Kế toán chi phí sản xuất và giá thành sản phẩm tại các doanh nghiệp chăn nuôi gia súc ở miền bắc việt nam tt tiếng anh

1

INTRODUCTION
Rationales of of thesis topic
With the development of market economy, it has opened a beneficial environment
of business for the enterprises. Also, it is challenging the agricultural enterprises 2in
general and the livestock enterprises in particular. To keep it standing steadily, the price
and quality of the products are always the top concerns of livestock enterprises. From
the competitions of the agricultural products, the livestock products from China and other
ASEAN countries which are imported into Vietnam will be benefited the export-import
tax preferentially 0% having great effects on the domestic animal husbandry. Moreover,
the cost of production of the animal products in Vietnam is higher than that of some
developed nations in that field. To face up with the opportunities and challenges, the
livestock enterprises do need to have innovations in livestocking, increasing in the
productiveness, saving the cost and reducing the price of products in order to enhance the
competitiveness among the domestic and international livestock enterprises.
The industrial enterprises of cattle with their own particularity in the production
are the main material that are the food of feeding which accounts for a large proportion in
total expense. In addition, the feeding products which are diversified in different cattles
and livestocks. Possibly, they are single or dual products, or the products which are each
stage of feeding process. And each product has its own growth and development
characteristics. Moreover, information of norm, estimation, analysis and provision about
production cost and product cost in terms of Financial Accounting and Administrative
Accounting that are one of the key contents to enterprises in general, and in livestock
enterprises in particular. From these problems, it is necessary to perform well in terms of
both production cost and product cost of livestock enterprises of cattle.
On the other hand, through the survey of the actual situation in the livestock
enterprises currently, they have just focused mainly on financial accounting to serve the
purposes of reporting accountin.
In addition, the applications of accounting norms and accounting policies in
accounting performance general, and accounting of production cost and product price in

particular have remained the limitations recently.
Vietnam, currently, with Laws of accounting and 26 principles of accounting and
accounting policies which have served and intergrated with internationals. However, the
application of regulations of norms of international accounting needs to be selective to
meet the government‟s requirements which have remained limited. Biological assets and
agricultural products which have collected from biological assets of many stages which
have not been updated and concerned appropriately.
Thus, research on “Accounting of production cost and product cost in livestock
enterprises in the Northern Vietnam” is a theoretical and practical requirement of
accounting which is suitable with the trend of international integration.
2. Overview of the research works related to the thesis topic
Up to now, there have been many both domestic and foreign works which published the
problems of accounting of production cost and product cost in the aspects of theory and practice.
The author reviewed the excellent works based on the aspects of each follơing work:
2.1 The research works of identification and category of production cost
Identifying and classifying the costs are to provide information for the administrator to
make a decision is extremely important. Therefore, each research work of its different fields
shows its criteria to identify and categorise the certain expenditures. The studies have
1.


2

approached to identifying and classifying the expenditures in the aspects of Financial
Accounting or Administrative Accounting. Here are some considerable works:
- In Eric John Wittenberg „s research (2007): “Michigan‟s dairy profitability and
enterprise accounting on dairy farms”.
- In Tran Thi Du‟s research (2012), the author studied the actual situation of 52 of food
processing for livestock which categorised the expenditures based on their goals and uses.
- In the research of Luca Cesaro and Sonia Marongiu (2008), the authors

supposed that each farm had its own structure of expenditures.
- In Magdalena Kludacz‟s research (2013), classify expenditures as the ability to
induce costs and subjects who are subject to costs.
- In Dang Nguyen Manh‟s research (2018), from the result of survey of 30 of
enterprises of manufacturer of pottery which presented the way to c ategorise the
production cost of those enterprises.
2.2 The research works of building norms and estimations for expenditures
- According to Birmberg et al. (2006), the authors stated the approaches to research on
estimaion of costs of activities which are based on three basic theoretical frameworks.
- In the thesis of Nguyen Quoc Thang (2011), the author considered that norms and
cost estimation had important implications in enterprise administration. Also, cost norms are
the basis for controlling, operating and analysing the results of enterprises.
- The author Moolchand Raghunandan et al. (2012) stated that estimation was a
complex process. The best results of the estimation will be achieved when there is
combination of factors.
- In the research of Luca Cesaro and Sonia (2013).
2.3 The research works of identifying the costs for objects who are subject to the
costs and calculation of the product cost
2.3.1 Study in the actual cost method
In the livestock enterprises, the domestic and foreign studies have been discussed
about this method. Therefore, the author generalises and focuses on determining the
criteria for allocation of production cost and product cos.t
- According to Tahir et al. (2004), the authors stated that the agricultural
companies would face with changes of the scale and diversity of products.
- In the research of John Blaker and et al. (2008), the authors presented 3
methods of identifying the costs.
- In Vietnam, the studies on production costs in the enterprises mainly point out the
common method is the actual cost method. Initial studies on this issue are mentioned in the study
of Nguyen Quoc Thai (1983); Along with that is the study of Doan Dinh Thiem (1995); Nguyen
Thu Hien (2016); Pham Quang Thinh (2018); The authors stated that enterprises are applying the

actual cost method, the period of calculating the prices by the months.
2.3.2. Study in the method of cost- based determination (ABC)
- In Kamilah Ahmad‟s research (2012), the author used the qualitative and
quantitative research methods with the number of survey samples were 1.000 small and
medium-sized enterprises in Malaysia.
- In the thesis of Dao Thuy Ha (2015), the author proposed to apply the ABC
method and thought that this was a method of determining complicated costs and
difficulties in the implementing process.
- Nguyen Thi Dieu Thu (2016) suggested the solutions to apply the ABC method.
- In the Ahmed. E. Haroun‟s writing (2015).


3

- The authors Lu, Cedric; Sridharan, V.G.; Tse, Michael S. C (2016) with their work “
Implementation of Activity – Based Costing Model for a farm: An Australian Case”
2.4. Studies in the application of IAS 41 Standard and the issue of fair value in
accounting of production cost and product cost
- In the study of Liliana et al. (2012), there were significant differences betwe en
the accounting rules and regulations of Romania and IFRS.
- Research by Luca Cesaro and Sonia Marongiu (2013).
- Another study by Hinke Janaa, Stárová Martab (2014), in this study was done by the
author through a survey of questionnaires with a sample of 104 SOEs on measuring Biological
Assets and agricultural products based on the IAS 41 by product cost.
- The article of Kamaruzzaman Muhammad (2014).
- With the study of Adrienna Alys Huffman (2014), the author experienced and
studied empirically in the construction of the theoretical framework of asset measurement
and the linkage between measurement and the use of assets on the framework of survey
samples. It was 182 international companies from 33 different countries applying IAS 41.
- In Vietnam, there have recently been some remarkable researchers related to this

issue. Namely, it is the research of Hoang Thuy Dieu Linh (2018); Nguyen Ngoc Lan
(2017); Trinh Hong Hanh (2018).
Thus, from those studies above, they show that the authors have systematised the
basic theoretical issues of production cost and product cost and the direction of practical
application for each industry, and each specific job to each topic.
The conclusions are drawn from the research works as follows:
- In Vietnam, there have been many research works on production cost and product
cost accounting, but there are are researchers for SOEs, namely in the enterprises. In recent
years, especially since Vietnam joined in the Trans-Pacific Partnership Agreement (TPP), there
has not been a complete research project on accounting of production cost and product cost in
the livestock enterprises in Northern Vietnam.
- Next, the previous studies have not mentioned or already mentioned but there
are still many points that have not been clarified on accounting of production cost and
product cost in the aspect of the administrative accounting of manufacturing enterprises
in general, and industrial enterprises in particular.
- On the other hand, the current studies have been done in accounting of production
cost and product cost associated with the actual activities of enterprises in many types of
businesses and with many scales, areas and different fields of business, but representation is
still low. But studies that have applied this issue in industrial enterprises are still rare or, if so,
just focused on the Financial Accounting perspective. Therefore, it is necessary to continue
researching, implementing, verifying and applying accounting of production costs and product
prices in industrial enterprises to implement in practice effectively.
- Finally, the previous works have not studied, clarified the rationale and proposed
solutions on accounting of production cost and product cost for livestock enterprises on the Financial
and Admistrative Accounting perspectives with specific issues of industrial enterprises such as:
Biological assets and agricultural products obtained from Biological assets for many products, cost of
caring, cost of harvesting, price of livestock product, measuring and presenting information in
controlling Biological Assets and agricultural products at the end of the period when preparing
financial statements in the direction of applying IAS 41 international accounting standard .
3. Objectives of the research

