Vietnam: Principles of asset management when assigning wholly state-owned enterprises

Principles of asset management when assigning wholly state-owned enterprises (Illustration)

Specifically, Article 22 of Decree 128/2014/ND-CP stipulates that the enterprise's Innovation Committee inventories and determines the quantity and condition of all assets; long-term and short-term investments; assets rented, borrowed, kept for safekeeping, consignment, occupied, leased, and borrowed; reconciles and categorizes debts; lists creditors and amounts payable, lists debtors and amounts receivable, distinguishing between recoverable and non-recoverable debts; categorizes assets, handles assets and debts; and prepares tax finalization reports at the time of enterprise valuation.

The principles for handling assets when transferring a wholly state-owned enterprise are as follows:

• For assets used as capital contributions in joint ventures or received as capital from joint ventures; outsourced or financial leased assets; borrowed, kept-for-safekeeping, and other non-corporate assets, the parties transferring the enterprise, receiving the enterprise, and the asset owner shall negotiate to inherit and re-sign new contracts or liquidate old contracts;
• For occupied assets, the enterprise identifies the owner to return them or signs a lease agreement to borrow the assets again. If the owner cannot be identified, the enterprise accounts for an increase in state capital equivalent to the actual value of the assets;
• For welfare assets, assets used in business production invested with the Reward Fund, Welfare Fund of the enterprise, and cash balances of the Reward Fund, Welfare Fund, they are transferred to the new enterprise for management and use to serve the collective employees in the enterprise;
• For assets used in business production invested with the Reward Fund, Welfare Fund of the enterprise, they are handed over to the enterprise to continue using in business production;
• Cash balances of the Reward Fund, Welfare Fund are distributed to employees currently working based on the actual number of years worked at the enterprise before transferring it.

See details at Decree 128/2014/ND-CP, effective from March 1, 2015.

Ty Na

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