Chương III Thông tư 23/2023/TT-BTC: Nguyên giá, hao mòn, khấu hao, giá trị còn lại của tài sản cố định

Chapter III

HISTORICAL COST, DEPRECIATION AND RESIDUAL VALUE OF FIXED ASSET

Article 6. Determination of historical costs of tangible fixed assets

Historical costs of tangible fixed assets specified in point a, Clause 1, Article 4 hereof (except for special fixed assets specified in point c, Clause 1, Article 4 hereof) shall be determined as follows:

1. The historical cost of a fixed asset formed from procurement is determined according to the following formula:

Historical cost of a fixed asset formed from procurement equals (=) (Price on invoice - Discounts or reductions or charges imposed on sellers (if any)) plus (+) (Costs of transport, loading, installation and test run minus (-) Revenues from products and refuses during test run) plus (+) Taxes (exclusive of tax deduction, tax refunds), other fees and charges according to the regulations on fees and charges plus (+) Other costs (if any).

Where:

a) Discounts or fines imposed on sellers (if any) may only be deducted from the value on the invoice if the value on invoice includes such discounts or fines.

b) Other costs (if any) are reasonable costs related to the procurement of fixed assets. They are paid by agencies, organizations, units or enterprises before these fixed assets are put into use (including costs for bidding covered by funds that are not revenues from bidding according to regulations of law).  In case a general cost involves multiple fixed assets, the agency, organization, unit or enterprise shall distribute the cost among the assets according to appropriate criteria (quantity and value on their invoices).

2. The historical cost of a fixed asset formed from the investment in construction is the recorded value approved by a competent authority or a competent person in accordance with the regulation on construction investment. Some special cases:

a) If an asset is put into use (after the completion of investment in construction) without the recorded value approved by a competent agency or a competent person, it shall be recorded as a fixed asset into the accounting book by the agency, organization, unit or enterprise from the date on which the asset is accepted and handed over, and then it is put into use.  The historical cost recorded in the accounting book is the temporarily calculated historical cost. The temporarily calculated historical cost in this case is selected according to the following priority order:

- Recorded value;

- Value determined according to the Acceptance Record A-B;

- Total investment or estimated value of the project that has been approved or estimated value of the project that has been recently adjusted (if the project cost estimate is adjusted)

If the recorded value is approved by a competent agency or a competent person, the agency, organization, unit or enterprise shall modify the temporarily calculated historical cost according to the recorded value which is approved to adjust modify the accounting book and apply accounting according to regulations.

b) If the project includes multiple different items or assets (entities to be recorded as fixed assets in the accounting book) which are not estimated and recorded respectively, the value estimated and recorded by a competent agency or a competent person shall be allocated for each item or asset so that such value will be recorded in the accounting book according to an appropriate standard (area, specific quantity of each asset or item).

If the project includes multiple different items or assets (entities to be recorded as fixed assets in the accounting book) which are estimated but not recorded, the value recorded by a competent agency or a competent person shall be allocated for each item or asset in order that such value will be recorded in the accounting book according to an appropriate standard (area, quantity and specific estimated value of each asset or item).

c) If the project includes multiple different items or assets (entities to be recorded as fixed assets in the accounting book) which are invested and accepted respectively, items or assets whose investment in construction is completed and which are accepted and handed over shall be recorded the accounting book from the date in which such items or assets are handed over.

d) If it is required to adjust the recorded value under recommendations and conclusions of the competent authority after inspection and audit, the agency, organization, unit or enterprise shall adjust the historical cost according to the recorded value after it is adjusted under recommendations and conclusions of the competent authority.

3. The historical cost of a fixed asset, which is provided or transferred, shall be determined as follows:

Historical cost of the provided or transferred fixed asset equals (=) cost stated in the record on transfer and receipt of assets plus (+) (Costs of transport, loading, installation and test run minus (-) Revenues from products and refuses during test run) plus (+) fees and charges according to the regulations on fees and charges plus (+) Other costs (if any)

Where:

a) Historical cost stated in the record on transfer and receipt of asset shall be determined as follows:

a.1) If the asset has been recorded in the accounting book, the historical cost in the record on transfer and receipt of the asset is the historical cost of a fixed asset which has been recorded in the accounting book of the agency, organization, unit or enterprise that owns the transferred or assigned asset.

The agency, organization, unit or enterprise that owns the transferred asset or is assigned to make a plan to handle the asset shall revaluate such asset and the remaining depreciation period (for asset which is not recorded in the accounting book) before reporting its value to a competent agency or a competent person that can make the decision to provide and transfer such asset. Where:

- If the transferred or assigned asset is a fixed asset at the agency, organization, unit or enterprise specified in Clause 1 Article 2 of this Circular and it is not recorded in the accounting book, the re-evaluation of the value of such asset shall comply with regulations in Points a.2, a.3 and a.4 of this Clause.

- If the transferred or assigned asset is not a fixed asset at the agency, organization, unit or enterprise specified in Clause 1 Article 2 of this Circular, the re-evaluation of the value of such asset shall comply with regulations of relevant laws.

a.2) If the asset has not been recorded in the accounting book but there is a dossier to determine the purchase price or construction price of the asset and the time when the asset is put into use, the historical cost in the record on transfer and receipt of the asset shall be determined according to regulations in Clauses 1 and 2 of this Article.

a.3) If the asset has not been recorded in the accounting book, and there is not a dossier to determine the purchase price or construction price of the asset but there are grounds for determination of the time when the asset is put into use and the purchase price of the new and similar asset of or the construction price of the new asset with the similar technical standard at the time in which the asset is put into use, the historical cost in the record on transfer and receipt of the asset shall be determined according to the following formula.

