Circular No. 45/2013/TT-BTC dated April 25, 2013 of the Ministry of Finance guiding the management, use and depreciation of fixed assets

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ATTRIBUTE

Circular No. 45/2013/TT-BTC dated April 25, 2013 of the Ministry of Finance guiding the management, use and depreciation of fixed assets
Issuing body: Ministry of FinanceEffective date:
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Official number:45/2013/TT-BTCSigner:Tran Van Hieu
Type:CircularExpiry date:Updating
Issuing date:25/04/2013Effect status:
Known

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Fields:Enterprise

SUMMARY

FIXED ASSETS OVER VND 30 MILLION MUST HAVE DEPRECIATION

 

This is one of the important contents prescribed at the Circular No. 45/2013/TT-BTC dated April 25, 2013 of the Ministry of Finance guiding the management, use and fixed asset depreciation.

Also at this Circular, the Ministry of Finance also regulates the Principles of fixed assets depreciation All of the enterprise’s current fixed assets must be depreciated excluding fixed assets have been fully depreciated but are still used in production and business activities; fixed assets are lost during depreciation; other fixed assets managed but not owned by enterprise; fixed assets are not managed, monitored and recorded in the enterprise’s accounting books; fixed assets are used in welfare activities to serve the enterprise’s employees; fixed assets from the non-refundable aid after the competent agencies have handed them over to enterprises in service of their scientific research; intangible fixed assets are long-term land use right with land use fee or receiving the legal long-term land use right.

Within that, means of labor are the tangible assets with independent structure, or a system of many individual parts of assets linked to perform one or a certain number of functions and without any part, the system cannot work, and they shall be regarded as fixed assets if it is certain to gain economic benefit in the future from the use of such asset; having the utilization time of over 01 year; primary price of assets must be determined reliably, and is valued at 30,000,000 (thirty million) VND or more. The expenses not simultaneously satisfying all three criteria shall be recorded directly or gradually amortized into the business cost of enterprises.

Besides, the Ministry of Finance also defines clearly the determination dining the time of tangible fixed assets depreciation, For new fixed assets (not used), the enterprises must depend on the time frame of fixed asset depreciation specified in Appendix 1 issued together with this Circular to determine the time of fixed asset depreciation.  For intangible fixed assets depreciation, the enterprises shall determine the time of depreciation of intangible fixed assets by themselves but not exceeding 20 years.

This Circular takes effect on June 10, 2013 and is applied to the financial year in 2013.
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Effect status: Known

THE MINISTRY OF FINANCE

Circular No. 45/2013/TT-BTC of April 25, 2013, guiding the management, use and depreciation of fixed assets
Pursuant to November 29, 2005 Law No.60/2005/QH11 on Enterprises;
Pursuant to June 3, 2008 Law No.14/2008/QH12 on Enterprise Income Tax;
Pursuant to the Government’s Decree No. 124/2008/ND-CP of December 11, 2008, detailing and guiding a number of articles of the Law on Enterprise Income Tax;
Pursuant to the Government’s Decree No. 122/2011/ND-CP of December 27, 2011, amending and supplementing Decree No. 124/2008/ND-CP of December 11, 2008;
Pursuant to the Government’s Decree No. 118/2008/ND-CP of November 27, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;
At the proposal of the director of the Department of Enterprise Finance;
The Minister of Finance promulgates the Circular to guide the management, use and depreciation of fixed assets.
Chapter I
GENERAL PROVISIONS
Article 1. Subjects and scope of application
1. This Circular applies to enterprises lawfully established and operating in Vietnam.
2. The calculation of depreciation under this Circular applies to each fixed asset of enterprises.
Article 2. Terms used in this Circular are construed as follows:
1. Tangible fixed assets are primary means of labor in physical forms, which satisfy the standards of tangible fixed assets, are involved in many business cycles but still retain their original physical forms, such as buildings, architectural objects, machinery, equipment, means of transport, etc.
2. Intangible fixed assets are assets not in physical forms, which represent an invested value and satisfy the standards of an intangible fixed asset, are involved in many business cycles, such as some costs directly related to used land; costs of issuance right, patent, copyright, etc.
3. Financial leased fixed assets are fixed assets which an enterprise leases from a financial leasing company. At the end of the leasing term, the lessee has the option to purchase the leased assets or continue the lease under the terms agreed in the financial leasing contract. The total rental for an asset type specified in the financial leasing contract must be at least equal to the value of that asset at the time of signing the contract.
All leased fixed assets that do not satisfy the above-mentioned requirements are considered operating leased fixed assets.
4. Similar fixed assets are those with similar utilities in the same business area and with equivalent values.
5. Historical cost of fixed assets
- Historical cost of tangible fixed assets includes all costs that an enterprise has to pay to have the tangible fixed assets by the time of putting the assets into a state ready for use.
- Historical cost of intangible assets includes all costs that an enterprise has to pay to have the intangible assets by the time of putting the assets into use as expected.
6. Reasonable value of fixed assets is the value of assets which can be exchanged between knowledgeable parties in the parity exchange.
7. Wear and tear of fixed assets is the incremental decrease in the use value and value of fixed assets due to involvement in production and business activities, natural erosion, technical advances, etc. during the operation of fixed assets.
8. Accumulated wear and tear of fixed assets is the total of worn-out value of fixed assets by the reporting time.

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