How does EVN depreciate fixed assets?

Depreciation of Fixed Assets of EVN as Regulated

The depreciation of fixed assets of EVN is regulated under Article 14 of the Financial Management Regulations of Vietnam Electricity Corporation issued together with Decree 10/2017/ND-CP as follows:

1. EVN conducts depreciation of fixed assets according to the regulations of the Ministry of Finance.

2. The General Director of EVN decides on the specific depreciation rate within the framework set by the Ministry of Finance.

3. The use of depreciation funds for investment in construction must comply with legal regulations on investment management and construction.

4. EVN centrally manages and uses the depreciation funds of fixed assets invested by EVN at its affiliated units.

5. Depreciation for specific cases:

a) For fixed assets re-evaluated according to the decision of the competent authority, EVN proactively establishes a new depreciation rate within the framework set by the Ministry of Finance and re-registers with the Tax Authority.

b) For investment projects upgrading a portion of fixed assets, after the upgrade, EVN proactively re-determines the technical lifespan and new depreciation period according to current regulations.

c) For Hydro Power Plant projects, depreciation starts after the plant has operated for 72 hours in a ready-to-use state.

d) For other Power Plant projects, depreciation starts from the date the plant is officially put into commercial operation.

The above outlines the regulations on fixed asset depreciation of EVN. For further understanding, you should refer to Decree 10/2017/ND-CP.

How does EVN Lease, Mortgage, and Pledge Assets?

Based on Article 15 of the Financial Management Regulations of Vietnam Electricity Corporation issued together with Decree 10/2017/ND-CP, the regulations on EVN’s rights to lease, mortgage, and pledge assets are as follows:

1. EVN has the right to lease, mortgage, and pledge its assets under the principles of efficiency, capital preservation, and development according to legal regulations.

2. The Board of Members of EVN decides on contracts for leasing, mortgaging, and pledging assets valued under 50% of the equity as recorded in the latest quarterly or annual financial report of EVN at the time of the decision, but the remaining value of the leased, mortgaged, or pledged assets does not exceed the capital of a Group B project as regulated by the Law on Public Investment. In case this limit is exceeded, the Board of Members of EVN is responsible for reporting to the owner’s representative body for consideration and decision. If beyond their authority, the owner’s representative body will report to the Prime Minister of the Government of Vietnam for consideration and decision.

3. The use of assets for leasing, mortgaging, and pledging must strictly comply with the Civil Code and other legal regulations.

Respectfully!