06 Principles for Determining the Value of Assets on Repossessed Land Area

Principles for determining asset value on recovered land area (Illustration)

Circular 51/2015/TT-BTC stipulates principles for determining the value of assets on the recovered land area when the local authority allocates or leases land to organizations, households, and individuals as follows:

- When handing over land to households and individuals, the local authority must determine the value of assets on the land at the time of transfer to serve as the basis for recovering the state capital invested.- The value of assets such as gardens and planted forests is re-determined according to the law guiding the method for determining the price of planted forests and gardens to arrange, renew, develop, and enhance the efficiency of agricultural and forestry companies.- The value of other assets is re-determined based on market prices determined by price appraisal organizations or by the provincial price appraisal council according to the law on price appraisal.- The transferee (organization, household, individual) must pay the agricultural and forestry company the re-determined asset value within a maximum period of one (1) year from the time of receiving the transfer.- For poor households, exemptions or reductions may be considered based on the remaining state capital. The consideration for exemptions or reductions is based on the financial status of the agricultural and forestry company, the area, the scale of the transferred asset value, and the legal standards for poor households. The authority to decide on exemptions and reductions follows the provisions of Clause 3, Article 5 of this Circular.- The cost of determining asset value is accounted into the business production costs of the agricultural and forestry company having transferred assets. In the case where the company operates at a loss, the cost of determining asset value is supported by:

- The Support Fund for Enterprise Arrangement and Development for companies under Ministries, Ministerial-level agencies, Government-attached agencies, provincial and central city People's Committees.- The Parent Company’s Enterprise Arrangement Support Fund of economic groups, state general corporations, parent companies within parent-subsidiary company complexes, for companies under economic groups, state general corporations, and parent companies. If insufficient, additional funds are sourced from the Enterprise Arrangement and Development Support Fund.

- The difference between the obtained value and the recorded value in accounting books is accounted by the agricultural and forestry company as an increase/decrease in state capital.

See details at Circular 51/2015/TT-BTC, effective from June 2, 2015

Le Hai

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