The thesis is conducted with the general objective of studying and proposing
solutions to complete the accounting of production costs and product prices in livestock


4

enterprises in Northern Vietnam. In order to achieve the overall research goal, thesis
needs to implement specific objectives as follows:
- Systematising, analysing, clarifying and developing the basic theoretical issues
of accounting of production cost and product cost in industrial enterprises under the
Financial and Administrative Accounting perspectives;
- Survey, study and evaluate the current status of production cost and product cost for
livestock enterprises in Northern Vietnam on the Financial and Administrative Accounting
perspectives. Indicate advantages, limitations and causes of limitations in accounting of
production cost and product cost in livestock enterprises in Northern Vietnam.
- Propose solutions to complete the accounting of production cost and product
cost in livestock enterprises in Northern Vietnam under Financial and Administrative
Accounting perspectives.
4. The questions of research process.
To achieve the research objectives of the thesis, the questions have been raised in
the research process are as follows:
- What are the basic theoretical issues about accounting of production cost and
product cost in industrial enterprises?
- What is the current status of accounting of production cost and product cost for
livestock enterprises in Northern Vietnam now? What are the advantages and limitations
and what are the reasons for these limitations?
- What are the solutions to improve accounting of production cost and product
cost in livestock enterprises in Northern Vietnam?
5. Subject and scope of the research
5.1. The research subject

The thesis studies the theoretical issues and the reality of accounting of production
cost and product cost in livestock enterprises in Northern Vietnam.
5.2. The research scope
In terms of content: The thesis focuses on researching and systematising the basic
theoretical issues of accounting of production cost and product cost on Financial and
Administrative Accounting perspectives. In order to ensure the concentration the cost content
mentioned in thesis is only production cost of the enterprises does not include selling expenses,
enterprise management costs (operating expenses), and operating expenses of finance, other
costs and corporate income tax costs. Study of accounting of production cost and product cost in
the two leading-countries in livestock breeding, theoretical and practical experience of
accounting of production cost and product cost is such as the US and France to draw lessons for
the implementation process in industrial enterprises of cattle in Vietnam.
The project limited research on accounting of production cost and product cost in
livestock enterprises in Northern Vietnam with livestock product if considering the scope
of the IAS 41 as “products obtained from biological assets for high products of period
“and is” Agricultural Products at time of harvest”.
In terms of research space: The author chose the scope of livestock industrial
enterprises in the provinces of Northern Vietnam with 31 of cattle enterprises according
to the scale of breeding. The surveyed industrial enterprises were typically pig raising
and dairy farming.
In terms of the study time: Researching the current status of accounting of
production cost and product cost of livestock enterprises from 2012 to 2018. Data
collected from vouchers, accounting books and financial statements of livestock
enterprises from January, 1 ST 2016 to December, 31 st 2018.


5

6. Research methodology
6.1. The process of research

The research process is designed and described in steps according to GT.2 diagram
6.2. The method of data collection
6.2.1. Primary data collection
In order to collect primary data, the author uses a combination of three main
methods: survey, interview, and observation.
Investigation method: this data is collected by the author from the industrial
enterprises of different types, including limited liability companies, joint stock
companies, private enterprises with typical farms in areas with domestic livestock
activities of cattle is the pig breeding, dairy breeding. The author selected 31 of industrial
enterprises (Appendix 1A).
The questionnaires were sent to a group of two subjects with a total of 235 votes
sent. In which (i) the group of people who manages the functional departments and
technical heads of the livestock farms with the number of survey sent out was 93 survey
forms (Appendix 1B); (ii) livestock enterprises‟ target group for accountants were 142
questionnaires (Appendix 1C).
Interview method: In order to find out more in-depth and specific information about
enterprises, the author conducted a direct meeting to interview manager with the number of
interviewed people of 18 people to investigate the information requirements to serve the
management and support the decision of the leaders, the role of accounting of production cost
and product cost in livestock enterprises in Northern Vietnam (Appendix 1D).
Observation method: During the study of the topic along with the interview, the
author observed the actual process of livestock production of livestock enterprises in
Northern Vietnam.
6.2.2. Secondary data collection
Secondary data sources were collected from Website of cattle enterprises, Vietnam
Livestock Association, Vietnam Veterinary Association, Ministry of Agricultural and
Rural Development; Summary of previous studies by domestic and foreign authors; Refer
to the analysis of experts; Summary of statistical yearbook data; Research works, articl es
on books, newspapers, magazines on Financial Accounting, Administrative Accounting,
Administrative Accounting of cost textbooks of many authors.

6.3. The analysis method
After collecting the data, the author analysed the data, using methods: synthesis
comparison, economic analysis.
6.4. Method of presenting data
The author presents qualitative and quantitative data mainly on two forms, tables
and diagrams.
7. Research results and contributions
The thesis presented the research results and the contributions of the thesis in
theory and practice.
8. Conclusion
In addition to the introduction and conclusion, the content of the thesis consists of 3 chapters:
Chapter 1: The basic theoretical issues of accounting production cost and product
cost in livestock enterprises.
Chapter 2: the actual accounting of accounting of production cost and product cost
in livestock enterprises in Northern Vietnam.
Chapter 3: Solutions to improve accounting of production cost and product cost in
livestock enterprises in Northern Vietnam.


6

CHAPTER 1:
THE BASIC THEORETICAL ISSUES OF ACCOUNTING OF PRODUCTION
COST AND PRODUCT COST IN LIVESTOCK ENTERPRISES
1. Characteristics of livestock activities affecting accounting of production cost and
product cost in industrial enterprises
1.1.1. Characteristics of livestock products affecting accounting of production cost
and product cost in industrial enterprises
First of all, the author mentioned some related and specific terms of industrial
enterprises such as: animal husbandry, livestock, livestock types of livestock enterprises,

animal husbandry products.
The main characteristics of livestock products are:
Firstly, livestock products are very diverse
Secondly, livestock products are seasonal
Thirdly, livestock products are able to reproduce naturally
Fourthly, livestock products are living organisms
1.1.2. Characteristics of the livestock process affecting accounting of production
cost and product cost in industrial enterprises
In industrial enterprises with the basic characteristics of the breeding process
affecting the accounting of production cost and product cost is synthesised by the author
including: Forms of production organisation, production time of livestock products,
factors of natural conditions, weather, epidemics, main breeding methods in industr ial
enterprises, production management organisation in industrial enterprises.
To sum up, on the basis of the characteristics of livestock products , especially livestock
products in industrial enterprises and methods of animal husbandry, production organisation in
livestock have a direct impact on accounting of production cost and product cost. With the
analysed contents, it is the basis for the next research of the author in the topic.
2. General problems of production cost and product cost in industrial enterprises
1.2.1. Identify and classify production cost
1.2.1.1. Definition of production cost
The author summarised views on production cost , then it is likely to draw the
author‟s perspectives on production cost.
Thus, there are many concepts of production cost, but from the author‟s point of view, it
is approaching the concept of production costs: production cost is the expression of money of
the entire living labor and physical labor and cost. Other necessities that businesses have
spent to carry the production process in a certain period.
1.2.1.2. Classification of production cost
In industrial enterprises in general and livestock enterprises in particular,
production cost of enterprises include many type of costs. Depending on management
requirements and cost characteristics in the enterprises, it is possible to classify costs in

different way,each classification method brings specific effects for management and
accounting on economic or economic aspects.
1.2.2. Product price and product price classification
1.2.2.1. Defintion of product cost
The author summarised the views on production cost. The majority points of view
are favourable on certain angles, which are fundamental in terms of the theoretical basis
of product cost in Vietnam.