Where:

- The purchase price of the new and similar asset which is applied to the asset other than building, construction or architectural structure is the price of the new and similar asset that is being sold in market at the time in which the asset is put into use.

- The construction price of the new asset with the similar technical standard which is applied to building, construction or architectural structure (including the building, construction or architectural structure formed from procurement) shall be determined according to the following formula:

a.4) If the asset has not been recorded in the accounting book and there is not any ground for determination of the historical cost of the fixed asset according to regulations in Points a.2 and a.3 of this Clause, the agency, organization, unit or enterprise that owns the asset or is assigned to make a plan to handle the asset shall hire an organization eligible for valuation to revaluate the residual value of such asset and the remaining depreciation period in order to determine the historical cost in the record on transfer and receipt of the asset according to the following formula:

The depreciation period of the similar asset shall be determined according to regulations in Appendix No. 01 issued together with this Circular, regulations of ministers, heads of central agencies, the provincial-level People's Committees as prescribed at point a, Clause 1, Article 13 of this Circular.

b) Other costs (if any) are reasonable costs related to the receipt of fixed assets which are provided or transferred. They are paid by the receiving agencies, organizations, units or enterprises before the fixed assets are put into use.  If a general cost involves multiple fixed assets, it shall be distributed among the assets according to appropriate criteria (quantity and value)

4. The historical cost of a fixed asset, which is giveaway or promotional product, is determined as follows:

Where:

a) Value of an asset which is giveaway is determined according to the regulation on assets under ownership of the public and handling of such assets.

b) Value of a promoted asset is determined by the agencies, organizations, units or enterprises that receive such asset, based on the market price of the similar asset or the asset which has similar technical standards or similar origin.

c) Other costs (if any) are reasonable costs related to the receipt of fixed assets that are giveaways or promotional products. Such costs are paid by the receiving agency, organization, unit or enterprise before the fixed assets are put into use. If a general cost involves multiple fixed assets, it shall be distributed among the assets according to appropriate criteria (quantity and value)

5. The historical cost of a fixed asset, which is detected as an extra asset, is determined as follows:

Where:

a) Historical cost stated in the stocktaking record shall be determined as follows:  

a.1) If there is a dossier to determine the purchase price or construction price of the asset and the time when the asset is put into use, the historical cost in the stocktaking record shall be determined according to regulations in Clauses 1 and 2 of this Article.

a.2) If there is not a dossier to determine the purchase price or construction price of the asset but there are grounds for determination of the time when the asset is put into use and the purchase price of the new and similar asset or the construction price of the new asset with the similar technical standard at the time in which the asset is put into use, the historical cost in the stocktaking record shall be determined according to the following formula.

Where:

- The purchase price of the new and similar asset which is applied to the asset other than building, construction or architectural structure is the price of the new and similar asset that is being sold in market at the time in which the asset is put into use.

- The construction price of the new asset with the similar technical standard which is applied to building, construction or architectural structure (including the building, construction or architectural structure formed from procurement) shall be determined according to the following formula:

a.3) If there is not any ground for determination of the historical cost of the fixed asset according to regulations in Points a.1 and a.2 of this Clause, the agency, organization, unit or enterprise that owns the asset shall hire an organization eligible for valuation to revaluate the residual value of such asset and the remaining depreciation period in order to determine the historical cost in the stocktaking record according to the following formula:

The depreciation period of the similar asset shall be determined according to regulations in Appendix No. 01 issued together with this Circular, regulations of ministers, heads of central agencies, the provincial-level People's Committees as prescribed at point a, Clause 1, Article 13 of this Circular.

b) Other costs (if any) are reasonable costs that the agencies, organizations, units or enterprises have paid during the process of stocktaking, determination of the historical cost, the residual value of fixed assets for the purpose of recording in the accounting book (including the cost of hiring an organization eligible for valuation with a view to revaluating the residual value, and the remaining depreciation period of such assets as prescribed at Point a.3 of this Clause) If a general cost involves multiple fixed assets, it shall be distributed among the assets according to appropriate criteria (quantity and value)

6. If the public service provider performs joint venture or association in the form of establishment of new legal entity, the historical cost of the fixed asset that the public service provider can receive after expiration of the duration of joint venture or association specified in Clause 6 Article 47 of Decree No. 151/2017/ND-CP shall be determined as follows:

a) If the asset of the public service provider is divided in kind, the historical cost of a fixed asset is the historical cost of the fixed asset which is recorded in the accounting book of the legal entity established form joint venture or association.

If the fixed asset is not recorded in the accounting book of the legal entity established from joint venture or association, the public service provider shall hire an organization eligible for valuation to revaluate the residual value and the remaining depreciation period of the asset in order to determine the historical cost of the fixed asset according to the following formula:

The depreciation period of the similar asset shall be determined according to regulations in Appendix No. 01 issued together with this Circular, regulations of ministers, heads of central agencies, the provincial-level People's Committees as prescribed at point a, Clause 1, Article 13 of this Circular.

b) If the asset is tangible and indivisible and the public service provider repurchases the asset of its partner, the legal entity established from joint venture or association shall hire an organization eligible for valuation to revaluate the residual value of such asset according to market price (as the basis for determination of the repurposing price of the partner’s asset) and the remaining depreciation period of the asset, thereby determining the historical cost of the fixed asset according to the following formula:

The depreciation period of the similar asset shall be determined according to regulations in Appendix No. 01 issued together with this Circular, regulations of ministers, heads of central agencies, the provincial-level People's Committees as prescribed at point a, Clause 1, Article 13 of this Circular.

c) If the partner voluntarily transfers ownership of its asset without reimbursement to the State and the transferee for management and use, the historical cost of the fixed asset shall be determined in the similar way to the historical cost of the asset of the public service provider that is divided in kind according to regulations in Point a of this Clause.

