Vietnam: Rules for calculating depreciation of fixed assets and depreciating them

According to Circular No. 45/2018/TT-BTC of the Ministry of Finance of Vietnam, rules for calculating depreciation of fixed assets and depreciating them are as follows:

1. Rules for calculating depreciation of fixed assets

- The depreciation of fixed assets shall be calculated once every year in December before the accounting book is closed. The scope of fixed assets being calculated for their depreciation is for all current fixed assets by December 31 of the calculating year.

- The depreciation of the fixed assets specified in point c, clause 2, Article 12 hereof shall be calculated and such assets shall also be depreciated according to the regulations in Article 16 hereof.

- If the agencies, organizations, units or enterprises are transferred, split, merged or dissolved, the depreciation of their fixed assets during the financial year, in which the competent agency or the competent person decides such transfer, separation, merging and dissolution, shall be calculated at the receiving agencies, organizations, units or enterprises.

- If the fixed assets are counted and evaluated according to the decision of the competent agency or the competent person, the depreciation of such assets shall be determined on the basis of revaluation after stocktaking in the financial year in which the competent agency or competent person determines the revaluated value.

2. Rules for depreciating fixed assets

- The rules for depreciating the fixed assets specified in point a and b, clause 2 and Article 12 hereof shall be applied in accordance with the regulations for enterprises.

- As for the fixed assets specified in point c, clause 2, Article 12 hereof, the depreciation shall be carried out from the date on which such assets are put into use in the following activities: business, leasing, joint venture and association. The depreciation of such assets shall be stopped after the date on which such assets stop being used for the above activities.

- The depreciation cost shall be allocated for each professional activity, business activity, leasing activity, joint venture activity and association activity in order to record the cost of each corresponding activity.

Circular No. 45/2018/TT-BTC of the Ministry of Finance of Vietnam takes effect from July 02, 2018 and replaces Circular No. 162/2014/TT-BTC.

- Thanh Lam -

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