7

To sum up, there are many opinions and approaches on production value, but the author
agreed with the price approach: Product cost is the monetary expression of production cost
calculated for a volume of products or services certain to be completed.
1.2.2.2. Classify product cost
In addition to the standard of production cost classification as other common
manufacturing enterprises, industrial enterprises can classify production cost according to a
number of different criteria: Classification of production cost based on data and timing of
calculation of costs, classification by the scope cost in price, classificaition by the purposes of
international economics, classification by the orientation of applying the IAS 41. Each industrial
enterprise depends on product characteristics, breeding process, type of animal and information
requirements for governance. Therefore, industrial enterprises need to choose for themselves the
appropriate costing system.
3. Accounting of production cost in livestock enterprises in terms of Financial Accounting
1.3.1. Basis, types, principles, dominant accounting standards of accounting of
production cost and product cost of livestock enterprises
1.3.1.1. Basis of accounting
There are two basic accounting bases: cash accounting and accrual accounting. Within
the scope of the thesis, cumulative accounting research is the basis for recognising arising
economic operations affecting production cost and product cost factors of livestock enterprises.

1.3.1.2. Types of accounting
Accounting theories have been developed and applied in practice and accounting
has really become a science with basic accounting types such as static accounting,
dynamic accounting and current accounting. Within the scope of the thesis, the author
only mentions dynamic accounting which directly affects the accounting of production
cost and the quality assurance of livestock enterprises.
1.3.1.3. Principles of accounting
Industrial enterprises are based on accruals and dynamic accounting models,
generating many accounting, accounting principles to accounting of production cost and
product cost of livestock enterprises such as: Principles of original prices, prudential
principles, principles of materiability, principles of suitability.
1.3.1.4. Accounting Standards
For VAS, the main standards governing the accounting of production cost and product cost
of livestock enterprises can be mentioned as VAS 01, VAS 02. For IAS, following the orientation
of applying international accounting standards. Combined from the relevant documents standards
directly control the accounting of production cost, the quality assurance of livestock enterprises is
the IAS 41A “Agriculture”. The contents of accounting of production cost and product cost under
the Financial Accoungting perspective of enterprises in general, and livestock enterprises in
particular include the following contents:
+ Receiving information of production cost and product cost of livestock
enterprises through accounting vouchers
+ Processing and systematising information of production cost and product cost of
livestock enterprises through accounts and accounting book system
+ Providing information of production cost and product cost of livestock
enterprises through the financial statement system.
1.3.2. Collecting information of production cost and product cost through accounting vouchers
Based on accounting vouchers to collect information on costs and prices of livestock
enterprises as a basis for accounting books. The contents include: Organise the construction of
a system of accounting vouchers, receive, check, complete, rotate and preserve the documents.

8

1.3.3. Processing and systematising information through accounts and accounting books
1.3.3.1. Processing and systematising information through accounts
Organisation of the accounting account system: For the stock of information
Technology, Research and Development, the expenditures of production cost and product cost.
Since then, the content and process of accounting of production cost and product cost in
livestock enterprises will be generalised through accounting diagrams in the accounting of
inventory according to the methods of perpetual inventory count and periodic inventory count.
1.3.3.2. Processing and systematising information through accounting books
In industrial enterprises in keeping a written record of production cost related to
operations. Product cost is designed to include general and detailed books. In addition to
the prescribed accounting books, it is possible to base on the characteristics of the
livestock products, require managers to open the detailed books to suit the units.
1.3.4. Presentating of information of accounting of production cost and product cost on
financial statements
Information on production cost and product cost shown on the financial statements includes
two basic indicators: the cost of goods sold index on the report of business results and the target of
unfinished business production cost on the balance sheet or for with enterprises complying with
Circular 133/2016/TT-BTC is a report on the situation of assets.
1.4. Accounting of production cost and product cost in livestock enterprises in
terms of Administrative Accounting
1.4.1 Develop norms and estimations of production cost and product cost in livestock enterprises
1.4.1.1System of cost norms
Building norms can be done with one or more combinations of methods to obtain the
best results. With the commonly used methods is the method of statistic al experience,
economic technical methods, and direct testing methods. Livestock enterprises that implement
to build the cost norms including: Norms for of labor protection cost, norms for construction
investment cost, and norms for production cost.

1.4.1.2Estimation system of production cost
Estimations are also considered as calculations, expected to co-ordinate the objectives to
be achieved with the ability to mobilise resourcing the process of business production
according to the quantity and value targets at the most time in the future. The estimation
system of livestock enterprises is mentioned only focusing on the estimation of the stock of
information technology, the estimation of the construction investment and estimation of the
production cost in the livestock enterprises of the agricultural sector.
1.4.2 Method of determining cost for objects who are subject to expenses
1.4.2.1Objects of cost accumulation
Objects of cost accumulation of livestock enterprises can be as follows: groups,
animal farms, orders, processing contracts, and products.
1.4.2.2Method of cost accumulation
When collecting production cost and product cost, the enterprises should determine
and select appropriately costing methods. With the method of collection can be used is as
the direct collection method and indirect application method.
1.4.3 Product cost
1.4.3.1Cost object
Cost object of livestock enterprises is a type of livestock products that livestock
enterprises have completed the breeding process, which requires calculating the total cost
and unit price.


9

1.4.3.2Time and period of product cost
The period of calculating the price of livestock products is stipulated uniformly in
the livestock enterprises which are the finished products in any year, then calculate the
cost of products of that year. Therefore, the expenses paid for this year, but after the new
products are collected, all expenses of this year are considered as unfinished products at
the end of the period, moving to the next period.

1.4.3.3Method of calculating product cost
In livestock enterprises, when determining production cost for each type of
livestock, the method of calculation of cost is applied as follows: Calculating production
cost for cattle for meat ( growing, and raising fat); production cost calculation of breeding
animals; calculating production cost of domestic animal through the orders; calculate cost
by the ABC method.
1.4.4 Providing, using and analysing information of production cost and product cost
serving for management in livestock enterprises
1.4.4.1Providing information of production cost and product cost through administrative
reporting system
Administrative report means that it reports specifically, reflecting criteria for the
production costs and product prices clearly according to various criteria in order to
provide timely and sufficient information management requirements of enterprises.
1.4.4.2 Using information of production cost and product cost to serve business administration
Information about production cost and product cost is provided on the reports of
livestock enterprises. From accurate, complete and timely information, it helps the
managers make timely, appropriate and effective decisions if the information provided is
accurate. Information about production cost and product cost is used from information on
production reports, product cost report, according to cost items, reporting cost based on
variable fee.
1.4.4.3 Analysis of information of production cost and product cost for corporate governance
The methods can be used in the process of cost information analysis such as
exclusion, and comparison. To consider the fluctuations between the total actual cost
incurred and the total standard cost applied through the total volatility indicator.
1.5
Accounting of production cost and product cost of advanced countries and
lessons for Vietnam
1.5.1 Accounting of production cost and product cost in some advanced countries
1.5.1.1Accounting of production cost and product cost according to the US accounting
system

