Standards for identification of clean water supply infrastructure assets in Vietnam

Standards for identification of clean water supply infrastructure assets in Vietnam

The content of the guidance in Circular 73/2022/TT-BTC stipulating the regime of management and calculation of depreciation and amortization of clean water supply infrastructure assets is promulgated by the Minister of Finance of Vietnam.

(1) The clean water supply infrastructure asset is a complete centralized water supply system, or each independent asset satisfying both of the following two criteria at the same time is a fixed asset:

- Having a useful life of 1 year or more.

- The original price is 10,000,000 VND (ten million VND) or more.

(2) In the event that the clean water supply infrastructure asset is a system assigned to many management agencies and units,
The part of the property assigned to each agency or unit that simultaneously satisfies the two criteria specified in Clause (1) is a fixed asset.

(3) Based on the technical characteristics of clean water supply infrastructure assets and local realities; on the basis of the proposal of the agency or unit assigned to manage the clean water supply infrastructure assets and the superior management agency of the agency or unit assigned to manage the clean water supply infrastructure asset (if any), the specialized agency in charge of clean water supply shall report to the People's Committee of the province for consideration and decision that the accounting books of clean water supply infrastructure assets are made according to a complete centralized water supply system or each independent asset so that the agency or unit assigned to manage clean water supply infrastructure assets can make accounting books.

In case of necessity, the People's Committee of the province shall delegate authority to specialized agencies in charge of clean water supply, and the district-level People's Committee shall decide on the accounting books of clean water supply infrastructure assets according to a complete centralized water supply system or each independent asset so that the agency or unit assigned to manage clean water supply infrastructure assets can make accounting books.

Standards for identification of clean water supply infrastructure assets in Vietnam (Internet image)

Principles of asset management for clean water supply infrastructure in Vietnam

- Infrastructure assets for clean water supply specified in Article 3 of Circular 73/2022/TT-BTC must be documented.
to strictly manage in-kind and value in accordance with the law on management and use of public property and relevant laws.

- Each clean water supply infrastructure asset specified in Article 3 of Circular 73/2022/TT-BTC is an object to be recorded in the accounting books. Accounting for clean water supply infrastructure assets must fully reflect and record information on the historical cost, residual value, wear and tear/depreciation of the asset.

- Agencies and units assigned to manage clean water supply infrastructure assets are responsible for:

+ Making asset cards, make accounting records for all clean water supply infrastructure assets assigned to be managed according to the provisions of the current accounting regime.

+ Carrying out an annual inventory of assets; making adjustments to accounting data if there is any difference when making an inventory.

+ Making report on the declaration and a report on the management and use of clean water supply infrastructure assets as prescribed in Articles 24 and 25 of Decree 43/2022/ND-CP and relevant laws.

- For assets of clean water supply infrastructure that are no longer in demand but have not been fully depreciated or fully depreciated according to regulations, agencies and units assigned to manage assets shall continue to manage, monitor, and preserve assets in accordance with current regulations and calculate depreciation according to the provisions of this Circular until they are handled according to regulations.

- For assets of clean water supply infrastructure that have been fully depreciated or can still be used, agencies and units assigned to manage assets shall continue to manage, use, monitor, and preserve assets in accordance with current regulations and are not required to calculate depreciation and amortization.

In case of clean water supply infrastructure assets that have been fully depreciated but then fall into the category of having to change their historical cost according to the provisions of Clause 7 Article 5 of Circular 73/2022/TT-BTC, the depreciation and amortization must be calculated according to regulations for the remaining useful life (if any) after the change in cost.

- In case of leasing the right to exploit clean water supply infrastructure assets, the agency or unit assigned to manage the property shall continue to manage, monitor, and calculate the depreciation of the property according to the provisions of this Circular during the lease period.

- In case of a definite transfer of the right to exploit clean water supply infrastructure assets, during the transfer period, the agency or unit assigned to manage the property (the assignor):

+ Taking responsibility for monitoring and supervising the performance of obligations of the transferee in accordance with the law and the transfer contract with a definite term of the right to exploit the property.

+ Failure to calculate depreciation and amortization according to the provisions of this Circular and not accounting for assets but monitoring the financial notes in accordance with current accounting regulations.

+ At the end of the term of transfer for a definite time, the right to exploit clean water supply infrastructure assets shall be transferred to the agency or unit assigned to manage the property, and the agency or unit assigned to manage the property shall receive the property back under a transfer contract with a definite term of the right to exploit the property and the provisions of law, with a re-determination of the original cost and residual value of the property to be carried out to perform the management, use, and calculation of depreciation and amortization according to the provisions of Decree 43/2022/ND-CP and Circular 73/2022/TT-BTC.

Duong Chau Thanh

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