Management of Amortization Amounts and Brand Value Allocation for Public Service Providers
What fixed assets at public service providers must be depreciated?
Based on the provisions of Clause 2, Article 11 of Circular 23/2023/TT-BTC, the fixed assets at public service providers that must be depreciated include:
(1) Fixed assets at public service providers that self-ensure recurrent and investment expenditures.
(2) Fixed assets at public service providers that fall under the objects required by law to fully account for fixed asset depreciation into service prices.
(3) Fixed assets at public service providers not belonging to the above assets used for business activities, leasing, joint ventures, and associations without forming a new legal entity as per the law.
How is the management of depreciation funds and the brand value of public service providers allocated?
Guidance on fixed asset depreciation at public service providers
Based on Article 15 of Circular 23/2023/TT-BTC, the guidance on fixed asset depreciation at public service providers is as follows:
- For fixed assets at public service providers that must be depreciated and are used entirely for business activities, leasing, joint ventures, and associations, the unit implements policies on management and depreciation as per the regulations applicable to enterprises. If there is a need to adjust the depreciation rate of fixed assets from the rate applied to enterprises, proceed as follows:
+ For fixed assets at public service providers that self-ensure recurrent and investment expenditures, if the depreciation, as per the rate applied to enterprises, affects the operations of public service providers, the public service provider reports to the superior management agency (if any) to submit to the Minister, Head of the central agency, or the Provincial People's Committee for consideration and decision on adjusting the depreciation rate of the fixed assets to ensure the quality and cost of public service provision by the public service provider.
+ For fixed assets at public service providers that fall under the objects required by law to fully account for fixed asset depreciation into service prices, if the depreciation, as per the rate applied to enterprises, affects the operations of the public service provider, the public service provider reports to the superior management agency (if any) to submit to the Minister, Head of the central agency, or the Provincial People's Committee for consideration and decision on adjusting the depreciation rate of the fixed assets to align with the public service price calculation roadmap issued by the competent authority.
+ For fixed assets at public service providers not belonging to the above two cases but used for business activities, leasing, joint ventures, and associations without forming a new legal entity as per the law, used entirely for business activities, leasing, joint ventures, and associations, if necessary, depreciate as per the wear and tear rates of fixed assets applicable in this Circular, the asset-using unit reports to the superior management agency (if any) to submit to the competent authority for approval of the Scheme for using assets for business, leasing, joint ventures, and associations, for consideration and decision on adjusting the depreciation rate of fixed assets accordingly.
- For fixed assets at public service providers not belonging to the above two cases but used for both business activities, leasing, and joint ventures, and also for activities according to the functions and tasks of the public service provider, do the following:
+ The unit calculates and determines the total annual depreciation and wear and tear value of fixed assets according to the annual depreciation rates stipulated in Article 14 of Circular 23/2023/TT-BTC.
+ Based on the usage time, usage frequency, or work volume completed, the unit calculates and allocates the depreciation and wear and tear amounts within the total annual depreciation and wear and tear value determined at point a, clause 2, Article 15 of Circular 23/2023/TT-BTC to account for public service provision costs, business, leasing, joint ventures, associations for depreciation amounts; and perform accounting for fixed asset wear and tear for wear and tear amounts.
- For fixed assets that are brands of public service providers used in joint ventures and associations, proceed as follows:
+ The determination of the brand value of public service providers for capital contribution in joint ventures and associations is done based on guidance in the Vietnam Valuation Standards System, intellectual property law, and relevant laws to provide a basis for the competent authority to approve the brand value of the unit for joint venture and association capital contributions.
+ The brand value of public service providers for joint venture and association capital contributions is allocated to the annual/monthly joint venture and association costs and determined as follows:
The annual/monthly joint venture and association costs allocation of the brand value of public service providers = The brand value of public service providers for joint venture and association capital contribution as determined at point a of this clause / The capital contribution period for joint ventures and associations as per the Scheme for asset usage for joint ventures and associations approved by the competent authority (year/month).
How is the management of depreciation funds and the brand value of public service providers allocated?
According to the provisions of clause 4, Article 15 of Circular 23/2023/TT-BTC on this issue:
- The depreciation funds for fixed assets as stipulated in clause 1 and clause 2 of Article 15 of Circular 23/2023/TT-BTC and the brand value of public service providers allocated to joint venture and association costs as stipulated in clause 3 of Article 15 of Circular 23/2023/TT-BTC is supplemented into the unit's Development Fund for operational activities.
In the case where fixed assets are invested and purchased from loan funds or mobilized funds, the depreciation funds for fixed assets are used to repay the principal and interest; the remaining amount (if any) is supplemented into the unit's Development Fund for operational activities.
Circular 23/2023/TT-BTC will take effect from June 10, 2023.
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