Are the conditions for determining the historical cost of fixed assets in Vietnam reduced from VND 30 million to VND 10 million?
- Does Circular No. 23/2023/TT-BTC replace Circular No. 45/2013/TT-BTC or Circular No. 45/2018/TT-BTC?
- Are the conditions for determining the historical cost of fixed assets in Vietnam reduced from VND 30 million to VND 10 million?
- Rules for management of fixed assets according to Circular No. 23/2023/TT-BTC?
Does Circular No. 23/2023/TT-BTC replace Circular No. 45/2013/TT-BTC or Circular No. 45/2018/TT-BTC?
Currently, there are many cases of confusion about Circular No. 23/2023/TT-BTC replacing Circular No. 45/2013/TT-BTC. However, this is incorrect, specifically:
Circular No. 23/2023/TT-BTC guiding regime for management and calculation of depreciation of fixed assets of agencies, organizations or units and fixed assets handed to enterprises by the state without caculation of the state capital portion of such enterprises takes effect from June 10, 2023 and replaces Circular No. 45/2018/TT-BTC.
And Circular No. 45/2013/TT-BTC guiding regulation on management, use and depreciation of fixed assets applicable to enterprises established and operating in Vietnam in accordance with the law is still effective and currently there is no alternative document.
Are the conditions for determining the historical cost of fixed assets in Vietnam reduced from VND 30 million to VND 10 million?
Are the conditions for determining the historical cost of fixed assets in Vietnam reduced from VND 30 million to VND 10 million?
According to the above content, the historical cost of assets is determined according to Article 3 of Circular No. 45/2013/TT-BTC and Article 3 of Circular No. 45/2018/TT-BTC as follows:
- Article 3 of Circular No. 45/2013/TT-BTC stipulating standards and identification of fixed assets in enterprises established and operating in Vietnam in accordance with the law as follows:
Standards and identification of fixed assets in Vietnam
1. Means of labor are the tangible assets with independent structure, or a system of many individual parts of assets linked to perform one or a certain number of functions and without any part, the system can not work, and if meet the following three criteria they shall be regarded as fixed assets:
a) It is certain to gain economic benefit in the future from the use of such asset;
b) Having the utilization time of over 01 year.
c) Primary price of assets must be determined reliably, and is valued at 30,000,000 (thirty million) dong or more.
Thus, assets are determined as fixed assets at enterprises established and operating in Vietnam according to the provisions of law when the following conditions are satisfied:
- It is certain to gain economic benefit in the future from the use of such asset;
- Having the utilization time of over 01 year.
- Primary price of assets must be determined reliably, and is valued at 30,000,000 (thirty million) dong or more.
And Article 3 of Circular No. 45/2018/TT-BTC stipulating standards for identification of fixed assets of regulatory agencies, public sector entities, units of people’s armed force, agencies of Communist Party of Vietnam and organizations funded by the State and of fixed assets handed to enterprises by the State without calculation of the state capital portion of such enterprises as follows:
Identification of fixed assets in Vietnam
1. Identification of tangible fixed assets
A tangible fixed asset is an asset that has a physical form, independent structure, or is a system composed of multiple separate parts connected together to perform one or certain functions, and satisfy both requirements below:
a. The useful life is 01 (one) year or more.
b. The cost is 10.000.000 VND (ten million VND) or higher.
Thus, according to current regulations, fixed assets of fixed assets of regulatory agencies, public sector entities, units of people’s armed force, agencies of Communist Party of Vietnam and organizations funded by the State and of fixed assets handed to enterprises by the State without calculation of the state capital portion of such enterprises must satisfy 02 conditions:
- The useful life is 01 (one) year or more.
- The cost is 10.000.000 VND (ten million VND) or higher.
In addition, from June 10, 2023, after Circular No. 23/2023/TT-BTC takes effect, the standard for determining fixed assets at cost is still VND 10 million.
Thus, Circular No. 23/2023/TT-BTC takes effect and replaces Circular No. 45/2018/TT-BTC without replacing Circular No. 45/2013/TT-BTC, so there is no change in cost of fixed assets.
Rules for management of fixed assets according to Circular No. 23/2023/TT-BTC?
According to Article 5 of Circular No. 23/2023/TT-BTC, the rules for management of fixed assets are as follows:
- All current fixed assets of agencies, organizations, units or enterprises shall be managed strictly regarding their physical states and values. Such management shall comply with the law on management and use of public property and other related laws.
The indicator of historical cost, depreciation, the residual value of fixed asset, or the brand value of a public service provider allocated to joint venture or association expense is an integer; in case the indicator is a decimal number, it shall be rounded by adding 01 to the integer part.
- Agencies, organizations, units and enterprises shall:
+ Tag their existing fixed assets in accordance with applicable accounting regulations. Each fixed asset is an asset recorded in the accounting book.
+ Carry out annual stocktaking of fixed assets; adjust accounting data if there is a difference.
+ Submit reports on management and use of fixed assets in accordance with regulations of law on management and use of public property.
- In case fixed assets are still usable after their depreciation is fully calculated or their value is completely depreciated according to the law, agencies, organizations, units or enterprises shall continue to manage and monitor such fixed assets according to regulations of law.
In case of fixed assets that their depreciation is fully calculated or their value is completely depreciated but their historical costs must be changed according to regulations in Clause 1 Article 9 of this Circular, such fixed assets shall be depreciated and their depreciation shall be calculated according to regulations of the law for the remaining useful life after their historical costs are changed (if any).
- Historical cost and the residual value of a fixed asset specified in this Circular shall be used as follows:
+ The historical cost of the fixed asset that has been identified in Articles 6, 7 and 8 of this Circular and the residual value of the fixed asset that has been identified in Article 16 of this Circular shall be recorded into the accounting book, declared while logging information into the Public Property National Database, and used for identification of the authority to use or handle public property according to regulations.
+ The historical cost of the fixed asset that has been identified in Articles 6, 7 and 8 of this Circular and the residual value of the fixed asset that has been identified in Article 16 of this Circular shall not be used in cases where the asset is sold or leased, the land use right is transferred and its value is determined to make capital contribution in joint venture and association and to use the fixed asset to participate in investment project in the form of public-private partnership.
Circular No. 23/2023/TT-BTC takes effect from June 10, 2023
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