Guidelines on accounting for national railway infrastructure assets in Vietnam

Guidelines on accounting for national railway infrastructure assets in Vietnam​ (Image from the Internet)

1. Guidelines on accounting for national railway infrastructure assets in Vietnam

According to Article 12 of Decree 15/2025/ND-CP, the guidelines on accounting for national railway infrastructure assets in Vietnam are as follows:

- Railway infrastructure assets with an independent structure or a system comprising multiple individual assets linked together to perform one or several specific functions are considered a separate accounting entity.

- The enterprises managing railway assets are responsible for:

+ Maintaining accounting records and executing the accounting for railway infrastructure assets in accordance with legal provisions on accounting and the stipulations of Decree 15/2025/ND-CP.

+ Reporting the status of increases, decreases, and depreciation of railway infrastructure assets as per the legal regulations.

- The original cost, and residual value of railway infrastructure assets are determined based on the following principles:

+ For railway infrastructure assets with available original cost and residual value information, use the existing values for accounting entries.

+ For newly acquired or constructed railway infrastructure assets, the original cost for accounting entries must be the procurement cost or the investment value settled in compliance with legal provisions.

In cases where the procurement or investment value is settled collectively for multiple assets or asset items (without specific separation for each asset or item), the original cost for each asset or item is allocated following suitable criteria (quantity, detailed estimate, proportion according to the market value of corresponding assets, etc.).

If the account settlement is yet to be approved by the authorized agency or person, use the provisional original cost for accounting entries. The provisional original cost in such cases is chosen according to the priority order as follows: Appraisal value of the settlement; proposed settlement value; value identified in the A - B acceptance report; total investment level or approved project estimate or latest adjusted project estimate (in case of project estimate adjustment); EPC contract value.

When using the provisional original cost for accounting entries, if the purchase or investment value as per the appraisal settlement, proposed settlement, A - B acceptance report, or overall investment, project estimate, EPC contract value is a common value for many assets or asset items (without specific segregation for each asset or item), the provisional original cost of each asset or item is allocated based on suitable criteria (quantity, detailed estimate, proportion by market value of corresponding assets...).

When using the provisional original cost for accounting, upon approval of the settlement by the authorized agency or person, the railway asset management enterprise shall adjust the provisional original cost to the settled value approved, thereby adjusting the accounting records and executing asset accounting as prescribed.

+ For railway infrastructure assets managed by the railway asset management enterprise received under the transfer or allocation decision by an authorized agency or person, the original cost and residual value of the assets are determined based on the original cost and residual value recorded in the transfer or allocation receipt minutes.

In cases where the transferred or allocated railway infrastructure assets are accounted for using a provisional original cost, after the approved settlement, the transferring party must notify the receiving party (including documents related to the approved settlement) to adjust the receiving party's accounting records and proceed with accounting as prescribed.

+ For railway infrastructure assets without information to determine value according to the stipulations at points a, b, and c, clause 3, Article 12 of Decree 15/2025/ND-CP, the handling is as follows:

++ If there are equivalent railway infrastructure assets (in terms of scale, technical level, and time of use) and these equivalent assets have recorded the original cost and residual value in the accounting records, use the equivalent asset's values to determine the asset value;

++ If there are no equivalent railway infrastructure assets or such equivalent assets have not recorded the original cost and residual value in the accounting records, use the prescribed conventional price determined by the competent authority to establish the asset value;

++ If there are no equivalent railway infrastructure assets or such equivalent assets have not recorded the original cost and residual value in the accounting records, and the conventional price cannot be applied, the railway asset management enterprise hires an appraisal business to evaluate the asset value in accordance with legal regulations on pricing.

The use of appraisal certificates is conducted according to legal regulations on pricing. Based on the actual condition of the assets and the appraisal results provided by the valuation enterprise, the railway asset management enterprise determines the original cost and residual value for accounting entries. The valuation cost is included in the management and exploitation cost of railway infrastructure assets.

+ For railway infrastructure assets identified as surplus during inventory in use, depending on the origin and time of use, the accounting record value is determined according to the corresponding stipulations at points a, b, c, and d, clause 3, Article 12 of Decree 15/2025/ND-CP.

- The original cost of railway infrastructure assets is adjusted in the following cases:

+ Reevaluation of the value of railway infrastructure assets during comprehensive inventory as per the decision of the Prime Minister of Vietnam.

+ Upgrading, renovating, and expanding railway infrastructure assets as per the project approved by the competent authority.

+ Dismantling one or more parts of the railway infrastructure asset (in case the asset parts being dismantled are accounted collectively in the asset's original cost), except for dismantling to replace during railway infrastructure maintenance.

+ Installing one or more parts to the railway infrastructure asset, except for installation to replace during railway infrastructure maintenance.

+ Loss of part of the asset or the asset is seriously damaged due to natural disasters, force majeure events, or other sudden impacts (except in cases where the asset is remedied as per legal regulations on railway maintenance or restored through insurance/compensation by related organizations or individuals).

- The value of railway infrastructure assets defined in Article 12 of Decree 15/2025/ND-CP is used for accounting entries, declaration to input information into the Railway Infrastructure Asset Database, and other purposes as stipulated by law.

- The accounting and depreciation of railway infrastructure assets follow the regulations of the Minister of Finance.

2. Records for managing national railway infrastructure assets in Vietnam

Records for managing national railway infrastructure assets according to Article 11 of Decree 15/2025/ND-CP are as follows:

* The management records include:

- Documents related to the formation and fluctuations of railway infrastructure assets according to Decree 15/2025/ND-CP and other related legal provisions; legal documents concerning land attached to railway infrastructure (if any) in cases where the land is allocated or leased by the competent authority according to land law.

- Reports on declarations; reports on the management, use, and exploitation status of railway infrastructure assets according to Decree 15/2025/ND-CP.

- Data within the Railway Infrastructure Asset Database as prescribed in Decree 15/2025/ND-CP.

* The railway asset management enterprise is responsible for preparing, managing, and storing asset records as prescribed in clause 1, Article 11 of Decree 15/2025/ND-CP; also executing policy reports as prescribed in Decree 15/2025/ND-CP.

The responsibilities for preparation, management, and storage of investment dossiers for the construction, expansion, upgrading, and renovation of railway infrastructure assets are carried out following legal regulations concerning construction, railway law, and other related laws.

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