7. If the public service provider performs joint venture or association without establishment of new legal entity and the parties which participate in joint venture or association contribute their assets or their capital to investment in construction or procurement of assets for the purpose of joint venture or association, the historical cost of the fixed asset that the public service provider receives after expiration of the duration of joint venture or association according to regulations in Clause 6 Article 47 of Decree No. 151/2017/ND-CP shall be determined as follows:

a) If the public service provider contributes its asset

a.1) With regard to an asset contributed to joint venture or association by the public service provider, the public service provider shall continue to use the historical cost recorded in the accounting book for the purpose of accounting of the fixed asset during the duration for joint venture or association and after expiration of the duration of joint venture or association.

a.2) With a fixed asset formed during the process of joint venture or association, the public service provider is not required to apply accounting. When the duration of joint venture or association expires, the historical cost of the fixed asset of the public service provider shall be determined according to regulations in Point b of this Clause.

b) If the public service provider and the parties participating in joint venture or association contribute their capital to investment in construction or procurement of assets for the purpose of joint venture or association, during the time of joint venture or association, the public service provider is not required to apply accounting to the fixed asset form from the process of joint venture or association but the public service provider shall monitor such asset. When the duration of joint venture or association expires, the historical cost of the fixed asset of the public service provider shall be determined as follows:

b.1) If the asset of the public service provider is divided in kind, the historical cost of the fixed asset shall be determined according to the following formula:

Other costs (if any) are reasonable costs related to the receipt of fixed assets. Such costs are paid by the public service provider before the fixed asset are put into use. If a general cost involves multiple fixed assets, it shall be distributed by the public service provider among the fixed asset according to appropriate criteria (quantity and value).

b.2) If the non-monetary asset cannot be divided and the joint-venture or association contract specifies that the public service provider must pay the price according to market price to the partner when repurchasing the partner's asset, the public service provider and the partner shall reach an agreement on hiring an organization eligible for valuation to revaluate the residual value of such asset according to market price (as the basis for determination of the repurposing price of the partner’s asset) and the remaining depreciation period of the asset, thereby determining the historical cost of the fixed asset according to the following formula:

The depreciation period of the similar asset shall be determined according to regulations in Appendix No. 01 issued together with this Circular, regulations of ministers, heads of central agencies, the provincial-level People's Committees as prescribed at point a, Clause 1, Article 13 of this Circular.

b.3) If the non-monetary asset cannot be divided and the partner voluntarily transfers ownership of its asset without reimbursement to the State and the transferee for management and use, the historical cost of the fixed asset shall be determined in the similar way to the historical cost of the asset of the public service provider that is divided in kind according to regulations in Point b.1 of this Clause.

Article 7. Determination of historical costs of intangible fixed assets

Historical costs of the intangible fixed assets specified in point b, clause 1, Article 4 hereof (except for special fixed assets specified in Point c Clause 1 Article 4 hereof) shall be determined as follows:

1. The historical cost of an intangible fixed asset that is the land use right shall be determined as follows:

a) The historical cost of an intangible fixed asset is the land use right. In certain cases, the value of such right shall be determined to include in the value of asset as specified in Clause 1 Article 100 of the Government's Decree No. 151/2017/ND-CP. The value of the land use right is determined according to Clauses 1, 2 and 3 of Article 102 of the Decree No. 151/2017/ND-CP plus (+) taxes (exclusive of tax deduction, tax refund) and other fees and charges specified in the law on fees and charges.

b) The historical cost of an intangible fixed asset is the right to use the land from the State. The lump sum land rent for the entire lease term is paid according to the law on land. The payment for such rent shall not be derived from state budget. The right to use the land is transferred to the agencies, organizations, units or enterprises. The sum of money received from the transfer of such right shall not be derived from state budget; it is the lump sum land payment for the entire lease term. The formula is: such sum of money plus (+) compensation cost or land clearance. This formula is applicable to the cases where the investor leases a land from the state and pays for the lump sum land rent for the entire lease term (if any, and for the cases where the compensation cost and land clearance cost are not included in the project investment cost and business production cost or are not approved to be deducted from the land rent by a competent agency or a competent person).

2. The historical cost of intangible fixed asset formed from investment or procurement is determined as the entire cost paid by the agency, organization, unit or enterprise for possession of such asset.  With regard to land use right obtained from the receipt of transfer, the historical cost of the fixed asset shall be determined according to regulations in Clause 1 of this Article.  In case an intangible fixed asset is formed through an investment project without the recorded value approved by a competent agency or a competent person and it is required to adjust the recorded value under recommendations and conclusions of the competent authority after inspection and audit, the determination and adjustment in the historical cost of the intangible fixed asset shall comply with regulations in Clause 2 Article 6 of this Circular.

3. The historical cost of an intangible fixed asset, which is provided or transferred, shall be determined as follows:

Where:

a) Historical cost stated in the record on transfer and receipt of asset shall be determined as follows:

a.1) With regard to an asset that has been recorded in the accounting book, the historical cost in the record on transfer and receipt of the asset is the historical cost of a fixed asset which has been recorded in the accounting book of the agency, organization, unit or enterprise that owns the transferred or assigned asset.

