ON 1 JUNE 2011, AV CO BORROWED VND5,000 MILLION AT AN INTEREST RATE...

3. On 1 June 2011, AV Co borrowed VND5,000 million at an interest rate of 18% per annum from a commercialbank to contribute to the legal capital of AX Ltd, a wholly owned subsidiary of AV Co. In its financial statements,AV Co recognised an interest expense of VND750 million, being ten months interest on the loan, but theaccountant has adjusted this expense as the bank had not yet issued an invoice to AV Co at the time he preparedthe draft CIT return. The invoice has now been received by AV Co.