Vietnam: Identification of fixed assets

Fixed assets are divided into tangible fixed assets, intangible fixed assets, etc. Each type of asset will have different identifications, specifically as follows:

1. Identification of tangible fixed assets

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, and satisfy both 02 requirements below:

- The useful life is 01 (one) year or more.

- The cost is 10.000.000 VND (ten million VND) or higher.

2. Identification of intangible fixed assets

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. Also, it must satisfy both 02 requirements specified above.

3. Based on the properties of the assets of sectors, fields or localities which are practically used and on the management requirements, the Ministers and Heads of ministerial agencies, governmental agencies and other central agencies (hereinafter referred to as “Ministers and Heads of central agencies), People's Committees of provinces and central-affiliated cities (hereinafter referred to as “Provincial People’s Committees) may promulgate the list of assets, which do not satisfy the above requirements, as fixed assets. They are under the management of the Ministries, central agencies and localities. Such assets must satisfy 01 of 02 following requirements:

- The asset (except buildings, constructions and architectural structures) must have a cost from 5.000.000 VND (5 million VND) to under 10.000.000 VND (ten million VND) and has a useful life of 01 year or more.

- The asset is a fragile asset and has a cost of 10.000.000 VND (ten million VND) or more.

4. Identification of the fixed assets specified in Clause 1 Article 16 of Circular No. 45/2018/TT-BTC shall be carried out in accordance with the regulations applied to enterprises.

Circular No. 45/2018/TT-BTC of the Ministry of Finance of Vietnam takes effect from July 02, 2018.

- Thanh Lam -

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