Chapter III
REGULATION ON DEPRECIATION OF FIXED ASSETS
Article 12. 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 the cases specified in clause 2, clause 3 of this Article.
2. The fixed assets of public sector entities must be depreciated according to Article 16 hereof, including:
a. The fixed assets of public sector entities that pay for the regular expenses and investment expenses themselves.
b. The fixed assets of public sector entities which require its depreciation to be included in the service price according to the law.
c. The fixed assets of public sector entities which are not specified in point a and b of this clause shall be used in business activities, leasing activities, joint venture and association activities without establishing new legal entity.
3. The following fixed assets shall not be calculated for their depreciation:
a. The 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. The special fixed assets specified in Article 5 hereof, except the fixed assets which are brands of public sector entities and are used in joint venture and association activities without establishing new legal entity according to point c, clause 2 of this Article.
c. Rented fixed assets.
d. Fixed assets being kept on behalf of the State.
dd. Fixed assets that are still usable after their depreciation is being fully calculated or their costs are being completely depreciated.
dd. Fixed assets that are not usable though their depreciation is not fully calculated and their costs are not completely depreciated.
Article 13. Rules for calculating depreciation of fixed assets and depreciate them
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. The scope of fixed assets being calculated for their depreciation is for all current fixed assets specified in clause 1, Article 12 hereof, by December 31 of the calculating year.
b. The depreciation of the fixed assets specified in point c, clause 2, Article 12 hereof shall be calculated and such assets shall also be depreciated according to the regulations in Article 16 hereof.
c. If the agencies, organizations, units or enterprises are transferred, split, merged or dissolved, the depreciation of their fixed assets during the financial year, in which the competent agency or the competent person decides such transfer, separation, merging and dissolution, shall be calculated at the receiving agencies, organizations, units or enterprises.
d. If the fixed assets are counted and evaluated according to the decision of the competent agency or the competent person, the depreciation of such assets shall be determined on the basis of revaluation after stocktaking in the financial year in which the competent agency or competent person determines the revaluated value.
2. Rules for depreciating fixed assets
a. The rules for depreciating the fixed assets specified in point a and b, clause 2 and Article 12 hereof shall be applied in accordance with the regulations for enterprises.
b. As for the fixed assets specified in point c, clause 2, Article 12 hereof, the depreciation shall be carried out from the date on which such assets are put into use in the following activities: business, leasing, 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 activity, leasing activity, joint venture activity and association activity in order to record the cost of each corresponding activity.
Article 14. Determination of the useful life and depreciation rate of fixed assets
1. The useful life and depreciation rate of tangible fixed assets shall be determined according to the regulations in Appendix 01 hereto.
If the tangible fixed assets are used in the area where the weather and environmental conditions can affect their depreciation, in necessary cases, the useful life of such assets shall be stipulated differently from the regulations in Appendix 01 hereto. The Ministers and Heads of central agencies shall provide the specific regulation on such useful life after receiving the agreement from the Ministry of Finance; the People’s Committee of the province shall provide the specific regulation on such useful life after receiving the agreement from the Standing Committee of People's Council. The depreciation rate shall not be adjusted for more than 20% of the depreciation rate specified in Appendix 01 hereto.
If the fixed assets are provided and transferred without recording in the accounting book, the agencies, organizations, units or enterprises which own such assets or is assigned with the task of handling such assets shall re-examine their useful life and depreciation rate, in order for the agencies, organizations, units or enterprises assigned to transfer such assets to use the re-examined result as the basis for accounting such assets.
The useful life and depreciation rate of the extra fixed assets detected by agencies, organizations, units or enterprises shall be re-examined by them and used as the basis for accounting fixed assets.
2. The Ministers and Heads of central agencies and the People’s Committee of province shall promulgate the regulation on the list of intangible fixed assets under the management of Ministries and central or local agencies. Such regulation must specify the assets’ useful life and depreciation rate (using form No. 01 in Appendix 02 hereto).
The useful life of an intangible fixed asset shall not be lower than 04 (four) years and shall not exceed 50 (fifty) years.
In necessary cases where the useful life of an intangible fixed asset must be specified as less than 04 years, the Ministers and Heads of central agencies and the People's Committee of province shall provide specific regulation after receiving the agreement from the related Administrative Ministry.
Article 15. Methods for calculating the depreciation of fixed assets
1. The annual depreciation expense of each fixed asset shall be determined according to the following formula:
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Annual depreciation expense of each fixed asset
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=
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Cost of such fixed asset
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x
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Depreciation rate (% per year)
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Annually, based on the depreciation that increases and decreases in the year, the agencies, organizations, units or enterprises shall calculate the total depreciation of all of their fixed assets as follows:
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Accrued depreciation of the fixed asset in year (n)
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=
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Depreciation of the fixed asset in year (n -1)
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+
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Depreciation of the fixed asset that increases in year (n)
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-
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Depreciation of the fixed asset that decreases in year (n)
|
2. As for the fixed assets of which the prices are changed, the agency, organization, unit or enterprise shall rely on the price standards and residual value of such assets after re-determination according to Article 10 hereof, and the depreciation rate of such assets according to Article 14 hereof to continue calculate the depreciation of the fixed assets of the remaining years.