In terms of accounting documents, Financial and Administrative Accounting documents,
all of them use a single accounting voucher system. In addition, there is a separate accounting
voucher organisation to collect detailed information and forecast information.
In terms of accounting accounts, the system of general accounting accounts is used
for the purposes of Financial Accounting and analytical accounts for the purposes of
Administrative Accounting. In addition, the US does not build a system of accounting
accounts of production cost uniformly for enterprises.
Accounting book: Financial accounting uses the system of accounts and general
accounting books, international payment system and account details of production cost in
accordance with management requirements.
Accounting report: Each accounting department has the function of receiving and
providing accounting information both in general and detailed form according to
management requirements. The Administrative Accounting reports provide information


10

for internal enterprises. Also, the financial reporting system provides information for
external businesses.
1.5.1.2Accounting of costs and prices according to the French accounting system
France is a country that applies a static accounting model and the design Financial
Accounting and Administrative Accounting systems are separate.
Accounting vouchers are used, apart from the general accounting voucher system of
financial accounting for international economic development, there are separate accounting
vouches for internal management of enterprises. System of accounting accounts built
separately for financial accounting and international economics. System of financial
accounting accounts prescribed and required for enterprises.And the system of administrative
accounting accounts depends on the management requirements of the enterprises to open and
decentralise the account details. About the system of accounting books, there is an
independecne between financial accounting and international economics. In particular,

administrative accounting builds a separate accounting system to serve the recording of
international accounting operations.
In terms of the accounting reporting system:
In addition to the reports prepared under financial accounting regulations. In
addition, for production cost and product cost accountants, International economic
relations have setup separate report forms such as report on production estimates, profit
and loss reports for each division. At the same time, the planned targets and estimates are
also concerned.
1.5.2. Lessons learned from accounting of production cost and product cost for
livestock enterprises in Northern Vietnam
Financial accounting is an official accounting, regulatory, and economic
accounting plays an important role in implementing the function of managing,
controlling, estimating and providing information for management decisions. Therefore,
in the context of Vietnam‟s accounting system integration, it is build on the view of
respecting international practices and standards and applying it to each stage of economic
development in Vietnam.
CONCLUSION OF CHAPTER 1
In Chapter 1, the thesis systematises, analyses, classifies and develops theoretical
issues about accounting of production cost and training practice in livestock enterprises.
In particular, the thesis has clasified the characteristics of animal husbandry that affect
accounting of production cost and product price, identify and classify accounting
production cost and product price in the aspects of Financial Accounting and
Administrative Accounting, study experience of production cost and product price
accounting from some countries such as the US and France to draw lessons on
accounting of production cost and product price for livestock enterprises in Vietnam. The
content of Chapter 1 is an very important theoretical basis for the research and
assessment of the current status of accounting of production cost and product price in
livestock enterprises in Northern Vietnam . Also, it proposes some solutions to complete
in the following chapters of the thesis.

11

CHAPTER 2
THE CURRENT SITUATION OF ACCOUNTING OF PRODUCTION COST
AND PRODUCT COST IN THE ENTERPRISES OF LIVESTOCK BREEDING
IN NORTHERN VIETNAM
2.1. Overview of livestock businesses in Northern Vietnam
2.1.1. General introduction to livestock industry and livestock enterprises in Northern
Vietnam
Animal husbandry is a key industry in the livestock industry. Up to now, livestock
production has developed rapidly and strongly in terms of husbandry scale as well as the
number of households involved in animal husbandry.
According to statistics from October 2018, in raising cattle with livestock s uch as
dairy cows and pigs, the number of cows in the whole country was 294,382 (of which
Northern Vietnam was 60,711, accounting for 20,6%, compared to the whole country.)
As for pig raising, the number of pigs of the whole country was 49,743,746 (of whic h
Northern Vietnam was 23,848,050, accounting for 47.95% of the whole country).
Since then, it has been shown that animal husbandry in Northern Vietnam plays a key
role in the livestock industry of our country. Specific figures are described in the chart(2 .1).
Diagram 2.1: Statistics of cattle ranching by 10/2018
75.628

98.173

23.848.050
9.351.315

60.711

6.380.536

3.391.997

Pork (Animal)

ern

Vi
etn
am
(1)
o rt
1 .R
he
e
d R + (2 )
rn
3.
M
i
No
ve
idl
rD
rth
an
elt
ds
Ce

a
an
ntr
d
al
M
an
.
.
.
dC
4.
en
Ce
tra
n tr
...
al
Hi
gh
l
a
6.
nd
5.
M
s
So
ek
uth

on
gR
eas
ive
t
rD
elt
a

2 .N

ern
No
rth

PRODUCTIVITY OF MILK COW

14.496.735 9.815.673
6.307.490

2 .N

Milk cow (Animal)

25.000.000
20.000.000
15.000.000
10.000.000
5.000.000
-

No
rth

35.979
32.026 28.685 23.891

Vi
etn
am
o rt
(1)
1 .R
he
+(
e
d
r
nM
3.
2)
R
iv
No
rth idlan er D
elt
Ce
ds
a
an

ntr
d.
al
..
an
4.
d
Ce
Ce
n tr
n tr
al
..
Hi
gh
6.
lan
M
5
d
.
ek
o n So u s
th
gR
ive eas t
rD
elt
a

100.000
80.000
60.000
40.000
20.000
-

PRODUCTIVITY OF PORK

(Source: General Statistics Office & summary’s authors)
2.1.2. Organisational characteristics of animal husbandry, product, breeding
process of livestock enterprises in Northern Vietnam
2.1.2.1. Organisational characteristics of breeding activities
Animal husbandry in terms of how livestock is organised includes two basic types:
natural breeding and industrial breeding.
In terms of the form of husbandry, the livestock system in Vietnam is the main
types of animal husbandry currently as follows: the State-owned breeding enterprises,
livestock farms, cattle-breeding households.
2.1.2.2. Characteristics of products and methods of animal husbandry
+ Product features: With the main products in animal husbandry mentioned by the
author in the thesis are livestock products, meat products (raising and fattening), fresh
milk products.
+ Livestock raising method: Livestock products can be formed through one of two
methods of raising animals: (i) self-consumption of breeding; (ii) breeding by the the
orders; (iii) outscouring livestock.


