What are the conditions for application software to be defined as a fixed asset in Vietnam? What are the principles of fixed asset management in Vietnam?
Is application software a fixed asset? Is it determined as a fixed asset when it meets which conditions?
Pursuant to Article 3 of Circular No. 23/2023/TT-BTC guiding as follows:
Fixed Asset Standards
1. Asset identification:
a) Property for independent use is identified as an asset.
b) A system consisting of many individual asset parts linked together to perform one or a number of certain functions, without any part of which, the whole system cannot operate, then the system is identified as an asset.
c) A system consisting of many separate, interconnected assets, in which each component part has a different useful life and functions independently, and requires separate management of each asset segment, each individual asset part shall be identified as an asset.
d) Working and/or producing animals, each animal is identified as an asset.
dd) Perennial garden on an independent land campus or each individual perennial plant is identified as an asset.
e) The land use right for each land parcel or the area assigned to agencies, organizations or units in each land parcel is determined as an asset.
g) Intellectual property rights are registered and established according to each certificate of copyright registration, certificate of registration of rights related to copyright, protection title of industrial property objects, Plant variety protection is defined as an asset.
h) Each application software is identified as an asset.
i) The trademark of each public service provider is identified as an asset.
2. The property specified in Clause 1 of this Article (except for the property specified in Clause 3 of this Article) is determined as a fixed asset when simultaneously satisfying the following 02 criteria:
a) Having a useful life of 01 (one) year or more.
b) The input value is VND 10,000,000 (ten million Vietnam Dong) or more.
3. Assets specified in Clause 1 of this Article at public service providers that cover their own recurrent and investment expenses, and assets in public service providers subject to full depreciation of fixed assets service prices as prescribed by law and assets at public service providers may be used all the time for business activities, leasing, joint ventures or association without forming a new legal entity according to regulations. According to the law, it is determined as a fixed asset when the following two criteria are simultaneously satisfied:
a) Having a useful life of 01 (one) year or more.
b) Satisfy the standard on input value of fixed assets according to regulations applicable to enterprises.
According to the above regulations, application software is identified as an asset when it meets 02 conditions:
- Having a useful life of 01 (one) year or more.
- The input value is from 10,000,000 VND (ten million VND) or more.
What are the conditions for application software to be defined as a fixed asset in Vietnam? What are the principles of fixed asset management in Vietnam?
What are the principles of fixed asset management in Vietnam?
Pursuant to Article 5 of Circular No. 23/2023/TT-BTC stipulating as follows:
Principles of fixed asset management
1. All fixed assets existing at agencies, organizations, units and enterprises shall be strictly managed in kind and their value in accordance with the provisions of law on management and use of public properties and relevant laws. The criteria on input value, depreciation, amortization, residual value of fixed assets, part of brand value of public service providers allocated to joint venture and association expenses are integers; In case the result of determining these criteria is a decimal number, it shall be rounded according to the principle of adding 01 to the integer part.
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Thus, all fixed assets existing at agencies, organizations, units and enterprises are strictly managed in kind and their value in accordance with the provisions of law on management and use of public property and relevant laws.
The criteria on input value, depreciation, amortization, residual value of fixed assets, part of brand value of public service providers allocated to joint venture and association expenses are integers; In case the result of determining these criteria is a decimal number, it shall be rounded according to the principle of adding 01 to the integer part.
What are the regulations on the use of input value and residual value of fixed assets in Vietnam?
Pursuant to Clause 4, Article 5 of Circular No. 23/2023/TT-BTC stipulating as follows:
Principles of fixed asset management
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4. Input value and residual value of fixed assets specified in this Circular shall be used as follows:
a) The input value of fixed assets determined according to the provisions of Articles 6, 7 and 8 of this Circular, the residual value of the fixed assets determined according to the provisions of Article 16 of this Circular shall be used to record accounting books, determining the authority to decide on the use and handling of public properties according to regulations, declaring and logging information into the National Database of Public Property.
b) Do not use the input value of fixed assets determined according to the provisions of Articles 6, 7 and 8 of this Circular, the residual value of the fixed assets determined according to the provisions of Article 16 of this Circular to: Making property sale prices, transferring land use rights, leasing assets, determining the value to contribute capital to joint ventures or associations, using fixed assets to participate in investment projects in the form of public partnerships - private.
Thus, the input value and residual value of fixed assets are used in accordance with the above provisions.
Circular No. 23/2023/TT-BTC takes effect from June 10, 2023.
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