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Abstract

Financial reconstruction, or reorganization, made its appearance in Vietnam in 1992 after the policy on privatization (or equitization) was adopted. This policy, at first, aimed at altering ownership, from public to private one, of companies. After 13 years, this project only made poor progress because of insolvable financial problems in state-owned companies. In 2002, to support this project, the Government established DATC (Debt and Asset Trading Corporation), a financial intermediary whose main function is to trade in debt and asset of companies through direct agreements, tendering or decisions by authorities. In 2004, the NA passed the Bankruptcy Law and Chapter 6 of the law states that companies that lose their solvency and go bankrupt are allowed to carry out recapitalization and operate again after reaching agreement with creditors in a maximum period of three years. Although this operation has existed for a long time, record and presentation of financial information of such transactions have not been mentioned fully and timely in the accounting system, which makes it difficult for companies to present such transactions in their ledgers. By analyzing financial nature of the recapitalization, this article tries to offer measures to perfect methods of recording and presenting information about recapitalization in companies to serve the State control.

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