12

2.1.2.3. Characteristics of cattle breeding process

+ The process of raising livestock is raising pigs
+ The process of raising cattle is dairy farming
2.1.3. Characteristics of management organisationi in livestock enterprises of cattle in
Northern Vietnam
+ Type of enterprises surveyed
+ Administrator‟s position
+ The age of the administrator
+ Level of training of administrator
+ Building a management of organisation model
2.1.4. Characterisitics of accounting in livestock enterprises of cattle in Northern Vietnam
2.1.4.1. Characteristics of organisation of accounting apparatus in livestock enterprises
of cattle in Northern Vietnam
When studying the situation in livestock enterprises in Northern Vietnam, most
enterprises used accounting models combining between Finacial Accounting and
Administrative Accounting and organised the apparatus in the concentrated form.
2.1.4.2. Characteristics of accounting policies applied in the enterprises
@Accounting regime applied in the businesses
According to the author‟s survey, most livestock enterprises in Northern Vietnam
applied accounting regime according to Circular 200/2014/TT-BTC with 22/31
(accounting for 71%) of livestock enterprises in Northern Vietnam, the remaining 9/31
(accounting for 29%). The livestock enterprises implemented the accounting regime
issued under Circular 133/2016/ TT-BTC.
@Form of accounting applied in the enterprises
According to survey data, there are 27/31 (accounting for 87.1%) enterprises
applying the general journal form, 1/31 (accounting for 3.2%) of enterprises recording in
the form of vouchers logs, having 3/31 (accounting for 9.7%) recorded in the form of
book vouchers, other forms did not apply.
2.2. The current situation of accounting of production cost and product cost in
livestock enterprises in Northern Vietnam
2.2.1. Classification of production cost in livestock enterprises in the North

Through survey results in livestock enterprises in Northern Vietnam, there were
31/31 (accounting for 100%) of livestock enterprises that applied the cost classification
according to the content, the economic nature of costs and the cost items to recover
service and information for Financial Accounting . Besides, through survey of livestock
enterprises of cattle with 8/31 enterprises (accounting for 25.8%) have implemented cost
classification according to the behavior of costs, including 6/31 large -scale enterprises
and 2/31 small and medium-sized enterprises following this classification.
2.2.2.The current situation of accounting of production cost and product cost in cattle
industrial enterprises in Northern Vietnam on the perspective of financial accounting
2.2.2.1. The current situation of applying accounting voucher system to receive information
In accounting of production cost and product cost of livestock, to get accurate,
complete, timely and objective information, it is necessary to have accounting vouchers.
Currently, livestock enterprises of cattle in Northern Vietnam have belonged to the author who
surveyed the majority of using the accounting voucher system under the guidance of
Vietnamese accounting regime in Circular 200/2014/TT-BTC dated September 30, 2016 was
8/31 (accounting for 25.8%) of livestock enterprises. There is 1/31 livestock enterprises have


13

not been updated timely the design of the accounting software, so when printing current
accounting documents, the accounting regime of Decision 48/2006/ QD- BTC is still followed.
Simultaneously, through survey of the situation of livestock enterprises in
Northern Vietnam, the majority of livestock enterprises mainly build accounting
vouchers systems under the guidance of the accounting regime, only 6/31 (accounting for
19.4%). Livestock enterprises have to design and supplement their own accounting
vouchers forms in accordance with the characteristics of livestock enterprises.
2.2.2.2. The current situation of processing, systematising and providing information on
production cost and product cost of livestock enterprises in Northern Vietnam
(a) System of accounting accounts

According to the author‟s survey, there was 22/31 (accounting for 71%) of
enterprises applying the accounting account system in accordance with the provisions of
Circular 200/2014/ TT-BTC issued on December 22 2014 and having 9/31 (accounting
for 29 %) Enterprises which applied accounting system according to the provisions of
Circular 133/2016/TT-BTC issued on September 30, 2017. At the same time, each
livestock enterprises based on the specific characteristics of each enterprise, livestock
scale, type of livestock products for accountants to open production cost and product cost
accounts. Also, there were differences among enterprises in building detailed accounts.
(b) Processing and systematising information of production cost and product cost
Process of accounting the arising economic operations of the collection of production
cost and the calculation of livestock value in the livestock enterprises to carry out the
accounting of inventories according to the EZ method and calculate VAT according to the
deduction method is 30/31 enterprises (accounting for 96,8%). Through the survey, such as :
Thai Viet Company Limited; Phu Thai Agricultural Products Development Co, Thai Nguyen
North Song General Import-Export Co., Ltd. The remaining industrial enterprises carry out
according of inventories according to the method of accounting of 1/31 (accounting for 3.2%)
and paying VAT by the deduction method. Namely, the collection of production cost and
product price of livestock enterprises is as follows: Accounting for production cost of
Information Technology, Research and Development, Production and Distribution, Production
cost for the whole enterprise, accounting for the provision for devaluation of livestock products
in livestock enterprises cattle in Northern Vietnam.
At the same time, through the survey of situation of livestock enterprises in
Northern Vietnam, the majority of livestock enterprises mainly build accounting
vouchers system under the guidance of the accounting regime, only 6/31 (accounting for
19.4%) Livestock enterprises have to design and supplement their own accounting
voucher form in accordance with the characteristics of livestock enterprises.
2.2.2.2. Current situation of processing, systematising and providing information on
production cost and product cost
(a) System of accounting accounts
According to the author‟s survey, there are 22/31 (accounting for 71%) of enterprises

applying the accounting account system in accordance with the provisions of Circular
200/2014/TT-BTC issued on December 22, 2014 and having 9/13 (accounting 29%).
Enterprises apply accounting system according to the provisions of Circular
133/2016/ TT-BTC issued on September 30, 2016. At the same time, each livestock
enterprises based on the specific characteristics of each enterprise, livestock scale, type of
livestock products for accountants to open production cost and product price accounts.
And, there are also differences among enterprises in building detailed accounts.


14

2.2.3. Current situation of accounting of production cost and product cost in livestock
enterprises in Northern Vietnam on the perspective of management accounting
2.2.3.1. Current situation of norms and production cost and product cos t estimates
@Status of construction of cost norms
Building norms in industrial enterprises has only been implemented in large -scale
industrial enterprises with a number of major cost norms, while small-scale industrial
enterprises, especially private enterprises, are often not build. Norms or if built, only the
feed norms have not been set yet. However, the norms for veterinary drugs for pregnant
sows are to be established, the norm of vaccines for cattle and cattle by age based on
these costs. Account for a relatively large proportion affecting production cost especially
imported drugs and vaccines.
@ The current state of construction estimatimation
Organisation of estimation is an important task of management in livestock
enterprises. The estimation situation of surveying enterprises in livestock enterprises, the
author received 15/31 (accounting for 48.4%) of enterprises having made estimates.The
remaining 16/31 enterprises did not make the estimation. The period of estimation was
made by year with 7/15 enterprises, with 8/15 enterprises determining the estimation
period every 6 month. Types of basic cost estimatimation are set up such as cost of direct
materials, cost of direct labours , cost of general production.

2.2.3.2. The actual situation of determining costs for objects who are subject to costs of
livestock enterprises in Northern Vietnam
(a) Objects of cost accumulation
Through the survey of the situation in livestock enterprises, the author can collect
the objects of gathering the costs of livestock enterprises including: each stage of
livestock products with 2/31 enterprises (accounting for 6.5%), was the final product of
livestock enterprises of cattle were slaughtered pigs; cattle breeding was fresh milk, or
calf with 9/31 businesses (accounting for 29%), was an order under the cooperation
contract between the feed supplier and the consumption of all outputs with 3/31
enterprises. There were 17/31 enterprises (accounting for 54.8%) determine the objects to
collect costs according to the departments, team, and farms.
(b) Method of collecting production cost
According to the author‟s survey document with 31/31 enterprises, there is a
distribution of cost of general production. However, the data shows that there are 21 out
of 31 enterprises that allocate and each enterprise uses different methods of allocation of
import-export cost. It shows that 12/12 enterprises (accounting for 57.1%) are using the
allocation criteria. Import-export costs are cost of direct material. This is the standard that
is commonly used in livestock enterprises of cattle, the remaining 7/21 (accounting for
33.3 %) using the quality of research 2/21 businesses use other criteria according to the
survey came up for allocation of Import-export costs.
Livestock enterprises of cattle have not applied the ABC method and the number
of enterprises known this method is only 12/31 (accounting for 38.7%). 3%). The answer
of the enterprise is unknown to the ABC method.
(c) Objects, period of calculation of production cost and product cost and
method of calculating costs in livestock enterprises of Northern Vietnam
@Objects of product cost
According to survey documents, there are 26/31 (accounting for 83.9%) of
livestock enterprises determined that the products obstained at the end of the br eeding
process . In addition, there are 2/31 enterprises identifying the objects to calculate the

