Standards of fixed assets in Vietnam according to Circular 23/2023/TT-BTC

Standards of fixed assets in Vietnam according to Circular 23/2023/TT-BTC (Internet image)

1. Standards of fixed assets in Vietnam according to Circular 23/2023/TT-BTC

Standards of fixed assets according to Article 3 of Circular 23/2023/TT-BTC are as follows:

- Identification of assets:

= 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.

- Assets specified in Clause 1 of Article 3 of Circular 23/2023/TT-BTC (except for assets specified in Clause 3 of Article 3 of Circular 23/2023/TT-BTC) 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.

- Assets specified in Clause 1 of Article 3 of Circular 23/2023/TT-BTC 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.

2. Classification of fixed assets in Vietnam

Classification of fixed assets according to Article 4 of Circular 23/2023/TT-BTC is as follows:

- Classification according to physical properties:

=  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. To be specific:

== Type 1: Buildings and constructions: offices, warehouses, auditoriums, clubs, cultural buildings, sport stadiums, museums, kindergartens, workshops, classes, lecture halls, dormitories, hospitals, convalescent homes, guest houses, houses, public houses, other buildings and constructions.

== Type 2: Architectural structures: warehouses, storage tanks, parking lots, drying grounds, sports grounds, swimming pools, bore wells, dug wells, fences and other architectural structures.

== Type 3: Cars, including: official state cars, cars that serve general works, specialized cars, cars that serve state reception and other cars.

== Type 4: Other vehicles (except for cars): road transport vehicles, rail transport vehicles, water transport vehicles, air transport vehicles and other transport vehicles.

== Type 5: Machinery and equipment: Popular official machinery and equipment, equipment that serves general activities; specialized machinery and equipment and other machinery and equipment.

== Type 6: Perennial plants, draught animals and/or animals that serve production.

== Type 7: Other tangible 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. To be specific:

== Type 1: Land use rights.

== Type 2: Copyright and copyright-related right.

== Type 3: Industrial proprietorship.

== Type 4: Rights to plant varieties.

== Type 5: Software.

== Type 6: Brands of public service providers.

= Special fixed asset is an asset of which cost of formation or real value is not determined, however, it is subject to strict management (such as: antique, exhibit in museum, monument, ranked historical relic, ancient document or rare document), fixed asset which is the brand of a public service provider. 

According to actual condition and management requirements for assets specified in this point, Ministers, heads of ministerial-level agencies, governmental agencies, other central agencies (hereinafter referred to as “ministers and heads of central agencies”), the People's Committees of provinces and central-affiliated cities (hereinafter referred to as “the People's Committees of provinces”) shall promulgate the list of special fixed assets under the management by ministries and central or local agencies (using form No. 02 in Appendix 02 hereto) in order to exercise unified management.

- Classification according to origins of assets:

= Fixed assets formed from procurement.

= Fixed assets formed from investment in construction.

= Fixed assets provided or transferred.

= Fixed assets that are giveaways or promotional products (including cases where providers exchange old assets for new assets after a period of use according to policies of manufacturers/providers).

= Fixed assets not listed in the account book.

= Fixed assets that public service providers can receive after expiration of the duration of joint venture or association according to regulations in Clause 6 Article 47 of Decree 151/2017/ND-CP

= Fixed assets formed from other sources.

Circular 23/2023/TT-BTC takes effect from June 10, 2023, applies from fiscal year 2023 and replaces Circular 45/2018/TT-BTC.

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