accounting policies as the Group. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.
Provision for restoration cost
The Group has the obligation to restore the land on which its factory is located to its original condition at the end of its land lease period. The provision has been calculated using a discount rate. The discount rate applied is the pre-tax discount rate that reflects current market assessments of the time value of money and those risks specific to the liability that have not been reflected in the best estimate of the expenditure. Transactions in currencies other than the Group’s reporting currency of VND are recorded at the actual transaction exchange rates at transaction dates which are determined as follows: Transactions resulting in receivables are recorded at the buying exchange rates of the commercial banks designated for collection; and
Foreign currency transactions
Transactions resulting in liabilities are recorded at the selling exchange rates of the transaction of commercial banks designated for payment.
Investments in other entities
Investments in other entities are stated at their acquisition costs.
At the end of the year, monetary balances denominated in foreign currencies are translated at the actual transaction exchange rates at the balance sheet dates which are determined as follows:
Provision for diminution in value of investments
Provision for diminution in value of the investment is made when there is reliable evidence of the diminution in value of those investments at the balance sheet date. Increases or decreases in the provision balance are recorded into finance expenses account in the consolidated income statement. Held-to-maturity investments are stated at their acquisition costs. After initial recognition, held-to-maturity investments are measured at recoverable amount. Any impairment loss incurred is recognized as finance expense in the consolidated income statement and deducted against the value of such investments.
Monetary assets are translated at buying exchange rate of the commercial bank where the Group conducts transactions regularly; and
Held-to-maturity investments
All foreign exchange differences incurred are taken to the consolidated income statement. Monetary liabilities are translated at selling exchange rate of the commercial bank where the Group conducts transactions regularly.
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