The agency, organization, unit or enterprise that owns the transferred or assigned asset shall revaluate such asset and the remaining depreciation period (for asset which is not recorded in the accounting book) before reporting its value to a competent agency or a competent person that can make the decision to provide and transfer such asset. Where:

- If the transferred or assigned asset is the land use right, the historical cost in the record on transfer and receipt of the asset shall be determined according to regulations in Clause 1 of this Article.

- If the transferred or assigned asset is an intangible fixed asset (except for land use right) at the agency, organization, unit or enterprise specified in Clause 1 Article 2 of this Circular and it is not recorded in the accounting book, the re-evaluation of the value of such asset shall comply with regulations in Points a.2 and a.3 of this Clause.

- If the transferred or assigned asset is not the land use right or an intangible fixed asset at the agency, organization, unit or enterprise specified in Clause 1 Article 2 of this Circular, the re-evaluation of the value of such asset shall comply with regulations of relevant laws.

a.2) If the asset has not been recorded in the accounting book but there are grounds (documents or invoices) for determination of costs for formation of the intangible fixed asset, the historical cost in the record on transfer and receipt of the asset shall be the entire costs for formation of the intangible fixed asset

a.3) If the asset has not been recorded in the accounting book and there is not any ground (documents or invoices) for determination of the cost for formation of the intangible fixed asset, the agency, organization, unit or enterprise that owns the asset or is assigned to make a plan to handle the asset shall hire an organization eligible for valuation to revaluate the residual value and the remaining depreciation period of the asset in order to determine the historical cost in the record on transfer and receipt of the asset according to the following formula:

The depreciation period of the asset shall be determined according to regulations of ministers, heads of central agencies, the provincial-level People's Committees as prescribed at Clause 2, Article 13 of this Circular.

b) Other costs (if any) are reasonable costs related to the receipt of fixed assets which are provided or transferred. They are paid by the receiving agencies, organizations, units or enterprises before the fixed assets are put into use.  If a general cost involves multiple fixed assets, it shall be distributed among the assets according to appropriate criteria (quantity and value)

4. The historical cost of an intangible fixed asset, which is giveaway or promotional product, is determined as follows:

Where:

a) Value of an asset which is giveaway or promotional product is determined according to the regulation on assets under ownership of the public and handling of such assets.

b) Value of a promoted asset is determined by the agency, organization, unit or enterprise that receives such asset according to the market price at the time of promotion.

c) Other costs (if any) are reasonable costs related to the receipt of fixed assets which are giveaways or promotional products. Such costs are paid by the receiving agency, organization, unit or enterprise before the fixed assets are put into use. If a general cost involves multiple fixed assets, it shall be distributed among the assets according to appropriate criteria (quantity and value)

5. The historical cost of an intangible fixed asset, which is detected as an extra asset, is determined as follows:

Where:

a) Historical cost stated in the stocktaking record shall be determined as follows:

a.1) If the intangible fixed asset is the land use right, the historical cost in the stocktaking record shall be determined according to regulations in Clause 1 of this Article.

a.2) Other intangible fixed assets (except for land use right)

- If there are grounds (documents or invoices) for determination of costs for formation of the intangible fixed asset, the historical cost in the stocktaking record shall be the entire costs for formation of such intangible fixed asset

- If there is not any ground (documents or invoices) for determination of the cost for formation of the intangible fixed asset, the agency, organization, unit or enterprise that owns the asset shall hire an organization eligible for valuation to revaluate the residual value and the remaining depreciation period of the asset in order to determine the historical cost in the stocktaking record according to the following formula:

The depreciation period of the asset shall be determined according to regulations of ministers, heads of central agencies, the provincial-level People's Committees as prescribed at Clause 2, Article 13 of this Circular.

b) Other costs (if any) are reasonable costs that the agencies, organizations, units or enterprises have paid during the process of stocktaking, determination of the historical cost, the residual value of fixed assets for the purpose of recording in the accounting book (including the cost of hiring an organization eligible for valuation with a view to revaluating the residual value, and the remaining depreciation period of the asset as prescribed at Point a.2 of this Clause) If a general cost involves multiple fixed assets, it shall be distributed among the assets according to appropriate criteria (quantity and value)

Article 8. Determination of historical costs of special fixed assets

Historical costs of special fixed assets specified in Point c Clause 1 Article 4 of this Circular shall be determined according to conventional value.  The conventional value of a special fixed asset is VND 10.000.000.

Article 9. Changes of historical costs of fixed assets

1. The historical cost of a fixed asset shall be changed in the following cases:

a) The value of fixed asset is revaluated according to the decision of the Prime Minister.

b) The fixed asset is upgraded and expanded according to the project approved by a competent agency or a competent person.

c) One or certain parts of the fixed asset are dismantled (in case the value of the fixed asset that has been dismantled is recorded in the historical cost of the fixed asset).

d) One or certain parts of the fixed asset are installed.

dd) The fixed asset is partially lost or seriously damaged due to natural disasters, force majeure events or other unexpected impacts (except where the asset has been restored through public property insurance).

e) The value of land use right is adjusted in the cases specified in Point a, Clause 1, Article 7 hereof and according to the regulations in Points a, b and c Clause 1, Article 103 of the Decree No. 151/2017/ND-CP.