3. As for the fixed assets received from the transfer, separation, merging and dissolution of an agency, organization, unit or enterprise, the annual depreciation of the fixed assets recorded in the accounting book at the agency, organization, unit or enterprise receiving such assets shall be calculated according to the formula specified in clause 1 of this Article, where the value of fixed assets are determined according to the regulations in clause 3, Article 7 hereof, the depreciation rate of fixed assets are determined according to the regulations in clause 1, Article 14 hereof.
4. The depreciation expense in the last year of the useful life of a fixed asset is the difference between its cost and the accrued depreciation of the fixed asset.
Article 16. Regulations on depreciation of fixed assets
1. The fixed assets specified in point a and b, clause 2, Article 12 hereof and those specified in point c, clause 2, Article 12 hereof shall be used the whole time for the following activities: business, leasing, joint venture and association. The unit shall carry out management and apply depreciation method according to the regulations for enterprises.
The unit shall make a report about the annual depreciation rates and annual depreciation costs and send such report to the tax administration agency (using form No. 04 in Appendix 02 hereto) for supervision and management; the time limit for sending such report must be before January 01 every year.
2. The depreciation rates of the fixed assets specified in clause 1 of this Article shall be adjusted as follows:
a. As for the fixed assets specified in point a, clause 2, Article 12 hereof, if the depreciation specified in clause 1 of this Article affects the operation of the public sector entities, such entities shall make a report about this case and send it to the higher management agency (if any), in order for this agency to forward such report to the Ministers and Heads of central agencies and the People’s Committee of province for decision on adjustment of depreciation rate of fixed assets. The aim of such adjustment is to satisfy the requirements for prices for public services provided by the public sector entities.
b. As for the fixed assets specified in point b, clause 2, Article 12 hereof, if the depreciation carried out in accordance with clause 1 of this article affects the operation of public sector entities, such entities shall send a report about such case to the higher management agency (if any) in order for this agency to forward it to the Ministers and Heads of central agencies and People’s Committee of province for decision on adjustment of depreciation rates of fixed assets. 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 the regulations. Also, these depreciation rates shall not be lower than the equivalent depreciation rates hereof.
c. As for the fixed assets specified in point c, clause 2, Article 12 hereof, which are used the whole time for the following activities: business, leasing, joint venture and association, if the depreciation of these assets is required to be carried out based on the depreciation rates of the equivalent fixed assets specified in this Decree, the units using these assets must send a report about this case to the higher management agency (if any) in order for this agency to forward this report to the competent agency or the competent person, who approves the scheme for using these assets in the following purposes: business, leasing, joint venture and association. This agency or person shall consider deciding the adjustment of depreciation rates of these fixed assets.
3. As for the fixed assets specified in point c, clause 2, Article 12 hereof (except the fixed assets which are brands of public sector entities) which are recently used in the following activities: business, leasing, joint venture and association based on the functions and tasks of the public sector entities:
a. The unit shall calculate and determine the annual total depreciation value of fixed assets based on their depreciation rates hereof.
b. Based on the useful life, use frequency or amount of finished works, the unit shall calculate and allocate the depreciation costs and the total depreciation cost which are determined in point a of this clause; make an annual report about the depreciation costs of such assets and send this report to the tax administration agency in person (using form No. 04 in Appendix 02 hereto) for supervision and management; the time limit for sending such report must be before January 01 every year.
c. The unit shall allocate the registered depreciation costs in order to aggregate them into the expenses on public professional service provision, business, leasing, joint venture and association; record the depreciation costs of fixed assets.
(Example 3 in Appendix 03 hereto).
4. As for the fixed assets which are brands of the public sector entities and are used in joint venture and association activities specified in point c, clause 2, Article 12 hereof:
a. The value of the brands of public sector entities shall be determined according to the guidelines of Vietnamese Valuation Standard System, the law on intellectual property and other related laws, in order to be used as the basis for the competent agency or the competent person to approve the value of the brands of such unit.
b. The value of the brands of public sector entities used as capital contribution in joint venture and association activities, which are approved by the competent agency or competent person, shall be allocated according to duration of the joint venture or association and the scheme for using assets in joint venture or association purposes in order to aggregate them into the expenses on service provision of the duration of joint venture.
5. Management and use of the amount from depreciation:
The amount from depreciation regarding the fixed assets specified in clause 1, 2, 3 and 4 hereof shall be added into to the Fund for Developing Professional Activities of the unit.
For the fixed assets which are invested and procured by using the lending and mobilizing sources, the amount from depreciation of these assets shall be used for making repayment both interest and principal; the residual amount (if any) shall be added into the Fund for Developing Professional Activities of the unit.
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Thông tư 45/2018/TT-BTC (Bản Word)
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