What are some new points on depreciation of fixed assets in Vietnam according to Circular No. 23/2023/TT-BTC replacing Circular No. 45/2018/TT-BTC?
Amending regulations on standards for identification of fixed assets in Vietnam?
Pursuant to Article 3 of Circular No. 23/2023/TT-BTC stipulating standards of assets being fixed assets subject to management and calculation of depreciation at agencies, organizations or units and fixed assets handed to enterprises by the State without calculation of the state capital portion of such enterprises if they meet 02 standards below:
- The useful life is 01 (one) year or more.
- The historical cost is 10.000.000 VND (ten million VND) or higher.
However, for assets of public service providers, they can only be identified as fixed assets when they meet 02 standards below:
- The useful life is 01 (one) year or more.
- They meet standards of historical costs of fixed assets according to regulations applicable to enterprises.
What are some new points on depreciation of fixed assets in Vietnam according to Circular No. 23/2023/TT-BTC replacing Circular No. 45/2018/TT-BTC?
Amending and supplementing regulations on classification of fixed assets in Vietnam?
Regarding the definition of intangible fixed assets:
According to the provisions of Point b, Clause 1, Article 4 of Circular No. 23/2023/TT-BTC, an intangible fixed asset is an asset that does not have a physical form and its formation is invested by an agency, organization, unit or enterprise or through an operation process. To be specific:
- Type 1: Land use rights.
- Type 2: Copyright and copyright-related right.
- Type 3: Industrial proprietorship.
- Type 4: Rights to plant varieties.
- Type 5: Software.
- Type 6: Brands of public service providers.
Thus, compared with the provisions of Circular No. 45/2018/TT-BTC, the new regulations do not classify intangible fixed assets according to other types of intangible fixed assets.
Regarding classification of fixed assets according to origins of assets:
According to the provisions of Article 4 of Circular No. 23/2023/TT-BTC, fixed assets classified according to origins of assets include:
- Fixed assets formed from procurement.
- Fixed assets formed from investment in construction.
- Fixed assets provided or transferred.
- Fixed assets that are giveaways or promotional products (including cases where providers exchange old assets for new assets after a period of use according to policies of manufacturers/providers).
- Fixed assets not listed in the account book.
- Fixed assets that public service providers can receive after expiration of the duration of joint venture or association.
- Fixed assets formed from other sources.
Thus, the new regulation adds criteria for classification of assets according to origins of assets: Fixed assets that public service providers can receive 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.
Amendments to regulations on special fixed assets:
According to the provisions of Article 4 of Circular No. 23/2023/TT-BTC on special fixed assets as follows:
Special fixed asset is an asset of which cost of formation or real value is not determined, however, it is subject to strict management (such as: antique, exhibit in museum, monument, ranked historical relic, ancient document or rare document), fixed asset which is the brand of a public service provider.
According to that, compared with Circular No. 45/2018/TT-BTC, Circular No. 23/2023/TT-BTC supplements that special fixed assets are ancient document or rare document, etc.
According to actual condition and management requirements for assets specified in this point, Ministers, heads of ministerial-level agencies, governmental agencies, other central agencies, the People's Committees of provinces and central-affiliated cities shall promulgate the list of special fixed assets under the management by ministries and central or local agencies (using form No. 02 in Appendix 02 enclosed with Circular No. 23/2023/TT-BTC) in order to exercise unified management.
Annul 02 types of fixed assets not required to calculate the depreciation?
Pursuant to Clause 3, Article 11 of Circular No. 23/2023/TT-BTC stipulating the scope of depreciation calculation of fixed assets, of which 04 types of fixed assets are not required to calculate the depreciation, including:
- 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.
- Special fixed assets as specified.
- Fixed assets that are still usable after their depreciation is being fully calculated or their costs are being completely depreciated.
- Fixed assets that are not usable though their depreciation is not fully calculated and their costs are not completely depreciated.
Compared with the regulations in Circular No. 45/2018/TT-BTC, Circular No. 23/2023/TT-BTC removes 02 types of fixed assets not required to calculate the depreciation, which are rented fixed assets and fixed assets being kept on behalf of the State.
Circular No. 23/2023/TT-BTC takes effect from June 10, 2023.
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