2. If there is change of the historical cost of a fixed asset in cases specified in Points a,b,c, d and dd Clause 1 of this Article, the agency, organization, unit or enterprise shall make a record that specifies clear explanations about such change and the historical cost of the fixed asset before and after change. If there is change of the historical cost of a fixed asset in case specified in Point e Clause 1 of this Article, the agency, organization, unit or enterprise shall make a record according to regulations in Clause 2 Article 103 of Decree No. 151/2017/ND-CP. At the same time, they shall re-establish the standard for the historical cost of the fixed asset as the basis for determination of depreciation, the residual value of such asset in order to modify the accounting book and apply accounting according to regulations of this Circular.

Article 10. Determination of historical costs of fixed assets in case of change of such historical costs

1. In case of re-evaluation of the value of a fixed asset during the process of stocktaking according to the decision of the Prime Minister specified at Point a, Clause 1, Article 9 of this Circular, the historical cost of the fixed asset shall be re-determined according to instructions of an agency or a person that has competency in stocktaking and re-evaluation.

2. In case of upgradation or expansion of a fixed asset according to the project approved by a competent agency or person specified at Point b, Clause 1, Article 9 of this Circular, the historical cost of the fixed asset shall be determined according to the formula: the historical cost of the asset equals (=) the historical cost that is recorded plus (+) the added value due to upgradation and expansion of the fixed asset. The added value due to the upgradation and expansion of the fixed asset is the recorded value approved by a competent agency or person in accordance with regulations of the law on investment, the law on construction and relevant laws.

3. In case of dismantlement of one or several parts of the fixed asset specified at Point c, Clause 1, Article 9 of this Circular, the historical cost of the fixed asset shall be re-determined according to the formula: the historical cost of the fixed asset equals (=) the historical cost that is recorded minus ( -) the value of the dismantled part of the fixed asset plus (+) reasonable costs related to the dismantlement paid by the agency, organization, unit or enterprise until the time of completion of the dismantlement.

The value of the dismantled part of the fixed asset shall be determined as follows:

a) If there is a dossier to determine the purchase price, recorded value/estimated value of the dismantled part of the fixed asset, the value of the dismantled part of the fixed asset shall be determined according to the purchase price, the recorded value/estimated value of the dismantled part of such fixed asset.

b) If there is not any dossier specified in point a of this Clause but it is possible to distribute the historical cost of the fixed asset to the dismantled part of the fixed asset according to the appropriate criteria (the area, quantity, purchase price, estimated value…), the value of the dismantled part of such fixed asset shall be determined according to the distributed value.

c) If there is not any dossier specified in point a of this Clause and it is impossible to distribute the historical cost of the fixed asset to the dismantled part of the fixed asset according to point b of this Clause, the value of the dismantled part of the fixed asset shall be the purchase price of the new part of the fixed asset in market at the time in which the asset is put into use.

If it is impossible to determine the purchase price of the new part of the fixed asset in market at the time in which the asset is put into use, the agency, organization, unit or enterprise that owns the asset shall hire an organization eligible for valuation to determinate the value of the dismantled part of the fixed asset as the basis for determination of the historical cost of the fixed asset after dismantlement.

4. In case of installation of one or several parts of the fixed asset specified at Point d, Clause 1, Article 9 of this Circular, the historical cost of the fixed asset shall be re-determined according to the formula: the historical cost of the fixed asset equals (=) the historical cost that is recorded minus plus (+) the added value due to installation of one or several parts of the fixed asset plus (+) reasonable costs related to the installation paid by the agency, organization, unit or enterprise until the time of completion of the installation.

The added value due to installation of one or several parts of the fixed asset is the equivalent value of the installed part of the fixed asset, which is determined according to cases specified in Article 6 of this Circular.

5. With regard to a fixed asset which is partially lost or seriously damaged due to natural disasters, force majeure events or other unexpected impacts specified in point dd Clause 1 Article 9 of this Circular, the agency, organization, unit or enterprise that owns the asset shall hire an organization eligible for valuation to revaluate such asset and the remaining depreciation period of the asset to state in the record of change of the historical cost of the fixed asset.  The historical cost of the fixed asset in this case is the value of the fixed asset according to revaluation.

6. In case of adjustment in the value of land use right specified in point e Clause 1 Article 9 of this Circular, the historical cost of the asset shall be re-determined according to the formula: the historical cost of the asset equals (=) the value of the land use right, which is determined according to Clauses 1, 2 and 3 of Article 102 of Decree No. 151/2017/ND-CP under indicators (land price, the area, land use purpose) after change plus (+) taxes (exclusive of tax deduction, tax refund) and other fees and charges specified in the law on fees and charges.

Article 11. Scope of depreciation calculation of fixed assets

1. The current fixed assets of agencies, organizations and units and the fixed assets provided to the enterprises by the State without calculation of the state capital portion shall be calculated for their depreciation, except for cases specified in Clause 2, 3 and 4 of this Article.

2. Fixed assets of public service providers shall be depreciated, including:

a) Fixed assets of public service providers that have guaranteed recurrent expenditure and investment expenses.

b) Fixed assets of public service providers which require its depreciation to be included in the service price according to the law.

c) Fixed assets of public service providers which are not specified in points a and b of this Clause shall be used in business, lease, joint venture and association without establishment of new legal entity according to regulations of law.

3. It is not required to calculate the depreciation of the following assets:

a) Fixed assets are the land use rights which must be determined to be included in the value of such assets as specified in Article 100 of the Decree No. 151/2017/ND-CP.

b) Special fixed assets specified in Point c, Clause 1 Article 5 hereof.

c) Fixed assets that are still usable after their depreciation is being fully calculated or their costs are being completely depreciated (including fixed assets that public service providers can receive after expiration of the duration of joint venture or association).

d) Fixed assets that are not usable though their depreciation is not fully calculated and their costs are not completely depreciated.

