New regulation on standards of fixed assets of state agencies in Vietnam

On April 25, 2023, the Ministry of Finance issued Circular 23/2023/TT-BTC on guidance on regime for management and calculation of depreciation of fixed assets of agencies, organizations or units and fixed assets handed to enterprises by the State without caculation of the state capital portion of such enterprises (which comes into effect from June 10, 2023 and is applied from the fiscal year 2023.).

According to Circular 23/2023/TT-BTC, the guidance on standards for fixed asset of state agencies in Vietnam is as follows:

Identification of fixed assets of state agencies in Vietnam

- An independent asset is an asset.

- If a system composed of multiple separate parts which are connected to perform one or certain functions, lacks any of these parts making it unable to operate, such system is identified as an asset.

- If a system composed of multiple separate parts linked together of which the useful life cycle is different remains able to perform its main functions in case of lack of any of such part, but it and its parts need to be separately managed, each part is identified as an asset.

- Each drought animal and/or each producing animal is identified as an asset.

- Each independent and perennial garden or each perennial plant is identified as an asset.

- Land use right for each land plot or the area assigned to an agency, organization or unit in each land plot is identified as an asset.

- Intellectual property right registered and established according to each copyright registration certificate, copyright-related right registration certificate, protection title for industrial property, or plant varieties patent is identified as an asset.

- Each software is an asset.

-  Brand of each public service provider is an asset.

Standards of fixed assets of state agencies in Vietnam

(1) Assets specified above (except for assets specified in (2)) shall be identified as fixed assets if they meet 02 standards below:

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

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

(2) Assets specified above of public service providers that have guaranteed recurrent expenditure and investment expenses, assets of public service providers which require its depreciation to be included in the service price according to the law and assets of public service providers used in business, lease, joint venture and association without establishment of new legal entity according to the law shall be identified as fixed assets when they meet 02 standards below:

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

- They meet standards of historical costs of fixed assets according to regulations applicable to enterprises.

Mai Thanh Loi

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