Guidance on regime for management and calculation of depreciation of fixed assets in 2023 in Vietnam
What are regulations on guidance on regime for management and calculation of depreciation of fixed assets in 2023 in Vietnam? - Question from Mr. Tri (Bac Ninh).
Guidance on regime for management and calculation of depreciation of fixed assets in 2023 in Vietnam
On 24/04/2023, the Government issued the Circular 23/2023/TT-BTC on guidance on 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.
Circular 23/2023/TT-BTC replaces Circular 45/2018/TT-BTC. It includes 4 chapters:
Chapter I: SCOPE AND REGULATED ENTITIES
Chapter II: GENERAL REGULATIONS ON MANAGEMENT OF FIXED ASSETS
Chapter III: HISTORICAL COST, DEPRECIATION AND RESIDUAL VALUE OF FIXED ASSET
Chapter IV: IMPLEMENTATION CLAUSE
Circular 23/2023/TT-BTC takes effect from 10/6/2023.
What fixed assets are not required to calculate the depreciation in Vietnam?
Pursuant to Clause 3 Article 11 of the Circular 23/2023/TT-BTC stipulating scope of depreciation calculation of fixed assets as follows:
Scope of depreciation calculation of fixed assets
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3. It is not required to calculate the depreciation of the following assets:
a) 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.
b) Special fixed assets specified in Point c, Clause 1 Article 5 hereof.
c) Fixed assets that are still usable after their depreciation is being fully calculated or their costs are being completely depreciated (including fixed assets that public service providers can receive after expiration of the duration of joint venture or association).
d) Fixed assets that are not usable though their depreciation is not fully calculated and their costs are not completely depreciated.
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As regulations above, it is not required to calculate the depreciation of the following assets:
- Fixed assets are the land use rights which must be determined to be included in the value of such assets.
- Special fixed assets in accordance with the law.
-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.
What fixed assets are classified as tangible fixed asset in Vietnam?
Pursuant to Clause 1 Article 44 of the Circular 23/2023/TT-BTC stipulating classification of fixed assets as follows:
Classification of fixed assets
1. Classification according to physical properties:
a) 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. To be specific:
- Type 1: Buildings and constructions: offices, warehouses, auditoriums, clubs, cultural buildings, sport stadiums, museums, kindergartens, workshops, classes, lecture halls, dormitories, hospitals, convalescent homes, guest houses, houses, public houses, other buildings and constructions.
- Type 2: Architectural structures: warehouses, storage tanks, parking lots, drying grounds, sports grounds, swimming pools, bore wells, dug wells, fences and other architectural structures.
- Type 3: Cars, including: official state cars, cars that serve general works, specialized cars, cars that serve state reception and other cars.
- Type 4: Other vehicles (except for cars): road transport vehicles, rail transport vehicles, water transport vehicles, air transport vehicles and other transport vehicles.
- Type 5: Machinery and equipment: Popular official machinery and equipment, equipment that serves general activities; specialized machinery and equipment and other machinery and equipment.
- Type 6: Perennial plants, draught animals and/or animals that serve production.
- Type 7: Other tangible fixed assets
b) 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.
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As regulations above, fixed assets classified as tangible fixed asset in Vietnam in Vietnam are:
- Type 1: Buildings and constructions: offices, warehouses, auditoriums, clubs, cultural buildings, sport stadiums, museums, kindergartens, workshops, classes, lecture halls, dormitories, hospitals, convalescent homes, guest houses, houses, public houses, other buildings and constructions.
- Type 2: Architectural structures: warehouses, storage tanks, parking lots, drying grounds, sports grounds, swimming pools, bore wells, dug wells, fences and other architectural structures.
- Type 3: Cars, including: official state cars, cars that serve general works, specialized cars, cars that serve state reception and other cars.
- Type 4: Other vehicles (except for cars): road transport vehicles, rail transport vehicles, water transport vehicles, air transport vehicles and other transport vehicles.
- Type 5: Machinery and equipment: Popular official machinery and equipment, equipment that serves general activities; specialized machinery and equipment and other machinery and equipment.
- Type 6: Perennial plants, draught animals and/or animals that serve production.
- Type 7: Other tangible fixed assets
Note: Circular 23/2023/TT-BTC takes effect from 10/6/2023.
Best regards!