4. With regard to a fixed asset which is brand of a public service provider and is used in joint venture and association, the brand value of the public service provider for capital contribution to joint venture or association expense shall be allocated to joint venture or association expense every year according to regulations in Clause 3 Article 15 of this Circular.

Article 12. Rules for calculating depreciation of fixed assets

1. Rules for calculating depreciation of fixed assets

a) The depreciation of fixed assets shall be calculated once every year in December before the accounting book is closed

b) The depreciation of the fixed assets specified in point c, Clause 2, Article 11 hereof shall be calculated and such assets shall also be depreciated according to the regulations in Article 15 hereof.

c) The depreciation of the fixed asset that the agency, organization, unit or enterprise can receive from another agency, organization, unit or enterprise according to the decision of a competent agency or person in a year shall be calculated at the receiving agency, organization, unit or enterprise in such year.

2. Rules for depreciating fixed assets

a) Rules for depreciating the fixed assets specified in points a and b, Clause 2 and Article 11 hereof shall be applied in accordance with regulations for enterprises.

b) With regard to the fixed assets specified in point c, Clause 2, Article 11 hereof, the depreciation shall be carried out from the date on which such assets are put into use in the following activities: business, lease, joint venture and association. The depreciation of such assets shall be stopped after the date on which such assets stop being used for the above activities.

c) The depreciation cost shall be allocated for each professional activity, business, lease, joint venture or association in order to record the cost of each corresponding activity.

Article 13. Depreciation period and rate of fixed assets

1. The depreciation period and rate of tangible fixed assets shall be determined according to the regulations in Appendix 01 hereto, except for the following cases:

a) If the tangible fixed assets are used in the area where the weather and environmental conditions can affect their depreciation, in necessary cases, the depreciation period and rate of such assets shall be stipulated differently from the regulations in Appendix 01 hereto. Ministers, Heads of central agencies and the People's Committees of provinces shall provide specific regulations on such depreciation period and rate.  The depreciation rate shall not be adjusted for more than or less than 20% of the depreciation rate specified in Appendix 01 hereto.

b) In case of a fixed asset whose historical cost is changed and which is upgraded and expanded according to the project approved by a competent agency or person specified at Point b, Clause 1, Article 9 of this Circular, the depreciation period of the fixed asset equals (=) the actual period which the asset is used before change (+) the remaining depreciation period of the fixed asset after upgradation and expansion. The remaining depreciation period of the fixed asset after upgradation and expansion shall be determined according to the following formula:

Remaining depreciation period of the fixed asset after upgradation and expansion equals (=) (the historical cost of the fixed asset after change minus (-) the accumulated depreciation, the depreciation deducted of the fixed asset calculated as at December 31 of the year in which the historical cost is changed) divided by (:) the annual depreciation expense of the fixed asset from the year in which the historical cost is changed, which is determined according to regulations in Point a, Clause 6 Article 14 of this Circular.

c) In case of a fixed asset whose historical cost is changed and which is partially lost or seriously damaged due to natural disasters, force majeure events or other unexpected impacts specified at Point dd, Clause 1, Article 9 of this Circular, the depreciation period of the fixed asset equals (=) the actual period which the asset is used before change (+) the remaining depreciation period of the fixed asset according to revaluation.

d) Regarding a fixed asset whose historical cost is adjusted or changed according to regulations in Points a and d Clause 2 Article 6 and Points c and d Clause 1 Article 9 of this Circular:

d.1) If the historical cost of the fixed asset is adjusted or changed before it is fully depreciated, this fixed asset shall be depreciated until the year in which its residual value by December 31 of the preceding year is smaller than or equal to the annual depreciation expense.

d.2) If the historical cost of the fixed asset is adjusted or changed after the asset has been fully depreciated, 01 year (the year in which the historical cost of the fixed asset is adjusted or changed) shall be added to the depreciation period in order to settle any increase or decrease in asset's value due to change or adjustment of the historical cost.

2. Ministers, heads of central agencies and the People's Committees of provinces shall elaborate the list, the depreciation period and rate of intangible fixed assets (except for brands of public service providers) under management by ministries, central agencies and localities (according to Form No. 01 specified in Appendix 02 issued with this Circular).

The depreciation period of an intangible fixed asset shall not be less than 04 years and more than 50 years.

In necessary cases where the depreciation period of an intangible fixed asset shall be specified as less than 04 years, Ministers, Heads of central agencies and the People's Committee of province shall provide specific regulations after receiving the agreement from the related Administrative Ministry.

Article 14. Methods for calculating the depreciation of fixed assets

1. The annual depreciation expense of each fixed asset (except for cases specified in Clauses 2,3,4,5,6 and 7 of this Article) shall be determined according to the following formula:

The depreciation rate shall be determined according to regulations in Appendix No. 01 issued together with this Circular, regulations of ministers, heads of central agencies, the provincial-level People's Committees as prescribed at point a, Clauses 1 and 2, Article 13 of this Circular.

