Ocean Group (OGC) accepts to lose more than 2,500 billion bad debts because the ability to recover is almost nonexistent
Recently, Ocean Group Joint Stock Company (Ocean Group – stock code: OGC) announced a report to the General Meeting of Shareholders regarding the plan to handle the company’s bad debts.
According to the Board of Directors of OGC, the bad debts of the company and its subsidiaries have existed since 2014 until now, these debts are related to the period of the former leaders with complicated legality, Most debts are unsecured and unlikely to be recovered. The company has taken various measures to recover bad debts but to no avail.
In 2020, the General Meeting of Shareholders approved the authorization for the Board of Directors to consider and decide on the debt write-off and sale of bad debts that have been provisioned and whose debt age is over 3 years according to the audited financial statements as at the date of the meeting. December 31, 2019. In which, provision for short-term receivables is about VND 2,158 billion and provision for long-term receivables is about VND 525 billion. However, the company only sold 1 loan to support capital with the recovery value of 10% of the original value of 40 billion dong.
By 2022, the company has carried out the procedure of public sale of a number of bad debts with a total principal value of about VND 1,072 billion, but there is no interested party to buy debt.
Commenting and assessing the ability to recover debts, the OGC Board of Directors said that the bad receivables had been through the recovery process for many years, were difficult to recover, and there were no interested parties to buy them. bow tie.
Regarding provisioning for risks, the company’s bad debts have all been made 100% provision since their inception in 2014 until now.
OGC said that in order for information on bad debts to be reflected more appropriately, the company needs to classify and re-present this information.
In addition, according to the Circular of the Ministry of Finance guiding the setting up and handling of provisions for bad debts as a basis for determining reasonable and valid expenses for the purpose of calculating income tax obligations. payable, the company’s bad debts are eligible to be handled as irrecoverable debts.
Therefore, the Board of Directors submits to the General Meeting of Shareholders for review and approval to agree to adjust and monitor off-balance sheet on the financial statements ended 31 December 2021 for bad debts that have been set aside. 100% with a total amount of 2,553 billion VND, including:
“Short-term receivables from customers” VND 82 billion
“Other short-term receivables” 869 billion dong
“Prepayment to short-term sellers” 168 billion
“Pending pending assets” 3.5 billion dong
“Prepayment to long-term sellers” 277 billion
The adjustment of off-balance sheet monitoring will record a decrease in the above receivables and a decrease in “provision for short-term bad debts” and “provision for long-term bad debts” respectively on the balance sheet. accounting as of December 31, 2021. Due to 100% provision for receivables, total short-term assets, long-term assets, total assets, and equity of the company will not be affected.
And the fact that the liabilities are tracked in the off-balance sheet account on the financial statements does not affect the debt collection and the company’s rights to these debts.
The Board of Directors of the company submits to the General Meeting of Shareholders to assign and authorize the Board of Directors based on the actual situation of the above bad debts to adjust and monitor the off-balance sheet in the year and the following years as a basis for preparing and presenting the report. company’s annual financials.
At the same time, assign the Board of Directors and the representatives of the company’s capital at the member units to consider and approve the adjustment and monitoring off the balance sheet of bad debts that have been made 100% provision at subsidiaries to prepare and present the consolidated financial statements.
at Blogtuan.info – Source: cafebiz.vn – Read the original article here