15

cost as the product of each stage in the regulation. In the breeding program, there are 3/31
enterprises identifying the objects to calculate the price according to the orders.
@ The period of the product price calculation
In the current livestock enterprises, the determination of the price calculation period has
not been unified and mainly implemented with the common goal of the livestock enterprises is
to establish financial statements. Therefore, in order to simplify the majority of enterprises with
15/31 enterprises (accounting for 48.4%) determined that the period of calculation is
December 31 every year, 4/31 enterprises (accounting for 12.9%) determine the periodic
calculation the price of cattle ranches, the remaining 12/31 (accounting for 38.7%) of livestock
enterprises determines the period of monthly price calculation, in accordance with the period
of cost collection and determining the results of enterprises on software accounting. Normally,
these livestock enterprises are all large-scale husbandry.
@ Method of the product cost calculation of livestock enterprises
It can be seen that, each livestock enterprise determines the object to calculate the
different costs. The method of determining the price for each object of the cost is
different in order to be more specific. We consider in the livestock enterprises in
Northern Vietnam as follows:
Firstly: Determining the cost of livestock products is the cattle meat products for
sale according to the method of self-production and self-consumption with closed
breeding process.
+ At Thai Viet Company Limited, all the piglets of the company in March 2017
were directly consumed with the value of 968, 352, 027 VND, the number of pigs
remaining 1,000 breeds of the company directly transferred to regulations. Pig breeding
program at the company with a value of 330, 911, 000 VND.
+ Summary of production cost during pig raising phase: the costs of direct
material: 1, 173, 643, 441 VND, the costs of direct labour: 118, 662,000 VND, the costs
of general production: 554, 491, 442 VND.

+ Evaluation of unfinished products at the end of the pork product period: 1, 500,
000, 000 VND.
So, the total price of pork for sale in the period: 346, 796, 883 VND. Diagram of
accounting process of production cost collection and product price in Thai Viet pork
products is summarised in Appendix (2.32).
Process of accounting accumulation of production costs and product prices for pork exp ort
TK1541

TK1545
0
1.173.643.441

1.173.643.441

TK632
TK1542
346.796.883
118.662.000

118.662.000
TK1544

554.491.442

554.491.442
1.846.796.883
1.500.000.000

346.796.883

(Source: Thai Viet Company Limited and summary’s authors)
Secondly: Determine the product cost in dairy enterprises with closed breeding process.


16

From the document of Ho Toan Joint Stock Company, the total price of products
were determined in the period of raw milk product was 23, 2789, 821,974 VND, total
milk output in 2018: 2,165,303 kg, unit price of Fresh milk was 10, 745.76 VND/kg, the
cost of waste/ calf products was monitored separately and estimated value of 6,998.008
VND/ head with 50 animals. Therefore, the company did not determine the price of the
cow and the calf. The calf is born, but only synthesises the cost and determines the cost
of the main product being raw milk. Diagram of accounting process of gathering
production cost and product price for dairy farming activities of Ho Toan Joint Stock
Company is summarised in Appendix (2.34).
(Proces of accounting of production cost and product price in dairy farming in 2018
TK621

TK154
1.494.724.319
20.066.352.509

20.066.352.509
TK622
2.761.419.653

23.267.821.974
TK1552 (Cow culling)

2.761.419.653

TK627

10.184.204.539

TK1551 (Raw milk)

349.900.400
TK2115 (Cow breeding)

10.184.204.539

5.484.233.532
TK1541 (purchased cows, newborn cows)
1.638.000.000

33.011.976.701
3.766.745.114

30.739.955.906

Source: Ho Toan Company Limited and summary’s authors)
Thirdly: Determine the price of livestock products that are pork products for sale
according to the orders with closed breeding process.
According to survey, there were 3/31 (accounting for 9.6%) of industrial
enterprises applying the method of calculating the price according to orders. Namely, in
January 2018, in Thai Viet Company Limited, production was carried out by the orders
with Huong Nguyen Thinh Joint Stock Company. In March 2018, the company‟s orders
were not completed, so the total cost was the value of unfinished products on account
1545 with the amount for the order code of the Contract 01: 325, 967, 622 VND and the
order code of Activity 02: 388, 868, 758 VND. The diagram of the accounting process of

gathering production cost and product price for pork products according to Thai Viet
Company‟s orders is outlined in Appendix (2.40).
Process of accounting accumulation of production costs by the orders, 03/2018


17
TK1545 ( HĐ01)

TK1541
204.800.000
240.774.999
445.574.999

204.800.000
240.774.999
445.574.999
TK1542

204.800.000
21.359.162
99.808.460

47.464.804
47.464.804

21.359.162
26.105.642
47.464.804
TK1544

325.967.622
TK1545 ( HĐ02)
240.774.999

221.796.577
26.105.642

221.796.577

99.808.460
121.988.117
221.796.757

121.988.117
388.868.758

(Source: Thai Viet Company Limited and summary’s authors)
Fourthly: Determinine production cost of breeding is a product of pork
slaughtering by the orders which are not based on breeds of livestock enterprises
(outscouring livestock)
Through the study of the situation that livestock enterprises with only 31%
(accounting for 6.5%) are livestock enterprises that process products but these companies
do not currently calculate the cost of each order of finished products when returning the
processed goods, but synthesizing all expenses with the costs of direct labor and the costs
of fixed asset deprciation accounts for the largest proportion and other expenses,
synthesizing costs in TK 642 “the costs of management” to determine the profit and loss
of processing activities in the month. According to the accounting data of Northern Cau
River Company, December 2017 in Table (2.8) is as follows:
Since then, the current cost of processing outscoured livestock enterprises is not
determined. Therefore, it is difficult for enterprises to provide information on production

cost and production value of livestock enterprises.
2.2.3.3. The current situation of change analysis in production cost and product
cost for corporate governvance in livestock enterprises in the North.
The contents of the analysis through the study of the situation in livestock
enterprises in Northern Vietnam are as follows:
+ Analysing cost fluctuations through norms and estimatimations
+ Analysing cost fluctuations through cost and price reports
2.2.3.4. Administrative accounting report in livestock enterprises
Through surveys of livestock enterprises in Northern Vietnam, the financial system
has been fully implemented by enterprises. However, for the cost management and cost
reporting system with only 12/31 (accounting for 38.7%). The livestock enterprises set up
periodically on a monthly basis or established when required by the internal manager is
4/31 (accounting for 12.9%) of enterprises. The remaining of 31/31 (accounting for
48.4%), livestock enterprises have established management reports made at the end of
the accounting period to serve the management.
2.3. Assessing the current status of accounting of production cost and product cost
in livestock enterprises in Northern Vietnam
2.3.1. The advantages of accounting of production cost and product cost in livestock
enterprises in Northern Vietnam
The advantages of accounting of production costs and product prices in livestock
enterprises in Northern Vietnam are summarised in the following contents:


18

+ Classification of production cost and identification of objects of cost
accumulation
+ The method of cost allocation
+ Accounting of production cost and product cost in livestock enterprises in
Northern Vietnam in the aspect of Financial Accounting