2. In case of the transferred asset specified in Clause 3 Article 6 and Clause 3 Article 7 of this Circular, the depreciation of such fixed asset shall be determined as follows:

a) The agency, organization, unit or enterprise that owns the transferred asset or is assigned to make a plan to handle the asset shall calculate the depreciation of the fixed asset until the year in which the decision on provision or transfer of the asset is submitted to the competent agency or person in order to determine the residual value of the transferred or assigned asset. To be specific:

a.1) With regard to cases specified at Point a.1 Clause 3 Article 6, Point a.1 Clause 3 Article 7 of this Circular, the annual depreciation expense of the asset shall be determined according to the formula specified in Clause 1 of this Article; the accumulated depreciation shall be determined according to the formula specified in Clause 8 of this Article;

a.2) With regard to cases specified at Point a.2, Point a.3 Clause 3 Article 6, Point a.2 Clause 3 Article 7 of this Circular, the depreciation expense which is also the accumulated depreciation of the asset, calculated until the year in which the decision on provision or transfer of the asset is submitted to the competent agency or person shall be determined according to the formula:

Depreciation expense of the fixed asset equals (=) annual depreciation expense of the fixed asset, which is determined by the formula according to regulations in Clause 1 of this Article multiplied by (X) (depreciation period of the similar asset according to regulations (year) minus (-) remaining depreciation period of the asset according to regulations (year) or remaining depreciation period of the asset according to revaluation (year))

The depreciation period of the similar asset shall be determined according to regulations in Appendix No. 01 issued together with this Circular, regulations of ministers, heads of central agencies, the provincial-level People's Committees as prescribed at point a, Clauses 1 and 2, Article 13 of this Circular.

a.3) With regard to cases specified at Point a.4, Clause 3 Article 6, Point a.3 Clause 3 Article 7 of this Circular, the depreciation expense which is also accumulated depreciation of the asset, calculated until the year in which the decision on provision or transfer of the asset is submitted to the competent agency or person shall be determined according to the formula:

a.4) If the year in which the fixed asset is assigned or transferred is not the year in which the decision on assignment or transfer of the fixed asset is submitted to a competent agency or person, the agency, organization, unit or enterprise to which the asset is transferred or is assigned to make a plan to handle the asset shall add to the asset receipt record the depreciation accrued over the period from the year in which the decision on provision or transfer of the fixed asset is submitted to a competent agency or person to the year in which the asset is transferred or assigned The depreciation expense of a year shall be determined by the formula specified in Clause 1 of this Article.

b) The agency, organization, unit or enterprise that receives the transferred or assigned asset shall calculate the depreciation of such asset from the year in which the asset is received and put into use. The annual depreciation expense of the asset shall be determined by the formula specified in Clause 1 of this Article.

3. With regard to a fixed asset, which is detected as an extra asset specified in Clause 5 Article 6, Clause 5 Article 7 of this Circular, the annual depreciation expense of the asset from the first year in which the asset is recorded in the accounting book at the agency, organization, unit or enterprise shall be determined according to formula specified in Clause 1 of this Article.

In the first year in which the asset is recorded in the accounting book at the agency, organization, unit or enterprise (the year in which the asset is detected as an extra asset), the depreciation expense of the asset shall be determined as follows:

Depreciation expense of the first year in which the asset is recorded in the accounting book equals (=) annual depreciation expense of the fixed asset, which is determined by the formula specified in Clause 1 of this Article multiplied by (X) (depreciation period of the similar asset according to regulations (year) minus (-) remaining depreciation period of the asset according to regulations (year) or remaining depreciation period of the asset according to revaluation (year))

The depreciation period of the similar asset shall be determined according to regulations in Appendix No. 01 issued together with this Circular, regulations of ministers, heads of central agencies, the provincial-level People's Committees as prescribed at point a, Clauses 1 and 2, Article 13 of this Circular.

4. With regard to a fixed asset that the public service provider can receive after expiration of the duration of joint venture or association in the form of establishment of new legal entity, a fixed asset contributed to joint venture or association by the public service provider and a fixed asset formed in the process of joint venture or association without establishment of new legal entity specified in Clauses 6 and 7 Article 6 of this Circular, the annual depreciation expense of the fixed asset from the first year in which the asset is recorded in the accounting book at the public service provider (after the year in which the joint venture or association expires) shall be determined by the formula specified in Clause 1 of this Article.

In the first year in which the asset is recorded in the accounting book at the agency, organization, unit or enterprise, the depreciation expense of the asset shall be determined as follows:

Depreciation expense in the first year in which the asset is recorded in the accounting book equals (=) annual depreciation expense of the fixed asset, which is determined by the formula specified in Clause 1 of this Article multiplied by (X) (the depreciation period of the similar asset according to regulations (year) minus (–) the remaining depreciation period of the asset revaluation (year)) minus (-) the accumulated depreciation, the depreciation deducted of the fixed asset at the public service provider (if any)

The depreciation period of the similar asset shall be determined according to regulations in Appendix No. 01 issued together with this Circular, regulations of ministers, heads of central agencies, the provincial-level People's Committees as prescribed at point a, Clauses 1 and 2, Article 13 of this Circular.

5. In case of a fixed asset whose historical cost is changed and which is upgraded and expanded according to the project approved by a competent agency or person specified at Point b, Clause 1, Article 9 of this Circular, the annual depreciation expense of the fixed asset from the year its historical cost is changed shall be determined as follows:

The depreciation rate of the similar asset shall be determined according to regulations in Appendix No. 01 issued together with this Circular, regulations of ministers, heads of central agencies, the provincial-level People's Committees as prescribed at point a, Clauses 1 and 2, Article 13 of this Circular.

