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SDT: Explanation for exception in audited FS 2008
In audited financial statement 2008, the auditors put audit limit on trademark value: the company recorded in history of intangible fixed asset of Song Da corporation trademark value was worth VND 4,930 mil. (accumulated depreciation: VND 1,429,166,668) and writen up Song Da 10 JSC’s equity capital in Song Da 10 –Phuong Dong JSC VND 500 mil. Upon the regulation of Vietnam accounting standard 04 on intangible fixed asset, trademark value is ineligible for being recorded as intangible fixed asset.
Song Da 10 JSC explains exception in audited financial statement 2008 as follows:
1. Trademark of Song Da corporation recorded as intangible fixed asset:
Song Da 10 JSC, Song Da 10.1 JSC preceeded from state enterprizes changing into JSC. Ministry of Construction defined trademark value of Song Da corporation was worth VND 4,930 mil. in the enterprize value. Song Da 10 JSC and Song Da 10.1 JSC posted the above value in intangible fixed asset to depreciate in a duration of 20 years (to present depreciated VND 1,429,166,668). This move with a purpose not to influence much operating results of the company in the first years of JSC was reasonable.
2. Legality of trademark value of Song Da corporation as equity capital in Song Da 10 - Phuong Dong JSC:
- Trademark of Song Da 10 JSC belongs to it. Thus, capital contribution by trademark value to other enterprizes is legal.
- In 2007, Phuong Dong investment, construction, commercial JSC agreed to receive capital contribution of Song Da 10 JSC worth VND 2.5 bil. in cash and VND 500 mil. by trademark value and change the name of the company into Song Da 10 – Phuong Dong JSC
Therefore, capital contribution by the trademark value of VND 500 mil. is legal.
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