+ Production cost and product cost accounting in livestock enterprises in Northern
Vietnam in the aspect of Administrative Accounting
2.3.2. Limitations and causes of accounting of production cost and product costin
livestock enterprises in Northern Vietnam
2.3.2.1. Limitations
The drawbacks of accounting of production cost and product cost in livestock
enterprises in Northern Vietnam are summarised in the following contents:
+ Production cost classification
+ identification of cost collection objects and methods of cost accumlation of
production
+ Restrictions in accounting of production cost and product cost in livestock
enterprises in Northern Vietnam in the aspect of Financial Accounting
+ Limitation in the accounting of production cost and product cost in livestock
enterprises in Northern Vietnam in the aspect of Administrative Accounting
2.3.2.2. Causes
+ Lack of guiding documents and applications of specific accounting regimes for
livestock enterprises
+ In livestock enterprises, they have not built up a strong control system, only
focused on Financial Accounting and had little interest in Administrative Accounting.
+ Not fully aware of the importance of Administrative Accounting in production
cost and product cost
+ Livestock enterprises associated with many risks, mainly small-scale,
qualifications and accounting capacity are still limited.
CONCLUSION OF CHAPTER 2
In chapter 2, the thesis has studied, surveyed and evaluated the status of accounting
production cost and product cost in the aspect of Financial Accounting such as the
organisation of accounting vouchers, accounting accounts, production cost and product
cost accounting methods, and systems. Accounting books, which present information on
the financial statements and the impact of presenting information on the current livestock
enterprises and orienting to apply IAS 41 standards. Simultaneously, it is necessary to

carry out the survey of the actual situation of accounting of production cost and product
cost for livestock enterprises in the aspect of Administrative Accounting with contents
such as setting up cost norms, estimating production cost, determining expenses for the
objects who are subject to the costs, the actual situation of fluctuation analysis of
production cost, the costs for managing enterprise, and reporting system of
Administrative Accounting of livestock enterprises in Northern Vietnam. Thereby, the
thesis clearly points out the achieved results, limitations and causes in livestock
enterprises. This is a practical basis to provide solutions to complete the accounting of
production cost and product cost in livestock enterprises in Northern Vietnam in the
contents of Chapter 3.


19

CHAPTER 3
SOLUTIONS TO COMPLETE THE ACCOUNTING OF PRODUCTION COST
AND PRODUCT COST IN ENTERPRISES OF LIVESTOCK BREEDING IN
NORTHERN VIETNAM
3.1. Development orientation of livestock enterprises and requirements for
completing accounting of production cost and product cost
3.1.1. Development orientation of livestock enterprises
the organization of animal husbandry orientates the development of industrial farm
animal husbandry, organic breeding and breeding in non-epidemic areas. At the same
time, implementing linkages in animal husbandry are "enterprises with outscouring
farms" and "enterprises with cooperatives and households". There are priority policies for
organic, biosecurity-oriented animal husbandry development in chain production.
At the same time, it is important to continue to adjust the livestock structure to suit
the market associated with the consumption of the domestic market and export. For pig
breeding, it was expected to be adjusted down by 72.7% in 2016 to 68.2% in 2020 and
maintained at 60% to 65% in 2030. Buffalo meat and beef was adjusted up from 8, 3% in

2015 to 8.9% in 2020 and over 10% in 2030. Specifically, adjusting the breed structure of
herds of 60% to 70% is high-yield breeds for public breeding. The rest are indigenous
hybrids and varieties for household production.
For the development of dairy farming, it is necessary to implement agricultural
restructure which are suitable with natural conditions and economics; Promote the
development of self-cultivation dairy farms to grow grass using animal husbandry, use
agricultural and industrial by-products for animal husbandry, reduce environmental
pollution; Applying biotechnology in dairy farming to increase productivity and product
quality of dairy farming.
The Department of Animal Husbandry Development orientation towards in 2030 is
to continue to develop livestock diversely in a sustainable manner, livestock products for
domestic and export needs, focusing on producing marketable products. Large consumer
markets are pork, eggs, poultry and processed products.
3.1.2. Requests to complete accounting of production cost and product cost in
livestock enterprises in the North
The introduction of solutions to improve the accounting of production cost and
product cost in livestock enterprises in Northern Vietnam is an urgent requirement to help
businesses improve the efficiency of the use of resources and improve their ability to
compete, and stand firmly in the market. Therefore, the basic requirements of completing
the accounting of production cost and product cost in the livestock enterprises in
Northern Vietnam are as follows:
Firstly, the completion of accounting of production cost and product cost must
comply with the provisions in the current accounting legal documents such as
Accounting Law, Accounting Standards, and Accounting Policies for Enterprises.
Secondly, solutions to complete accounting of production cost and produt cost
must be suitable with the production characteristics of livestock enterprises.
Thirdly, the complete solutions must ensure the principles of savings and
feasibility. Fourthly, the accounting system of production cost and product cost must
meet the requirements of providing information for both Financial Accounting and
Administrative Accounting.

20

3.2. Solutions to complete the accounting of production cost and product cost in
livestock enterprises in Northern Vietnam
3.2.1. Completing classification of production cost in livestock enterprises in Northern
Vietnam
3.2.1.1. Details in the cost items when classifying production cost in livestock enterprises
by the purpose and utility of costs
3.2.1.2. Completing production cost classification according to IAS 41 orientation
3.2.1.3. Completing cost classification according to cost behavior
3.2.1.4. Completing method of separating mixed costs
3.2.2. Completing the method of determining cost for objects who are subject to
expenses
+ Proposing criteria for allocating general production costs
+ Proposing the distribution of general ABC production cost for livestock
enterprises
3.2.3. Solutions to improve the accounting of production cost and product cost in
livestock enterprises in Northern Vietnam on the perspective of Financial Accounting
3.2.3.1. Completing the initial acquisition of production cost and product price
accounting
+ Time for voucher rotation
+ Design additional accounting vouchers for livestock enterprises
3.2.3.2. Completing processing and systematising of production cost and product cost
information
Firstly, complete accounting accounts
+ Proposing to open a detailed account for the accounts of the costs of direct
materials; the costs of general production; finished products of livestock enterprises
Secondly, completing regconise for production cost and product cost

Proposals in recognition of operations related to the accounting of production cost
and product cost for the items: the cost of direct materials; the cost of direct labours, the
costs of general production are as follows:
+ The part of the cost of direct materials beyond the norm
+ Proposing the recognition of cost and prices for outscouring livestock.
+ Recognizing bonuses in outscouring from previous accounting periods.
+ Recognizing the cost of selling scrap confiscated in livestock.
+ Proposing to build a reward policy for livestock and recognizing the bonus costs
in breeding.
+ Recognizing the value of the new herd of cattle imported according to the right
objects and the "care cost" part of this herd.
+ Record the core value of biological assests due to liquidation, waste and "care
costs" of this herd.
+ Gathering and recognizing the exact objects who are subject to expenses with
the costs of electricity, water and telephone service for breeding activities.
+ Determining and recognising the general production's fee not to be transferred
+ Recognising the value of the initial cattle herd and depreciation value,
depreciation period of the breeding herd.
+ Proposing deductions for setting up price reduction for livestock products.
3.2.3.3. Completing the accounting books of production cost and product cost
+ Proposing to complete the updated book form according to the current
accounting regime