6. With regard to a fixed asset whose historical cost is adjusted or changed according to regulations in Points a and d Clause 2 Article 6 and Points c and d Clause 1 Article 9 of this Circular:

a) The annual depreciation expense of the fixed asset from the year in which the historical cost is adjusted or changed shall be determined as follows:

The depreciation rate of the similar asset shall be determined according to regulations in Appendix No. 01 issued together with this Circular, regulations of ministers, heads of central agencies, the provincial-level People's Committees as prescribed at point a, Clauses 1 and 2, Article 13 of this Circular.

In the last year of the depreciation period of the fixed asset, the depreciation expense is the residual value of the fixed asset by December 31 of the preceding year.

b) If the historical cost the fixed asset is adjusted or changed after the period of its depreciation period expired according to regulations, the depreciation expense of the year in which the historical cost is adjusted or changed shall be determined as follows:

In the next years, it is not required to calculate the depreciation of fixed asset.

7. In case of a fixed asset whose historical cost is changed and which is partially lost or seriously damaged due to natural disasters, force majeure events or other unexpected impacts specified at Point dd, Clause 1, Article 9 of this Circular, the annual depreciation expense of the fixed asset from the year in which the historical cost is changed shall be determined as follows:

8. The accumulated depreciation, the depreciation deducted of each fixed asset shall be determined as follows:

9. The depreciation value of the fixed asset of the last year of the depreciation period is the difference between the historical cost and the accumulated depreciation, the depreciation deducted of such fixed asset determined according to regulations in Clause 8 of this Article.

Article 15. Regulations on depreciation of fixed assets at public service providers

1. Fixed assets specified in points a and b, Clause 2, Article 11 hereof and those specified in point c, Clause 2, Article 11 hereof shall be used for activities, including business, lease, joint venture and association. The public service provider shall carry out management and apply depreciation method according to regulations for enterprises. In case it is necessary to adjust the depreciation rate of fixed assets, different from the depreciation rate according to regulations for enterprises, the adjustment shall be made as follows:

a) With regard to the fixed asset specified in point a, Clause 2, Article 11 hereof, if the depreciation according to the depreciation rate under regulations for enterprises affects the operation of the public service provider, such provider shall make a report about this case and send it to the higher management agency (if any)so that such agency submits such report to the Minister and Head of central agency and the People’s Committee of province for decision on adjustment of depreciation rate of the fixed asset. Such adjustment aims to satisfy requirements for the price for public services provided by the public service provider.  

b) With regard to the fixed asset specified in point b, Clause 2, Article 11 hereof, if the depreciation according to the depreciation rate under regulations for enterprises affects the operation of the public service provider, such provider shall make a report about this case and send it to the higher management agency (if any)so that such agency submits such report to the Minister and Head of central agency and the People’s Committee of province for decision on adjustment of depreciation rate of the fixed asset. Such adjustment aims to comply with the road map for calculating the public service prices promulgated by a competent agency or competent person according to regulations.

c) With regard to the fixed asset specified in point c, Clause 2, Article 11 hereof, which are used for activities, including business, lease, joint venture and association, if the depreciation of such asset is required to be carried out according to the depreciation rate of the equivalent fixed asset specified in this Circular, the unit using the asset shall send a report about this case to the higher management agency (if any) so that this agency submit this report to the competent agency or the competent person that approves the scheme for using the asset in the purposes, including business, lease, joint venture and association. This agency or person shall consider deciding the adjustment in depreciation rate of the fixed asset.

2. With regard to the fixed asset specified in point c, Clause 2, Article 11 hereof which is recently used in activities, including business, lease, joint venture and association and activities according to functions and tasks of the public service provider:  

a) The public service provider shall calculate and determine the annual total depreciation value of the fixed asset according to its depreciation rate specified in Article 14 of this Circular.

b) According to the useful life, use frequency or amount of finished works, the public service provider shall calculate and allocate the depreciation cost and the total depreciation cost in the year which are determined in point a of this Clause in order to be included in expenses on provision of public service, business, lease, joint venture or association for the depreciation cost; and record the depreciation costs of fixed assets.

3. With regard to a fixed asset which is the brand of the public service provider and is used for joint venture or association: 

a) The value of the brand of the public service provider used as capital contributed to joint venture and association shall be determined according to the guidelines of Vietnamese Valuation Standard System, the law on intellectual property and relevant laws, in order serve as the basis for the competent agency or the competent person to approve the value of the brand of such provider.

b) The value of the brand of the public service provider contributed as capital to joint venture and association shall be allocated into annual/monthly expense on joint venture or association and determined as follows:

4. Management and use of the amount from depreciation and the value of the brand of the public service provider allocated into expense on joint venture or association:

The depreciation expense of the fixed asset specified in Clause 1, Clause 2 hereof and the value of the brand of the public service provider allocated into expense on joint venture and association specified in Clause 3 of this Article shall be added to the Fund for Developing Professional Activities of the public service provider. With regard to the fixed assets that are purchased using borrowed or mobilized capital, the depreciation of these assets shall be used for repaying both interest and principal; the remaining amount (if any) shall be added into the Fund for Developing Professional Activities of the public service provider.

Article 16. Residual value of fixed assets

1. The residual value of a fixed asset for the purpose of recording in the accounting book shall be determined as follows:

2. With regard to a fixed asset that has been revaluated specified at Point a.4 Clause 3, Point a.3 Clause 5, Point a, Point b Clause 6, Point b.1 Clause 7, Article 6, Point a .3 Clause 3, Point a.2 Clause 5 Article 7 and Clause 5 Article 10 of this Circular, the residual value of the fixed asset upon revaluation is the residual value of such fixed asset after revaluation.