21

+ Proposing to build a system of detailed accounting books in accounting of
production cost product cost
3.2.3.4. Complete the presentation of information on financial statements
+ Proposing the presentation of biological asset information and products obtained

from biological assets for multi-period products oriented to apply IAS 41. When
presenting information on financial statements, the enterprises need to present the
control of changes in book value of biological assets between the beginning and the end
of the period. + In order to implement this solution, livestock enterprises need to have a
roadmap to determine the product quality of biological assets and agricultural products
harvested from biological assets for many periods.
3.2.4. Solutions to complete accounting of production cost and product cost in livestock
enterprises in Northern Vietnam in the aspect of Admistrative Accounting
3.2.4.1. Completing the construction of norms and estimating production cost and
product cost
@ Completing the system of cost norms
+ Proposing to build the vaccine norms for piglets and pigs for meat
+ Proposing to build veterinary drug norms for pregnant sows
@ Complete the estimation system
Enterprises of livestock industry with specific characteristics of livestock products
and industries, so in addition to the basic estimates, it is necessary to make an estimation
of investment in renovating pigs (including sows and meat pigs). Therefore, the author
proposes to establish a "report on the movement of meat pigs" to have a basis for building
norms and cost estimation of industrial enterprises.
3.2.4.2. Completing the methods of calculating product cost in livestock enterprises in
Northern Vietnam
+ Proposing a method of calculating the price of livestock products with subproducts excluded (determining the cost of 1kg of meat weight increase of each herd).
+ Proposing to calculate the price of products for “dual” product of dairy farmings.
3.2.4.3. Completing the contents of analysis and providing information of
production cost and product cost for decision-making
From the evaluation of production costs of livestock enterprises in Northern
Vietnam, it has just been focusing on direct cost assessment. The main method used is the
comparision method on the overall volatility but it has not yet shown influences of each
factor on that fluctuation. The author proposes to analyse the fluctuations in the costs of
direct material, the costs of direct labour, the costs of general production (the fluctuations

in general production‟s costs and in the costs of general production).
3.2.4.5. Completing the final account system to provide information of production
cost and product cost
+ Proposing to build a sammple of the final account to provide information of
production cost and product cost
+ Proposing to build additionally and identify specific analytical criteria of
livestock enterprises on the final account
3.3. Proposing conditions to implement solutions to complete accounting of production
cost and product cost in livestock enterprises of cattle in the Northern Vietnam
3.3.1. For the State and the authorities
The State should build, improve, and reform the legal framework for work and
accounting profession, then, complete the legal framework on accounting in accordance
with the reality of livestock enterprises in Vietnam. Also, accounting practices will


22

probably become popular in the world in accordance with the economic conditions of
market in Vietnam.
The Ministry of Agriculure and the authories should coordinate to impletment and
take care of technical solutions and manage right from the initial stage of research, design
and carry out which help livestock enterprises choose the optimal breeding plan.
3.3.2. For professional associations
- Accounting Association: It is necessary to have opinions to participate in the
State‟s authorities in concretizing and guiding accounting and auditing standards when
developing accounting and auditing regimes and policies ; Organize for training, and
enhancing professional qualifications for accounting and auditing staff, disseminate
policies on financial and accounting and auditing regimes, and information through
scientific and technical achievements in the domestic and foreign financial accounting.
- Pig Breeding Association: The livestock sector at ministerial, provincial and city

levels should develop and issue policies, mechanisms and other legal documents, and
develop and disseminate national standards, programs, topics and projects related to
livestock; have policies to protect legitimate benefits of livestock enterprises.
Additionally, it should organize for training, transferring technology, and disseminating
knowlege about livestock .
3.3.3. For livestock enterprises
- Comply with the enacted accounting regime and strictly follow the instructions;
- The accountants regularly participate in training courses, and improve
qualifications;
- Develop and complete the model of decentralization of management, economic
accounting and evaluation of production and business efficiency.
CONCLUSION OF CHAPTER 3
In chapter 3, the thesis presents the orientation of livestock enterprise development
in the upcometime time along with the requirements of completing the accounting of
production cost and product cost in livestock enterprises in Northern Vietnam. Based on
the rationale and reality, the thesis proposes solutions to complete the accounting of
production cost and product cost in livestock enterprises in Northern Vietnam on the
Finacial Accounting and Administrative Accounting perspectives. Simultaneously, the
thesis has proposed conditions for implementing solutions from the State and authorities,
professional associations and from the enterprises.


23

CONCLUSION
In the current situation of Vietnam, the economy of international economic
integration is deep and wide. Along with the signing, enforcement and negotiation of free
trade agreements, the impact on the economic development of Vietnam in general and the
livestock enterprises in particular has been significantly affected. This has created
opportunities for livestock enterprises such as restructuring livestock industry, applying

technical advances, creating linkages in animal husbandry, expanding consumer markets,
and deeply participating in the supply chain. Global agricultural products, promoting
investment in livestock, policies and institutions change in accordance with international
practices. Along with that, the challenges faced by livestock enterprises are high
livestock production, low productivity, agricultural growth mainly based on natural
resources, environmental management, food safety in animal husbandry affecting product
quality and competitiveness. Science and technology investment in animal husbandry is
low, the team of agricultural workers use in large numbers but not yet strong, lack of
high-level human resources.Faced with these problems, livestock enterprises in Northern
Vietnam need to manage costs and find measures to reduce product cost, maintain firmly
standing in competition, sustainable development, food safety, protection products, and
environmental protection. Therefore, accounting of production cost and product cost are
always concerned by livestock enterprises. For the purposes of researching and
completing the accounting of production cost and product cost in livestock enterprises in
Northern Vietnam, the thesis has achieved some results as follows:
Firstly, the thesis has systematized, analyzed, developed and clarified the basic
theoretical issues of accounting of production cost and product cost in livestock enterprises on
the Financial Accounting and Administrative Accounting as follows: Characteristics of
livestock activities affect accounting of production cost and product cost in the aspect of
Financial Accounting and Administrative Accounting, and accounting of production cost and
product cost of advanced countries and experices for Vietnam.
Secondly, survey, study and evaluate the status of accounting of production cost
and product cost in livestock enterprises in Northern Vietnam in the aspects of Financial
Accounting and Administrative Accounting. It pointed out the results, the limitations, the
causes of limitations.
Thirdly, the thesis proposes solutions to improve the accounting of production cost
and product cost in livestock enterprises on the Financial Accounting and Administrative
Accounting, including the main solutions as follows:
- Complete classification production cost in livestock enterprises in Northern Vietnam;
- Complete the methods of determining costs for objects who are subject to

expenses;
- Complete solutions in the aspect of Financial Accounting: Complete the
reception of initial information on accounting of production cost and product cost;
Complete the processing and systematization of production cost and product cost
information; Complete accounting books of production cost and product cost; Complete
the presentation of information on financial statements;
- Complete solutions in the aspect of Financial Accounting: Complete the
construction of norms and estimation of production cost and product cos; Complete the
methods of calculating production cost and product cost in livestock enterpris es in
Northernn Vietnam; Complete the content of analysis and provision of production cost
and product cost information for decision making; Complete the Final Account System to
provide informationt of production cost and product cost.


24

In order to increase the feasibility of solutions, the thesis has proposed conditions
to implement solutions from the government, professional associations and from the
internal enterprises of livestock enterprises in Northern Vietnam.
During the research and implementation of the thesis due to the confidentiality and
complexity of accounting information, PhD. Student did not receive all the answers as
well as the number of questionnaires issued. Besides, until now there has not been any
intensive research on accounting of production cost and product cost in livestock
enterprises. Moreover, livestock farms operate under the type of small-scale enterprises
leading to limited scope and scale of survey samples. Although, PhD. Student tried very
hard but due to the new nature of accounting of production cost and product cost in
livestock enterprises as well as the Vietnamese accounting regime has not yet issued and
applied separate accounting standards for SOEs. Since then, the thesis cannot avoid
certain limitations.
PhD. Student hopes that the research results of the thesis will contribute to

supplementing, developing and completing the theoretical contents of accounting of
production cost and product cost under the Financial Accounting and Administrative
Accounting perspectives. Simultaneously, it is a reference in studying and researching in
accounting of production cost and product cost in SOEs in general and livestock
enterprises in particular.
PhD. Student would like to thank the dedicated help of supervisors, valuable
comments of scientists and those who are interested in the contents of the thesis research!